Category Archives: Investing

Which city is Texas’ hottest multifamily market?

Texas’ multifamily real estate market is strong, but of the four biggest markets in the state one shines brightest by far in terms of sales prices.


According to research from CBRE, Austin, the smallest of the big four metros in Texas, has far and away the highest average sales price per multifamily property.

The average sales price in Texas’ capitol in 2017 was $32.46 million. Second place was Dallas-Fort Worth and it wasn’t even close. The DFW area had an average sales price of $23.62 million last year.

Furthermore, this trend extends to the end of the bell curve with the maximum sale price in Austin at $158.25 million and the second place maximum was $115.5 million (again in DFW).

DFW had the highest volume of sales at 231 sales in 2017, whereas Austin had 59 sales in 2017, but obviously investors are willing to pay a pretty penny, the prettiest penny, for multifamily product in Austin.

CBRE’s report says some of the big price tag for Austin multifamily properties can be accounted for in the youth of the properties. Of the properties sold in Austin, 26% of them were built in the years since 2010, whereas only 13% of the properties sold in the other three major Texas metros were built after 2010.

Though its sales values clearly outshine the rest of Texas, Austin is by no means the only winner in the state of Texas.

All four major Texas metros’ (Austin, Houston, Dallas-Fort Worth and San Antonio) sales prices beat their assessed values in 2017, and now the average assessed values for 2018 roughly match the average sales values of 2017.

These are preliminary numbers, and it remains to be seen whether Texas will continue perform at the level it has been. So far, it looks like it will.

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Growing number of Americans say now is a bad time to buy a home

There’s been a distinct uptick over the past year in the number of Americans who say now is a bad time to buy a home, independent research group Capital Economics states in a new report.

According to the report, nearly a quarter of surveyed Americans pointed to high home prices as the primary reason for their reluctance to buy. 

It’s been 12 years since that many people said high home prices were the main deterrent to homeownership.

According to the Capital Economics report, the last time real home prices were this high – in the pre-crash days of August 2004 – only 13% of surveyed Americans said prices were a leading reason not to buy. Today, that number is 22%.

This sentiment appears to be elevated in relation to real home prices and mortgage affordability, according to the update. And while stricter mortgage lending standards may be preventing some who think they can afford a house from buying one, other factors, including lingering memories of the housing crash, may be at play.

“We suspect memories of the house price crash 10 years ago are also playing a role in the relatively fast build-up in concerns over high house prices,” the update stated.

“After all, only three years ago over 10% of homes were still underwater. An understanding that house prices can quickly lose value is making Americans more cautious about buying a home.”

But caution might be a good thing, serving as a necessary weight that could temper housing demand.

“The good news is that that caution should in itself prevent a dangerous boom in house prices from developing,” the update stated. “Based on past form, the rise in the share of households saying it is a bad time to buy a home suggests house price growth will slow to zero over the next 18 months.”

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Old school? Senior citizens’ campus takeover

Move over freshmen, these rooms are for seniors…senior citizens, that is. According to an article from Bloomberg, a growing number of retirees are choosing to live on or near a university campus.

One university is taking the concept a step further and constructing its very own senior housing community on campus grounds.

Purchase College, a 4,200-student, liberal arts college, is about to break ground on a 385-unit senior housing project on its 500-acre campus. The university has dubbed this community, “Broadview.”

This month, a non-profit associated with Purchase will sell $14.5 million in unrated tax-exempt notes to fund the beginning of construction on the 40-acre site near Purchase’s performing arts center. Here is Bloomberg’s breakdown of the trend Broadview is a part of:

Broadview is the latest publicly-financed development to capitalize on demand from retirees to live in communities near universities where they can take classes, attend art exhibits and sports events and maintain a connection to their alma mater. Developers have built senior communities near the University of Texas, the University of Florida, Cornell University, Dartmouth College, Oberlin College, Duke University and Penn State, among others. Lasell College in Newton, Massachusetts has an on-campus retirement community called Lasell Village.

Last year, about $2.4 billion of tax exempt bonds were sold solely for new senior living communities, the most since 2007, according to data compiled by Bloomberg. This year developers have sold about $730 million solely for projects, mirroring an overall decline in municipal market issuance.

Part of Broadview’s model is to integrate the senior residents into campus life through common learning spaces in the building, having the residents act as mentors to the students and offering them the ability to be involved with the performing arts center and Purchase College’s museum.

Upon completion, Broadview will have 44 units designated affordable, and 341 market rate units with entrance fees of $250,000 for one occupant and $333,000 for two. The monthly rate will be $3,356 for the regular units.

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