Landlords Say They're Raising Prices Again

DAILY REAL ESTATE NEWS | THURSDAY, APRIL 23, 2015

CEOs of the largest companies renting out single-family homes say they plan to raise rents up to 5.7 percent this year.  Investors are switching their focus from buying properties to optimizing the revenue from the thousands of properties they bought, taking advantage of the increased demand for rental homes, Bloomberg reports.

Read more: Why Renters May Be in Trouble

“In the 2015 rental season, we’re really seeing the ability to move rents,” David Singelyn, chief executive officer of American Homes 4 Rent—the largest publicly-traded single-family landlord, with about 35,000 homes—said at a recent conference in Miami Beach, Fla.

Large-scale investors—those who purchase at least 10 properties a year—have spent about $68 million snatching up 528,000 single-family rental homes since 2011, according to a report last month by Haendel St. Juste, a Morgan Stanley analyst. Now the CEOs of Silver Bay, Starwood Waypoint, American Residential Properties, and Blackstone Group all say they plan to raise rents this year.

“We are focusing aggressively on rent bumps,” Stephen Schmitz, American Residential Properties CEO, said during a panel discussion. “There’s a supply imbalance in some markets. The same thing that keeps occupancy high also drives rents.” Schmitz says they plan to bump up rental rates by 4 percent on renewals and up to 5.7 percent for new tenants.

Source: “U.S. Single-Family Landlords Are Raising Rents, CEOs Say,” Bloomberg (April 21, 2015)

http://realtormag.realtor.org/daily-news/2015/04/23/landlords-say-theyre-raising-prices-again

www.KallhoffTeam.com

Fannie: Economy Likely to 'Spring Forward'

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 21, 2015

Economic activity weakened in the first quarter of the year, mostly attributed to bad weather conditions across the Northeast and West Coast port disruptions. But the economy will likely gain momentum throughout the spring, which is expected to give a lift to the ongoing housing recovery, according to Fannie Mae’s Economic & Strategic Research Group.

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"We have downsized our first-quarter economic growth expectations in light of several transitory factors that weighed on consumption," says Doug Duncan, Fannie Mae's chief economist. "Although some momentum was lost in the first quarter as consumers remained cautious in their spending, perhaps putting an emphasis on repairing their personal balance sheets and replenishing savings, we expect that consumer spending will catch up during the second quarter and continue in subsequent months, supporting our forecast of 2.8 percent growth for the year. We believe this momentum will carry over into the housing market, as well, particularly if strong consumer income growth continues."

However, Fannie Mae economists caution that there could be some volatility, particularly with consumer spending and the financial markets, leading up to the Federal Reserve’s first expected rate hike in the coming months. 

Source: "Q1 Economic Growth Measures Downsized, But Expected to Spring Forward," Fannie Mae (April 20, 2015)

http://realtormag.realtor.org/daily-news/2015/04/21/fannie-economy-likely-spring-forward

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Price Jumps Are Leading to More House Flips

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 21, 2015

More investors are flipping properties again, a trend that started last year and is building momentum across the country, according to Auction.com's First Quarter 2015 Real Estate Investor Activity Report.

Read more: Where the House Flippers Are: 10 Markets

Investors lately are showing more interest in purchasing a home to flip than renting it out. In fact there was a 6.5 percent quarter-over-quarter increase in favor of flipping in the first quarter of 2015.

"It seems clear that the unusually low inventory of homes for sale has led to higher home prices, which makes it challenging for investors to rent homes out at a rate that’s profitable, and still affordable for tenants," says Rick Sharga, Auction.com's executive vice president. "So in states like California, Washington, Nevada, and Arizona a large number of investors have decided that the best opportunity today is to meet the demand of prospective home owners by buying, fixing, and re-selling investment properties."

Survey respondents indicated a preference toward flipping over a rent-to-hold strategy in every state Auction.com conducts live auction events. The West and Midwest had the largest margins of investors favoring flipping over renting. The five states that had some of the largest numbers of investors in favor of flipping over renting were Nevada, California, Washington, Idaho, and North Carolina.

However, the preference depends on investor profile, Auction.com’s survey found. Survey respondents who said they were making a one-time purchase still tended to prefer a hold-to-rent strategy. On the other hand, survey respondents who identified themselves as full-time “real estate investors” and those who work on behalf of another investor showed a preference toward flipping.

Source: Auction.com

http://realtormag.realtor.org/daily-news/2015/04/21/price-jumps-are-leading-more-house-flips

www.KallhoffTeam.com