Major apartment developer: 'There is an acute crisis headed our way' say it ain't so...
- Thread starter S2007S
- Start date
I've heard that the multi unit apartment market has gone bananas. High cap rates on high per sq ft rates. It's probably unsustainable. Higher rates could cause defaults among landlords.
Deep pocket landlords will be able to ride it out. With 4-5% 30 year mortgage rate and inflation almost reaching 3%, the math is compelling that buy and hold apartment buildings is almost as good as printing money if you can hang on long enough.
In another thread, some researchers found, long term, real estates matched the returns of equities but with 1/2 the volatility.
I have been looking at condos in San Francisco. A typical 600 sq-ft 1 bed/1 bath condo costs over $3000/month in rent. If you want to buy, the price is north of $700k.
Granted there are many high tech start-ups in San Francisco with good paying jobs, still I wonder how much longer this craziness can last.
Granted there are many high tech start-ups in San Francisco with good paying jobs, still I wonder how much longer this craziness can last.
We went from 2.4 to 2.9 in less than 2 months and aside from recent equity volatility the trend doesn't look massively disrupted.
New York had those rates 15 years ago. And rents are higher than that now.
Yeah. But they will be earning their way out an expensive mistake at 4percent/year.
I think that research is done by real estate developers. It is not true in public traded markets. Here is the return and volatility since REIT's are publicly traded. Portfolio1 is Stocks and portfolio2 is REITs. It has been more volatile.