10 Hottest Rental Markets in the US

Home prices continue to climb in already-expensive Seattle, but investors with enough cash to get into the city’s landlord business could see big returns. Seattle ranked in the Top 3 of the nation’s best markets for rental real estate investors, according to an “opportunity” list from HomeUnion, a single-family-rental acquisition and management company.

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Despite its high home prices, Seattle is seeing increasing demand for rental dwellings because of robust job growth in the area. Amazon alone recently announced it was hiring 100,000 new employees, and while they won’t all work in Seattle, the corporate headquarters will need to grow for support. New jobs mean stronger demand for rental housing.

The story is much the same in Atlanta, which topped HomeUnion’s list as the best opportunity for single-family-rental investors. Both the Falcons and the Braves are building new stadiums in Atlanta, which will create an estimated 75,000 jobs for the city. Plus, home prices in Atlanta have not yet recovered as well as those in other markets, so investors can get in more easily and reap higher rents because of the increased demand.

“Atlanta has moved up the list. They were late to the [recovery] party and are now seeing 3.5 percent rent growth” said Steve Hovland, director of research at HomeUnion. “They’re also having a big decrease in single-family-rental vacancies.”

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Like Atlanta, Orlando, Florida, which came in at No. 2 on the list, is seeing an influx of retirees looking for warm climates. Orlando has both supply and demand, making entry prices for investors attractive. As the home of Walt Disney World and scores of other attractions, Orlando has set new tourism records, also boding well for its rental market.

“That will create thousands of leisure and hospitality jobs, which are lower paying, so they preclude home ownership,” Hovland said.

While Atlanta topped the list because of its low entry price and high job growth, other markets made the Top 10 despite their cooler employment prospects. Detroit, Memphis, Tennessee, and Chicagohave relatively low home prices when compared with asking rents, making them lucrative for investors. While there has been considerable apartment construction in Chicago and other markets on the list, most of that has been on the luxury end and doesn’t compete directly with single-family rentals.

Previously hot rental markets, like San Francisco and San Jose, California, have cooled for investors because new apartments compete more directly with those high-priced homes. With more apartment supply, rents are coming down, along with potential investor returns.

HomeUnion “opportunity” ranking, by metro area:

1. Atlanta
2. Orlando
3. Seattle
4. Las Vegas
5. Chicago
6. San Diego
7. Oakland, Calif.
8. Detroit
9. Dallas-Fort Worth
10. Memphis

Originally published here:   http://www.cnbc.com/2017/02/08/10-hottest-rental-markets-to-make-investors-landlord-dreams-come-true.html

 

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Blackstone Goes Public (Full Details on the IPO)

Invitation Homes, a Dallas-based single-family rental real estate investment trust and a behemoth in its class, raised $1.54 billion in an initial public offering Tuesday. It priced 77 million shares at $20 each, well within its previously stated range of $18 and $21. The stock opened slightly higher Wednesday.

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“We have a great product, the industry is finally getting recognized for what it’s doing, and we are driving the right margins. You see our core margins are about 62 percent right now, very competitive with multifamily. Top-line growth is competitive with multifamily and quite frankly, when you look at our fundamentals, it’s a very attractive time for investors and that’s why you see us come to the public market,” said John Bartling, president and CEO of Invitation Homes, in an interview on CNBC’s “Squawk on the Street.”

The IPO, marks a triumph for Invitation’s private equity owner Blackstone Group. Jonathan Gray, global head of real estate at Blackstone, told CNBC in an interview in October that housing is still a “bright spot” in the U.S. economy.

“We own about 100,000 either multifamily homes or single-family homes for rent. And across the board, across the country, we’re seeing strength in that area,” he said.

An Invitation Homes employee inspects an outdoor barbeque center at a four-bedroom, three-bath home on Hartland Street in Canoga Park, Calif., that the company bought with plans to fix up and turn into a rental property.

Blackstone made a big bet on single-family rentals, sinking roughly $10 billion into distressed homes. It recently won backing from mortgage giant Fannie Mae on up to $1 billion in debt. This will make it easier for Invitation Homes to expand its portfolio of homes in the future and could open the door for its rivals to grow more quickly as well.

