Grocery Stores' Impact on the Housing Market

BY  ON AUGUST 23, 2019

Did you know that a Trader Joe’s or an ALDI near your property might increase its ROI?  This is according to ATTOM Data’s recent Grocery Store Battle analysis that looked at how living near a Trader Joe’s, a Whole Foods or an ALDI can affect your home’s value – or flipping ROI!    Interestingly, for investors they found that properties near an ALDI are an investor’s cornucopia with an average gross flipping ROI of 62%, compared to those near a Whole Foods which had an average gross flipping ROI of 35% and Trader Joe’s at 31 percent. The average gross flipping ROI for all zip codes with these grocery stores nationwide is 52%.  Take that to the pantry!  Happy Friday!!

Hat tip to ATTOM Data.

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Turning Obsolete Buildings into Climate Controlled Self-Storage

BY  ON AUGUST 22, 2019

Have you ever thought about turning obsolete buildings into climate controlled self-storage?  That subject was tackled in a recent episode of the Rental Property Owner & Real Estate Investor podcast.   Host Brian Hamrick interviews Scott Krone, the managing partner of Coda Management Group, a company that teams up with investors to purchase and convert undervalued warehouse space into climate controlled Self-Storage Facilities.  Scott explains how the adaptive re-use of commercial space can be turned into an asset class that is very attractive & extremely profitable.  He explains the process of converting old warehouse space into self-storage, including his typical costs per sq. ft. for acquisition, construction & soft costs.

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Mortgage Delinquencies Rise in Q2

BY  ON AUGUST 22, 2019

According to the latest Mortgage Bankers Association (MBA) National Delinquency Survey, mortgage delinquencies increased 11 basis points from the first quarter of 2019 and 17 basis points from one year ago.  The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.53% of all loans outstanding at the end of the second quarter of 2019.  The foreclosure inventory rate came in at 0.9%  at the end of Q2, which was the lowest since the fourth quarter of 1995.  In addition, they point out that on a year-over-year basis, total mortgage delinquencies increased for all loans outstanding.  The delinquency rate increased by 16 basis points for conventional loans, increased 52 basis points for FHA loans, and increased 27 basis points for VA loans from the previous year.

“The unemployment rate remains quite low, but the national mortgage delinquency rate in the second quarter rose from both the first quarter and one year ago. The economy is slowing, and this poses the risk of further increases in delinquency rates,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Across loan types, the FHA delinquency rate posted the largest variance, increasing 29 basis points from last quarter and 52 basis points from a year ago.”

MBA Chart of the week 8/16/19

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Mortgage Debt Hits Record, Eclipsing 2008 Peak

BY  ON AUGUST 21, 2019

A recent report from the Wall Street Journal (reposted by says that U.S. mortgage debt reached a record in Q2, exceeding a peak last seen in 2008.   Data from the Federal Reserve Bank of New York show that mortgage balances were up $162 billion to $9.406 trillion.  The previous high water mark was $9.294 trillion back in Q3 of 2008. The article also pointed out that total household debt has been on the rise since mid-2013 rising 1.4% in the first quarter to $13.86 trillion, marking the 20th consecutive quarter of increases.  Indeed…

“The big picture is that when you look at mortgages, which is the biggest piece of [household debt], it still looks pretty healthy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase, noting that while household debt has grown, so have incomes.

Just for a point of historical reference, the chart below shows mortgage rates since 1974:

Historical 30-year fixed rate mortgage rates – John Burns Real Estate Consulting


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Click here to read the full story at the Wall Street Journal.

