DPJ Residential

'At this point, 'building housing reduces rent' is as close to a scientific law of the housing market as we’re likely to find' - @Noahpinion

@RandallHouseRE I agree 💯…including our own deals. However it’s a little odd that they are having to offer the largest concession on the smallest units. Wondering if they missed the target demographic or missed on unit mix…???

@DPJResidential Yeah most lease up’s are slow right now, but inventory will be tight as you said

Bentonville AR is just starting to see amenitized, Class-A product a Dallas, Nashville, Austin has too much of. The difference is the product is limited and rents are still affordable. One of the few markets Class-A is set up to lease units quickly and at above underwritten rents the next few years. Lumen Luxury Lofts

@JeffJacksonNC Rents stopped growing in 2022. Yet, since 2022, our Property Taxes, Insurance and other Operating costs are up 50-100%. There are about 100 things the government could be doing to make housing (including Rents) more affordable and going after RealPage is NOT one of them.

Here’s our case against illegal rent hikes in NC:

@AdvisorsMidwest @jayparsons Why would rents fall if investors can’t buy single family homes?

@jayparsons home prices would fall and rents would follow

Banning ALL investors from buying single-family homes would be an enormous long-term accelerant to inflation, given that one-third of CPI is based on a survey of renters... who would have a dwindling supply of homes, putting upward pressure on rents.

@JohnSpelman17 @jayparsons M2 money supply surged (roughly +40% from 2020–2022, historically unprecedented).

@jayparsons So why did home prices and rents go up so much when investors were buying all those homes during covid

@jayparsons Institutional investors (per Grok) represent between 0.5–0.6% of the single family rental market. This bipartisan policy will have ZERO impact on home prices & rents. Increasing supply (numerous ways to do this) is the most effective way to lower home prices & lower rents.

How's this for irony? Just days before President Trump announced a ban on institutional investors buying homes, a bunch of academics in the American Real Estate & Urban Economics Association awarded its annual prize for best doctoral dissertation. The co-winner? "The Impact of Institutional Investors on Homeownership and Neighborhood Access" by NYU’s Joshua Coven, who is now a professor of real estate at Baruch College in New York City. So, what did Professor Coven conclude from his peer-reviewed and peer-honored study? Three key conclusions, in his own words: 1) "I find that institutional investors increase the quantity of rentals and lower rents on net because their ability to operate large portfolios at scale outweighs the incentive to use market power to decrease the rental supply." In other words: More scale = more supply = lower costs for operators (due to scale) + lower rents for renters (due to increased competition). 2) "Institutional investors decrease the quantity of homes available for homeownership and raised prices, however the homeownership impact is 1/5th of what it would be if there were no supply response and the price impact is far below the observed association between institutional investor purchases and actual price increases." In other words: Yes, every sale impacts prices. But the impact is lower than generally assumed. Additionally: Coven found that if institutional buyers were removed, more than 60% of the homes they bought would have otherwise gone to small investors -- not individual homebuyers. 3) "I find that renters from regions with lower median incomes, worse school test scores, and lower historic economic mobility move into institutional investor rentals." In other words: Single-family rentals help diversify neighborhoods with families who couldn't otherwise afford to buy homes there -- providing kids access to better schools and better upward mobility.

@TannerBuilds Very nice. First floor (garage) ceiling heights don’t look as tall as I would think is ideal for a garage. From what I have heard and read garage doors should be 14’ tall in order to ensure Campers, Boats, etc can fit.

Absolutely love this custom garage with living space above it.

@GrantCardone I was under the impression that very few loans are assumable.

If I was a home buyer today this would be my strategy: Find the best location in my market and make a list of all buyer who either a) have no mortgage or b) who have sub 4% interest rates. I would then make an offers on multiple houses with those that qualify. On homes paid for I would ask the seller to finance for 36 months at 5% and for scenario b) anyone with a sub 4% you should simply assume the debt. Quit worrying about price worry about terms.

@MarioNawfal Better sign as long term of a lease you can get as later this year Rents will rise and will continue to rise (5-10% annually) for the next 5+ years.

🇺🇸 AUSTIN RENT PRICES JUST CRASHED BACK TO 2019, DOWN 21% FROM THE PEAK Austin rents have completely faceplanted. After hitting $1,636/month in summer 2022, average apartment rent is now down to $1,288 the lowest it’s been since the pre-COVID days. That’s a 21% drop in 3 years. Some 2-bedroom units are even going for under $1,000. Yes, really. The reason? The flood of people moving there dried up, and builders went wild stacking up new apartments like it was 2021 forever. Now there’s more supply than demand, and prices are tanking faster than a crypto rug-pull. At this point, Austin has the cheapest rents ever recorded relative to income. What happens next? Either the population bounces back or landlords start panicking. Source: @nickgerli1

@chamath Just move.

Here, below, is a press release announcing that a person worth $50-100B (depending on SpaceX valuation) has left California. And this is one person! There are many, many others. Now, California’s budget can exclude any tax revenue from Peter Thiel going forward. And it will learn the hard way the many others for whom this is now also true. Why was this asset seizure law, falsely labeled as a “Billionaire Tax”, a smart idea, again? Why didn’t Newsom kill it? Because he wanted more revenue to leak to daycares? All the billionaires are leaving now so only the millionaires and middle class will be left. Mathematically, it means California tax revenue and future income taxes are about to fall off a cliff. Are you still sure the new proposed asset seizures won’t reach you?! How will they pay for the fraud, waste and abuse?