“This is a new thing that we’re doing, trying to learn about that scale of financing in the rental space, but the single-family rental has obviously seen a return,” said Doug Duncan, chief economist at Fannie Mae.

Blackstone will keep 70 percent of its shares in Invitation Homes and board control.

“Blackstone and new shareholder interests will be closely aligned over the near term given the firm’s significant ownership stake, which will likely be reduced gradually over the next three to five years,” said John Pawlowski, senior research associate with Green Street Advisors.

Invitation Homes owns and manages close to 50,000 single-family rental homes in 13 metropolitan markets. It is a solid leader in the small but growing new asset class of publicly traded, single-family rental REITs. These companies, which include American Homes 4 Rent and Colony Starwood Homes, began buying distressed homes during the foreclosure crisis and over the past five years have scaled management and grown revenues.

 

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“We’ve all finally proven that this is a stable portfolio,” said Laurie Hawkes, a pioneer in the sector as co-founder of American Residential Properties, an Arizona-based single-family rental REIT that was acquired by American Homes 4 Rent for $1.3 billion in March 2016. “I think this is the same way it happened in multifamily.”

Both American Homes 4 Rent and Colony Starwood rose Tuesday, even as the Dow fell on the day. Both also saw twice as much trading volume, clearly enthusiasm for the Invitation Homes IPO. The stocks of those two initially launched with a sputter but saw dramatic gains throughout 2016 as the sector matured and returns were favorable.

“I think what has happened is that it bodes well for the whole sector,” added Hawkes.

Invitation, under the auspices of Blackstone’s already strong real estate leadership, began purchasing homes in 2012 and eventually amassed more than 60,000 homes, investing $1.2 billion in renovations. At one point it was reportedly spending $150 million per week on homes.

Company buyers were regulars at foreclosure auctions in particularly hard-hit markets like Phoenix and Atlanta. It focused on larger homes in good neighborhoods, laying the groundwork for strong rental revenue in the future. In the nine months ended Sept. 30, 2016, Invitation Homes brought in rental revenue of $654.7 million, up 11 percent from the same period in 2015, according to its IPO filing.

“I think it’s a little bit about lifestyle choice, and the average of our renter, and we like to say those who lease with us, are about 39 years old. They tend to be both working family and they tend to want to live near where they work and they typically are looking for a good school., so they are just at that stage where they have moved apartment to suburbs,” said Bartling.

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While other rental companies went public sooner, Blackstone waited, and that may be to its ultimate benefit. Given how quickly it was buying, there would inevitably be some poor property choices; hence it paired down its portfolio of the less profitable or troubled properties.

“They did what we all would have loved to have done. They were able to do it behind closed doors. They cleaned up the junk they didn’t want,” said Hawkes.

Some argue that the new strength in the single-family rental business could be short-lived, as the economy improves and more renters turn into homebuyers. The homeownership rate is still hovering near its historic low and the majority of new households forming today are renter households.

While incomes are growing, they are not growing nearly as quickly as home prices, and consumers’ savings have not improved very much. Saving for a down payment is still one of the biggest barriers to entry for younger homebuyers today.

Originally published here:   http://www.cnbc.com/2017/02/01/blackstone-takes-its-single-family-rental-bet-public-as-sector-soars.html

 

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How Trump Will Dismantle Dodd-Frank

It’s been a busy week in office for President Donald Trump, with executive orders on immigration, energy, trade, health care, and more being handed down daily. But executive orders are just the preamble to the big initiatives that Trump and the Republican majority in Congress are expected to push for shortly. Chief among those is the “dismantling” of the Dodd-Frank Wall Street Reform Act.

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During the presidential transition, Trump’s transition team stated that dismantling Dodd-Frank would be one of the president’s main priorities. And the American public got a reminder that the president and his party plan to keep that promise.

Speaking before the Congressional Republican Retreat, Vice President Mike Pence said that dismantling Dodd-Frank and its “overbearing mandates” remains a top priority for the Trump administration, a statement that was greeted by applause from the collected Republicans.

Screen Shot 2016-06-04 at 7.17.21 PMAfter Trump and Pence spoke to the GOP retreat, House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, issued a statement saying that he intends to continue pushing for the replacement of Dodd-Frank with a new financial reform package.

