Crazy supply of 520,000 new units by EOY

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Apartment Supply Continues to Outpace Demand link

• Surge in Supply: An unprecedented 520,000 new units are expected to be delivered across the country by the end of the year.

• Overshadowing Demand: For the past six quarters, supply has consistently outpaced demand, with Q2 2023 being no exception.

5 statistics that show America is not in financial trouble link

• Debt in Check: The household debt service ratio, which is the percentage of income used to pay off all types of debts, was 9.7% at the end of Q2, significantly lower than the 13.2% in Q4 2007 and the pre-pandemic average of 11.2%.

  

• Earnings on the Rise: Disposable income has seen an annualized growth of 10% in the first five months of this year, surpassing the inflation rate of approximately 4%.

• Healthy Financial Status: Consumers have a total of $168.5 trillion in assets compared to a debt of $19.6 trillion, indicating a robust financial health.

• Employment Market Thriving: The employment-population ratio for prime-age workers (25-54 years) is currently at 80.7%, higher than any point between 2002 and 2022, suggesting a strong job market.

• Solid Spending Patterns: Consumer spending continues to follow the pre-pandemic trend, even after adjusting for inflation, indicating a strong economic outlook.

Top 10 U.S. Housing Markets with Highest Foreclosures Q2 2023 link

• Surge in Foreclosures: Foreclosure filings in the first half of 2023 reached 185,580 U.S. properties, marking a 13% increase from the previous year and a staggering 185% rise from two years ago.

• State-Specific Spikes: The states with the most significant increases in foreclosure activity in the first half of 2023 were Maryland (up 100%), Oregon (up 99%), Alaska (up 95%), West Virginia (up 83%), and Arkansas (up 72%).

• Market-specific spikes: The top 10 U.S. housing markets with the worst foreclosure rates in Q2 2023 were:

  • Atlantic City, NJ

  • Lakeland, FL

  • Cleveland, OH

  • Columbia, SC

  • Jacksonville, FL

  • Palm Bay-Melbourne-Titusville, FL

  • Elkhart-Goshen, IN

  • Ocala, FL

  • Chicago-Naperville-Elgin, IL-IN-WI

  • Orlando-Kissimmee-Sanford, FL

Current Stats behind SFRs, Apartments and Build to Rents classes link

• Stability vs Volatility: Single-family rents (SFR) have shown stability over the last four years, while build-to-rent (BTR) and apartment rents have seen more volatility.

• Rent Growth Shift: BTR rents, after surging above SFR and apartment rents in 2021 and most of 2022, are now growing at a slower pace (1.3% YOY) compared to apartments (3.5%) and single-family rentals (4.7%).

• Supply Surge: BTR experienced a 30% increase in construction activity in 2022, with developers acquiring 14% of finished residential lots nationwide. This surge in supply is impacting both BTR and apartment occupancy trends.

5 Cities that are still safe for Real Estate Investors in 2023 link

• Surge in Interest: The cost of a mortgage is now around 7%, and short-term US treasuries are yielding over 5%, emphasizing the importance of cash flow in real estate investment.

• Cap Rate Markets: Cities in the Southeast and Midwest of the US offer high rental profits (cap rates) that exceed what you can earn on US Treasuries, with returns ranging from 6 to 10%.

• Population Growth: 5 Cities are Birmingham, AL; Tulsa, OK; Columbia, SC; Greensboro, NC; Little Rock, AR; and Tallahassee, FL. These have managed to keep appreciating despite the initial stages of the housing downturn, making them decent places to buy real estate in 2023.