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Yardi Says Rents Show Impressive & Consistent Performance

BY  ON AUGUST 20, 2019

According to the latest Yardi Matrix, U.S. multifamily rents rose in July, coming in at $1,469 with year-over-year growth increasing to 3.4% (up 10 basis points from June).  Yardi says multifamily rents continued their impressive and consistent performance but cautions that there is potential for market volatility and slower growth.  Indeed…

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WalletHub’s Best Places to Flip Houses

Where are the best places to flip houses in America?  While they don’t have an actual crystal ball, WalletHub recently looked at over 170 American cities, using over 29 different criteria such as market potential, cost and quality of life to come up with a list of the best places to find flips.  However, for all of you wannabe Tarek & Christinas out there, they do caution that it’s not quite as easy as it is on TV:

If you’re among the millions of HGTV viewers who’ve seen an episode of “Flip or Flop,” you’ve probably thought about the thrill of gutting a house and turning a five- or six-figure profit. But the process isn’t as easy as the professionals on television make it look. Any experienced home flipper would caution you that transforming a fixer-upper into a profitable property is a difficult process.


Source: WalletHub

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Best Housing Markets for Growth and Stability

Smartasset says that two major factors, “growth and stability” are key indicators of a property’s value (good and bad) as time marches forward.  Naturally, owners want a stable environment where the value will grow over time and not risk pushing them underwater if they have a mortgage.   That being said, Smartasset ran the numbers to find metro areas that are the best bets for growth & stability. They compared home value data for every quarter over a 25-year period through Q4 2018.

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Shortage of Labor Still Hurting Affordability

We have had several posts about labor shortages in the building industry over the past couple years and the problem doesn’t seem to be getting better, despite a good economy.   According to a recent builder survey from the National Association of Home Builders, labor and subcontractor shortages continue to remain widespread and are putting additional upward pressure on new home prices.  Their survey listed 15 specific occupations with framing crews experiencing the greatest manpower shortages.  Indeed…

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Role of Housing in the Longest Economic Expansion

The lessons learned from the so-called “Great Recession” will be many and the housing market is no exception.  A new report from CoreLogic says the housing market was the “Comeback Kid” for its evolutionary role during our current economic expansion.  They attribute stable job growth, mortgage funding and underwriting for the housing market’s recovery from its historic crash.  Their report digs further into these factors and analyzes the market’s performance during our current period of economic expansion.

“Homeownership is considered a crucial step to wealth accumulation. However, the Great Recession tested this long-held belief.”

“…In addition to a more encouraging market, changes in homes and buyers have made flipping more sustainable – professionals are flipping older homes with the median age of the homes being 39 years.”

Key takeaways:

  • The number of homes with negative equity has decreased
  • Total home equity hits new record
  • Since 2010, the housing flip rate has increased significantly
  • Strong recovery for home prices and rents

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20 Best College Towns to Buy an Investment Property

COLLEGE; belushi.comRedfin reminds us that college towns are consistently some of the best places to own investment properties in America.  To that end, they looked at college towns across the country using several metrics such as affordability, walkability, and the price of education relative to its quality & value.  Their data came from U.S. News and World Report’s National Universities Rankings list.

“Demand for rental properties in college towns remains high due to steady demand. From new students to university faculty coming in each year, you’ll never find yourself scrambling to rent out your place…”

  1. Binghamton, NY – Binghamton University – SUNY
  2. Syracuse, NY  – SUNY College of Environmental Science and Forestry and Syracuse University
  3. Buffalo, NY  – University of Buffalo
  4. Gainesville, FL – University of Florida
  5. Athens, GA – University of Georgia
  6. Champaign, IL – University of Illinois Urbana-Champaign
  7. Baltimore, MD – John Hopkins University
  8. Tallahassee, FL – Florida State University
  9. Cleveland, OH – Case Western Reserve University
  10. St Louis, MO – Washington University in St. Louis
  11. Columbus, OH – Ohio State University – Columbus
  12. Pittsburgh, PA – University of Pittsburgh and Carnegie Mellon University
  13. Rochester, NY – University of Rochester
  14. New Haven, CT  – Yale University
  15. Provo, UT – Brigham Young University – Provo
  16. West Lafayette, IN – Purdue University – West Lafayette
  17. Philadelphia, PA – Temple University and the University of Pennsylvania
  18. Troy, NY – Rensselaer Polytechnic Institute
  19. Albany, NY – University of Albany – SUNY
  20. Lawrence, KS – University of Kansas

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