Last year, Hensarling introduced the Financial Choice Act, a Republican-crafted Dodd-Frank replacement that would “end taxpayer-funded bailouts of large financial institutions; relieve banks that elect to be strongly capitalized from ‘growth-strangling regulation’ that slows the economy and harms consumers; and impose tougher penalties on those who commit fraud as well as greater accountability on Washington regulators.”

On Thursday, Hensarling said that he will advance the Financial CHOICE Act in the new Congress.

“No bureaucrat in Washington should be able to tell hardworking Americans what kind of credit card, bank account, mortgage or retirement advice they can have, but that’s exactly what Dodd-Frank does,” Hensarling said.

“As the president and vice president have said, Dodd-Frank makes it harder for people to get loans to buy a home or start a small business. Consumers are paying more in fees and are losing benefits and access to services they want and need,” Hensarling continued.

UiDitsw“Instead of ending ‘too big to fail,’ Dodd-Frank institutionalizes bailouts for big banks. Dodd-Frank’s regulations give Wall Street a competitive advantage over community banks and credit unions,” Hensarling added.

Hensarling said that he plans to “dismantle” Dodd-Frank this year.

“Fulfilling the Trump Administration’s pledge to dismantle Dodd-Frank this year is essential to leveling the playing field, building a healthy economy and offering every American greater opportunities to achieve financial independence,” Hensarling said.

“Republicans on the Financial Services Committee are eager to work with the president and his administration to unclog the arteries of our financial system so the lifeblood of capital can flow more freely and create jobs,” Hensarling continued.

“The Financial CHOICE Act, our bold and forward-looking plan, replaces Dodd-Frank with new policies to protect consumers by holding Wall Street and Washington accountable, end bailouts and unleash America’s economic potential,” he concluded. “Replacing the Dodd-Frank mistake is necessary if we ever hope to enjoy a healthy economy and make America great again.”

Originally published here:  http://www.housingwire.com/articles/39051-pence-hensarling-dismantling-dodd-frank-remains-a-high-priority

 

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Where To Invest In Housing in 2017 (Top 20 Markets)

Whether looking for a place to live or a property to rent out for yield, every home buyer wants to make a smart investment. To find out where you can do just that in 2017 Forbes teamed up with Local Market Monitor, a North Carolina-based company that tracks more than 300 housing markets. Below you’ll find 20 markets where population, jobs and home prices are growing. Florida and Texas dominate, but solid markets can be found across the United States. For every city on the list, Local Market Monitor expects home prices to grow by at least 17% by 2020.   

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Dallas takes the top spot after ranking no. 6 in 2016. Prices here are expected to grow the most of any list city. Informing that forecast is 6.2% three-year population growth, 3.9% job gains last year and 9% annual home price gains. Homes in Dallas are also undervalued compared historic averages and local income.

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The first of three Florida cities on the list, Jacksonville claims 9% annual home price growth, 4.1% annual job growth and 5.1% population growth from 2012 to 2015 (the most recent data available for all cities). Homes in Jacksonville are undervalued by 8% compared to the historic ration of price and local income.

 

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Orlando boasts 7.2% three-year population growth and 4.4% annual job growth, both list highs. “A growing economy makes up for a lot of other stuff,” says Local Market Monitor CEO Ingo Winzer. “With a falling economy it doesn’t matter if things are good right now, they are not going to be good in a few years.”

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Prices in Seattle rose 12% last year the most of any list city. The average home price is second highest. Says Winzer: “In the very top markets, both population and jobs are growing at high rates and builders aren’t able to keep up, which is why home prices have increased rapidly and rental demand will be strong.”

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West Palm Beach enjoys 11% annual home price growth, 1.9% annual job growth and 4.7% three-year population growth. Despite the major rise in prices, homes here are not yet over valued.

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Salt Lake City West has 8% annual home price growth, 3.3% annual job growth and 4.1% three-year population growth. While not under valued, prices are yet to get ahead of themselves.

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Home prices grew 9% in Tampa last year. Job growth was 2.6%. The population in the fourth and final Florida city on the list grew 4.5% from 2012 to 2015.

