The End of Skyrocketing Rents?

February 27, 2023

Rise and shine! It's a new day and The Shaker is here to serve you the best mix of residential real estate news. Yummy yummy.

What you should know:

January marks the 12th consecutive month of slowed rent growth in the US.
Lower-priced parts of the country had the most significant rent increase, with the Midwest and South seeing an increase of 10.5% in Indianapolis, 8.8% in Birmingham, and 8.3% in Columbus, OH, respectively.
The rental growth rate may have slowed, but affordability concerns continue to be a significant issue for tenants.
Prices may increase in some of the nation's priciest metros like San Francisco and San Jose due to a return to office mandates, leading to a boost in rental demand and increased rental prices.
Rents for studios saw the most significant increase in price, while two-bedroom apartments saw the smallest increase.

All-Cash Home Purchases on the Rise

The all-cash trend in real estate purchases is becoming increasingly prevalent, with nearly one-third of U.S. homes bought with cash in 2022.
The trend is being led by buyers who have significant wealth, including retirees, foreign buyers, and high-wealth individuals.
The rise in all-cash purchases is causing concern, as it suggests a fundamental problem with society if only the wealthy can afford to buy homes.
Affluent buyers who can pay in cash are in a financially advantageous situation as they avoid high mortgage interest rates that exacerbate home prices.
FHA loans have become popular for those who need bank financing, but they are still at a disadvantage compared to cash buyers.
The trend is likely to continue as U.S. home values have increased, and longtime homeowners are relocating to more affordable cities.

San Francisco could theoretically create 2,775 new housing units by converting 12 office buildings into residential spaces.
Gensler's study found that one-third of the buildings it analyzed were good candidates for conversion into residential spaces.
San Francisco's government could encourage the conversion projects with policy changes, such as offering incentives or subsidies.
The process of converting an office building into a residential space can be expensive, which could deter some developers from taking on these projects.
The study could provide developers and city planners with guidance on the most suitable buildings for conversion, as well as providing an opportunity to add to the city's housing inventory.

The tiny dumpster home was inspired by another Caukin Studio project: an art installation in a skip.
It was in collaboration with a company called Skip Gallery, which commissioned artists to create artwork in the confines of a skip.
Marshall built the tiny home in a few months mostly in his spare time in the evenings. He started living in the tiny home last month.
The tiny home has a mezzanine bed, sink, and a kitchen area where he makes sandwiches.
There's also a small water tank, which he refills from a hose belonging to the neighbor's property, so he can wash dishes, and brush his teeth. There's no flushing toilet, however.