@chamath Bro…..just move to Texas.

Anyone who thinks the California government has a revenue problem is mathematically illiterate or part of the fraud. California does not have a revenue problem. It has a spending problem. Politicians and their henchmen stealing tens of billions of dollars PER YEAR from our pockets. Ask yourself why they can’t pass an audit! Ask yourself why they change the reporting rules on your pension! Do you start to see a pattern? Endless reams of money keep falling through the cracks with no accountability into the waiting hands of thieves. When is enough, enough? California will soon start to lose its grip on being the most vibrant state in America. The billionaires will leave. The millionaires and middle class will too. And once they are done taxing us of everything we have, and none of us are left, they will tax you. Now, if you’re frustrated about crime, healthcare and education you should be. I am, too: our approach to these issues is trash. Our results on these issues are also trash. So fix the problem: kick out the people who run the kleptocracy. Elect real leaders who are competent, firm, tough and high agency. But no matter what you do, if you keep asking for politicians to take people’s money, you are firmly part of the fraud not part of the solution…and everyone sees you.

@multifamilyman_ Rent growth is offset by rising Costs (construction and operations)…. Costs up in the last 2-3 years way more than Rents…the days of underwriting Costs going up 3% a year seem to be over.

Evaluating multifamily fundamentals: From a high level, the demographic fundamentals still support rent growth. Homeownership remains out of reach for many, and the rent-versus-buy gap is wider than ever. Migration is ongoing across growth markets. Job growth, while moderating from peak levels, is still strong in absolute terms. So why isn’t the market ripping right now? In my view, the answer is market-specific supply. In select markets, there’s real upside. When evaluating supply, you have to segment the pipeline: permitted, planned, under construction, and currently leasing. Each stage tells a different story. You also need to localize your analysis. It’s too broad to say “growth markets are oversupplied.” Downtown Nashville might be oversupplied. But what about Franklin? It’s one of the most desirable suburbs in the metro with top-tier demographics and quality of life. Will downtown Nashville rebound in the near term? Hard to say. But will Franklin continue to grow? I’m not certain—but I have much stronger conviction if you’re bringing the right story and the right asset in a location like that. From a capital markets perspective debt and equity are gushing. Most groups are after quality. Landscape remains very competitive. Often times the best deals have 30-50 offers. The sweet spot is $50-60m deal for most with a 20-30m equity fill. Cap rates remain in the 4.5-5.5 range depending on location and quality. Half of those are still falling knifes, the other half perhaps on the upswing. If there’s a story and path to positive leverage, equity will do the deal.

@jayparsons My opinion: these historically low starts are vastly overstated and actual market rate institutional sized (200 units+) starts are actually well below what is being reported.

Multifamily construction starts trailed completions by 223k units over the last 12 months. Ongoing construction totals lowest since 2021, and will almost certainly fall further. Note the big drop long pre-dated tariffs. High rates are much bigger challenge for developers.

We know someone who paid $390k for a home in 2020. They have a 30 year, 3.75% mortgage & home is now worth ~$550,000. They're outgrowing their home & need more space but buying a new home would 2-3x their housing costs. They feel trapped & millions are in this situation.

@aryal1994 When has a Class A renter (Multifamily) ever moved down market to a Class B property? Building materials (via WSJ article) are exempt from Tariffs. MF will actually hold up ok during a recession as folks that traditionally would buy a home are more likely to rent.

How will tariffs and a recession impact real estate? Some economists link tariffs to recession risk. But when it comes to CRE, it’s helpful to isolate their impacts: 1. Tariffs: Development and heavy value-add / capex projects are the most exposed. If you’re underwriting today, it’s worth running worst-case pricing scenarios with tariff-adjusted inputs. 2. Recession: A downturn brings demand-side shocks that play out differently across asset classes: •Hotels: Lower or negative RevPAR growth. •Multifamily: Pressure on highly amenitized Class A assets as renters shift to Class B; potential for higher delinquencies. •Industrial: Slower leasing velocity, but potentially offset by more onshoring and increased warehouse demand. •Office: Standard story — weaker leasing and softer demand. The interplay: If tariffs raise development costs, new supply slows - which may support rent growth for existing assets. But that tailwind could be neutralized if a recession hits and demand weakens. We’re actively stress-testing some of these dynamics as we evaluate new preferred equity opportunities.

@bespokeinvest Should compare to when he won the election not Day 1 of his presidency as the market moved once he was confirmed. The numbers likely still show USA is underperforming but that would be a more accurate analysis.

🚨The US stock market $SPY is now the 2nd worst out of 45 country ETFs since President Trump's term began in January. The US is down 14% versus the average country that's up 3.7%. Germany $EWG is outperforming the US by 25 percentage points.🚨

@VisitTelluride Saw on the river trail…

A little winter buddy poppin' in to say hello 👋🏻 📸: Morgan Pihl

@patrickdichter Vail’s Stock price is down ~30% in last 5 years while the S&P 500 is up +80% over the same time period…. So either Vail has not raised prices enough OR owning ski resorts is a terrible biz…or both.

Most interesting video I’ve seen this week. Vail Resorts putting on a master class in pricing and acquisitions:

@LeylaKuni Any chance you can post the link? I can’t seem to find. 🙏

In other news, you can order a tiny house on Amazon. I’m disappointed to see they don’t offer same day delivery..