Housing affordability plummets to lowest levels in over a decade

March 07, 2023

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What's important to know:

The Atlanta Fed's Housing Affordability Monitor shows that housing affordability is worse today than during the peak of the 2008 housing bubble.
As of December, the median American household would have to spend about 42.9% of their income to afford the median-priced house, according to the index.
The typical American is paying about $607 more per month to own a median-priced home compared to last year.
The decline in affordability is due to the highest mortgage rates in years and steep home prices, which rose at a pace not seen since the 1970s during the COVID-19 pandemic.
Homebuyer demand dried up as consumers confronted the steepest mortgage rates in years, further weighing on home prices.

Why the BRRRR strategy for real estate investing is riskier than ever

Real estate investors who used the tried-and-true BRRRR strategy (buy, rehab, rent, refinance, and repeat) to make money are finding it riskier as home prices in hot pandemic markets soften and mortgage rates reach 7%.
Austin is particularly vulnerable, as home prices have fallen drastically since last summer when they peaked.
Higher taxes, building-material costs, and more risk-averse lenders are making the BRRRR model less attractive to investors.
A perfect storm of conditions has dampened cash-out refinances, and landlords are expanding their options to pivot, including long-term renting, short-term renting, or flipping properties.

The Annex Group, a leading impact housing developer, has launched a new property management services division to provide more impactful experiences for communities in the majority of its properties across the US.
The company had previously relied on outside partners for property management services, but has now decided to bring the service in-house to better execute on its mission of creating positive impacts in the lives of all who live in, work at, or are involved with The Annex Group communities.
To lead the property management efforts, The Annex Group has made two notable hires and a promotion, including a Vice President of Property Management, a Director of Community Engagement, and a Director of Operations.
The company has also partnered with Yardi, a compliance software created specifically for the real estate industry, to fulfill property management tasks.

The Ellen Kenna House, an 8,500-square-foot Victorian in Oakland's Clinton neighborhood, has shape-shifted with time, and its current status as a co-living house is emblematic of Oakland's history and the tensions that can arise between legacy Oaklanders and newcomers.
Ellen Kenna, the house's original owner, was a widow who purchased the property with her own money in her own name and hired famed architect Augustus Laver to build the home of her dreams, sparing no expense.
Today, the Ellen Kenna House is a co-living space, complete with 19 bedrooms, nine shared bathrooms, two full kitchens, four communal living and dining spaces, and three sets of washers and dryers.
The co-living space tends to attract working professionals, digital nomads, and traveling nurses new to the neighborhood, and the short-term leases and relatively affordable rent make it particularly sought-after.
The main selling point seems to be access to a built-in community that fosters a sense of belonging.

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