 

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Nashville enjoys 9% annual home price growth and 2.7% annual job growth. With 6% three-year population growth it was among the fastest growing cities on the list. As demand grows, homes here are under priced by 7%.

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Home prices gained 9% in Forth Worth last year. Job growth was 2.3%. The population in the second of three Texas markets to make the list grew 5.2% from 2012 to 2015.

10-grandrapidsmi-mobilestory-bestbuycitiesforhousing-v1Homes in Grand Rapids (no. 1 in 2016) are by far the lowest priced of the list and significantly undervalued compared to history and local income. “Markets like Grand Rapids, Columbus and Atlanta still hold bargains,” says Winzer. “All these markets have upside price potential without the risk of a local bubble.”

11-sacrementoca-mobilestory-bestbuycitiesforhousing-v1Just two California markets made this year’s list. “We don’t see Los Angeles or San Francisco in this list because they already are over-priced,” notes Winzer. Sacramento, the state capital, rejoins the top 20 this year thanks in part to perfect pricing for the city’s average income.

12-charlottenc-mobilestory-bestbuycitiesforhousing-v1The first of two consecutive North Carolina markets to make the list, Charlotte has 8% annual home price growth, 2.1% annual job growth and 5.7% three-year population growth. Prices here are undervalued by 11%.

13-raleighnc-mobilestory-bestbuycitiesforhousing-v1Raleigh claims 7% annual home price growth, 2.2% annual job growth and 7.1% three-year population growth–the second highest on the list. Prices here are undervalued by 15%.

14-sandiegoca-mobilestory-bestbuycitiesforhousing-v1San Diego is the highest priced place on our list after gaining 6% last year. Unlike nearby Los Angeles, the city is not yet overvalued for the local income. The population here grew 3.6% between 2012 and 2015 and last year the city had 2.2% annual job growth.

15-lasvegasnv-mobilestory-bestbuycitiesforhousing-v1Though still under priced by 14%, Las Vegas housing has come a long way from when it was depressed by as much as 40%. The city was crushed by the financial crisis, with few takers for either casinos or the large supply of investment properties. But people are now coming back with 5.8% population and 1.9% job growth.

16-bostonma-mobilestory-bestbuycitiesforhousing-v1The only North Eastern city to make it, Boston bucks trends thanks to its healthcare industry. At 2.7% population growth here is the lowest of the list, but with no room to build it doesn’t take much to boost prices. Last year Boston had 1.9% job growth. Home prices have gained 6% but are still slightly under valued.

17-columbusoh-mobilestory-bestbuycitiesforhousing-v1Columbus ties with Grand Rapids for most under valued city, at 25% below the historic ratio of price to income in the city. Prices here are among the lowest on the list and have grown 6% year-over-year. The population in Columbus grew 3.9% from 2012 to 2015. Last year job growth was 1.6%, the lowest on the list.

18-atlantaga-mobilestory-bestbuycitiesforhousing-v1With 5.6 million people, Atlanta has the largest population of any city on the list. The population here grew 4.7% between 2012 and 2015. Last year the city had 2.7% job growth. Home prices gained 8% last year but are still undervalued by 17%.

19-phoenixaz-mobilestory-bestbuycitiesforhousing-v1Home prices gained 7% in Phoenix last year. Job growth was 1.8%. The population in only Arizona market on the list grew 5.7% from 2012 to 2015.

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The population of San Antonio grew 6.5% from 2012 to 2015. Lat year home prices gained 7% and jobs growth was 1.7%. Homes here are 7% under valued.

Originally published here:  http://www.forbes.com/sites/samanthasharf/2017/01/10/full-list-where-to-invest-in-housing-in-2017/#296841469f4a

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Trump’s Housing Team (What we know so far)

President Donald Trump still has a lot of key positions to fill that will shape his next four years in office. While rumors have been flying around about who he will appoint since he won the election, Trump now has just one official Cabinet-level appointment left to make. He’s filled 22 such positions, and made dozens of other high-ranking hires. And the Senate confirmation hearingshave already begun.

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We’ll update this list as Trump announces the rest of the senior leadership positions, but here’s what we know so far:

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Originally published here:  http://www.businessinsider.com/trump-white-house-cabinet-senior-leadership-positions-bios-2016-11

 

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