Urbanexus Update - Issue #25
I strive to understand what creates opportunities—and challenges—for real estate investment and sustainable community development. Learn about me at http://www.urbanexus.com/about-h-pike-oliver/.
The economy in the USA
The trend lines on key construction data points continue to improve.
Labor and subcontractor costs outpacing Inflation — eyeonhousing.org
Builders are paying higher wages/subcontractor bids (reported by 84 percent of builders) forcing them to raise home prices (83 percent) and making it difficult to complete projects on time (73 percent).
Mortgage burden at historic levels in larger markets of the USA According to new U.S. housing market research by Zillow, the combination of rising home prices and interest rates creates a doubly challenging environment for would-be home buyers, making monthly mortgage payments on even modestly priced homes more of a financial burden.
Real estate investment
The increasing presence of family offices in real estate
More than 560 family offices are either considering or currently investing in real estate, with a current or planned real estate allocation ranging from $5 million to more than $1 billion.
Calculating risk in real estate investing
The Monte Carlo analytical method provides a robust approach for evaluating risk-adjusted returns by simulating performance volatility caused by variances in multiple components of the investment return, such as: cap rates, operating income (including rental rates, vacancy rates, and operating margin), capital expenditures, and interest rates.
California public pension funds and climate-related risks — www.ipe.com
California passes rules requiring CalPERS and CalSTRS to identify and report on climate risk in their portfolios.
Real estate development
Government regulations account for 33% of multifamily costs in USA Layers of excessive regulation translate into higher rents, reduced affordability for consumers and on average, account for almost one-third of a multifamily project's development and building costs.
Modular construction — www.sightline.org
Can it help homebuilders make more homes precisely where needed in major cities facing affordable housing shortages?
Pace of downtown Seattle construction
Seattle led the nation in office construction completed, accounting for 20 percent of all office projects finished in major downtowns of the USA, based on research from commercial real estate firm JLL. The construction boom has transformed the downtown area. Compared to 2010, the area’s housing stock has surged 56 percent while office space has grown 19 percent.
In Seattle, condos are now worth the risk in a cooling apartment market
Why the shift? The most significant factor is that the apartment market has softened, thanks in large part to the 40,000 new apartments that have been built in Seattle in the last eight years.
Home builder buys nearly 900 acres near Charleston
A North Carolina-based home builder recently bought nearly 900 undeveloped acres in Dorchester County, where more than 1,100 homes could rise.
Around the world
As India adds 100 smart cities, one tells a cautionary tale
India's $7.5 billion plan to turn 100 urban centers into smart cities by 2020 does not address structural issues and ignores the needs of low-income and marginalized groups, experts say.