James Y. Kuang Realtor Blog Real Estate San Gabriel Valley Homes For Sale: July 2018

Tuesday, July 17, 2018

Wall Street Is Taking an Even Bigger Bet on Rentals

Investors are bullish that more Americans will choose to be renters, and they’re buying up even more single-family homes to make sure they are ahead of the trend. The number of homes purchased by major investors in 2017 was about 29,000, up 60 percent from the previous year, according to Amherst Capital Management LLC, a real estate investment firm. That is also the first time since 2013 that investors purchased more homes on an annual basis.

Investors are increasingly eyeing single-family homes over apartments. A rising number of apartments in recent years have increased vacancies and driven down rental yields. That has prompted investors to turn back to single-family homes for rentals.

Investors are reportedly raising billions of dollars to purchase more homes this year, and they are targeting areas like Atlanta, Phoenix, and other metros with fast-growing economies.

Pretium Partners LLC, an investment firm, announced Monday that it had raised more than $1 billion for its Progress Residential to add 26,000 rental homes to its portfolio.

In markets where there is little inventory to buy, some investors are building new. Transcendent Investment Management LLC , a south Florida firm, has secured more than $250 million to build thousands of rental homes in Southeast Florida.

"We're seeing a wider variety of investors coming into this asset class: sovereign-wealth funds, insurance companies, hedge funds, pensions, asset managers," Sandeep Bordia, Amherst's head of Research and Analytics, told The Wall Street Journal.

Investors are also targeting wealthier tenants for single-family home rentals. They tend to have children and need more bedrooms than apartments can offer, and they also may be more willing to weather rent increases in order to remain in a good school district.

Some of the fastest-growing markets for rental-home investments over the past year, according to ATTOM Data Solutions, a real estate data firm, are: Green Bay, Wis.; Myrtle Beach, S.C.; Sevierville, Tenn.; Syracuse, N.Y.; Anchorage, Alaska; and Charleston, W. Va.

SOURCE: DAILY REAL ESTATE NEWS

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Tuesday, July 3, 2018

Mobile Homes Could Fill Large Inventory Gaps

Home inventory of has fallen near record lows across the country, but more consumers are in need of a place to live. Some economists say manufactured homes—also known as mobile homes or trailers—may be the answer to relieve housing shortages in some markets starved for greater affordable housing.

About 5.6 percent of Americans—or 17.7 million—live in manufactured homes. These types of homes provide shelter for one in 10 households who live below the poverty line, according to a new report released by Apartment List, a real estate listing service.

Sydney Bennet, author of the report and a senior research associate at Apartment List, believes the number of people living in manufactured housing could grow significantly as the need for affordable housing grows more dire.

In the nation’s 100 largest metros, residents living in manufactured homes—either renting or owning—spend an average of 40 percent less on housing than those living in more traditional “stick-built” homes. The average monthly gross housing cost for a mobile home is $564, compared with $1,057 for a traditionally built home or apartment, according to the report by Apartment List. (The gross housing cost includes rent or mortgage payments and property taxes, lot rent for mobile homes, and utility costs.)

Seniors on fixed incomes may find the option more appealing. Upscale mobile home parks are popping up that are aimed at attracting the 55-plus crowd, offering spacious “double-wide” trailers, community centers, and pools, among other amenities.

But buying a mobile home is different than purchasing a stick-built home. Mobile homes are sold separate from the land in the trailer park. Also, mobile homes are classified as either a real estate property or personal property. Buyers can finance a purchase through a traditional mortgage if the property is classified as real estate. However, the majority of manufactured loans are financed as personal property with a chattel loan, which usually come with high rates and shorter loan terms.

Mortgage financing giants Fannie Mae and Freddie Mac are viewing manufactured housing as a potential solution to ease shortages of affordable homes. The government-sponsored enterprises announced plans in January to purchase more manufactured housing loans over the next three years.