CALCAP CONNECTIONS
NOVEMBER 2019
PRINCIPAL'S CORNER
In a Seeming Paradox, U.S. Homeownership and Apartment Occupancy Rates Both Increase

According to the U.S. Census Bureau, the national homeownership rate increased to 64.8% ending Q3 19. This was up 0.7% from Q2 19 (64.1%), and 0.4% from Q3 18 (64.4%). The peak of U.S. homeownership occurred in the third quarter of 2006, when the rate hit 69.0%. This rate moves up and down quarter over quarter and has averaged 63.9% over the past 5 years.
 
While the homeownership rate increased last quarter, so did apartment occupancy rates, which seems counterintuitive, but speaks to the continued strong demand for apartment rentals. In Q3, the U.S. absorbed 281,800 apartment units, according to data firm, RealPage. The U.S. occupancy rate hit 96.3% in the 3rd quarter. This is the highest rate since the tech boom peak in the second half of 2000.
  "While the home ownership rate bumped up a bit in the most recent quarter, it's possible for both the for-sale sector and the rental sector to perform well at the same time," RealPage Chief Economist Greg Willett said. "Demand for apartments in the prime leasing season of 2nd and 3rd quarters proved extremely strong, hitting two-decade highs in many metros." One factor contributing to the increase in homeownership was lower interest rates. After hitting almost 5% last November, rates on a 30-years mortgage fell to an average of 3.68% in October, according to Freddie Mac.

According to ATTOM Data Solutions, the median priced home rose to $270,000 in the third quarter, up 2.9% from the previous quarter, and 8.3% YOY-reaching a new high. ATTOM's Chief Product Officer, Todd Teta stated, "The third quarter was the strongest in four years, as mortgage rates sank back to near-historic lows, which clearly powered the market upward along with stock market surges and a continued strong economy. There had been signs before the latest surge of a cooling market, but they seem to have diminished, at least for now."


Onward and upward. Have a Safe and Happy Thanksgiving Weekend.

If you are interested in learning more about what we do, please visit us at www.calcapadvisors.com

Sincerely,

Edward M. Aloe
President and CEO
626-229-9057
Check out our new website!

Latest Headlines...
Millennials continue to outpace older generations in homebuying
 
Millennials are moving more, spending more and buying more 
 
The median price of a primary home purchased by Millennials went up 6%, to $250,000 compared to last year. Generation X and baby boomers only increased their purchase prices by 5% and 2%, respectively.
 
Millennials are also increasing the size of loans they are taking out to buy a home, as this generation had a median loan amount of $231,590 in September. This is 7.3% higher than last year.

Zillow: A Quarter of Renters Feel Stressed 

About half of renters (49%) feel they are about maxed out financially and say they would not be able to afford an unexpected $1,000 expense.

With affordability challenges growing in much of the country - renters typically spend a larger share of their income on rent than they did a year ago in 28 of the 35 biggest markets in the U.S. - 42% of renters said that they ended up in a location outside of the area they initially considered. The most common reason was not being able to afford homes in their preferred neighborhood.

Multifamily rents gain 3.2%
 
Occupancy has also been doing well
 
Multifamily rent increased by just $1, to $1,476. Year over year rent growth remained at 3.2%.
 
Of the 30 major markets covered in the report, 17 saw year-over-year rent growth of at least 3.3%. San Jose and Houston remained below the 2.5% long-term average.

On the Lighter side...
About CALCAP Advisors
About CALCAP
California Capital Real Estate Advisors, Inc., and its affiliate entities (CALCAP Asset Management I & II, CALCAP Properties, CALCAP Lending, and CALCAP Senior Healthcare I, collectively known as "CALCAP"), is a California based investment company founded and 2008 and headquartered in Pasadena, California. The Company sponsors alternative real estate investment opportunities focused on demographically driven housing. CALCAP has been able to consistently provide both individual and institutional investors with outstanding returns over the last 10 years. The Company's core strategies look to actively create alpha for investors while managing risk. CALCAP currently has over $300mm in Assets Under Management. To learn more visit www.calcapadvisors.com.
 
Social Mission
CALCAP has created the CALCAP CARES program to encourage employees to find a way to give back to the neighborhoods where we invest. CALCAP has created "GiveTime4Autism" as its initial program which will allow employees the ability to donate unused vacation and sick days for a very worthy cause. 
LOS ANGELES
The Sanborn House
65 N. Catalina Avenue   
Pasadena, CA 91106

SAN DIEGO 
12626 High Bluff Drive, Suite 360
San Diego, CA 92130 

PHOENIX
740 N. 52nd Suite 200
Phoenix,AZ 85008 

SANTA BARBARA
1309 State Street Suite A
Santa Barbara, CA 93101


IRVINE
2603 Main Street, Suite 850
Irvine, CA 92614

Edward M. Aloe, President & CEO
(626) 229-9057


Patrick A. Wakeman, Principal
(858) 764-4890

Drew Buccino, Principal and COO
(602) 419-3381

Greg Blix
Director of Investor Relations
(805) 896-8500

Len Israel
CEO, CALCAP Lending, LLC
949-439-1044

Mark A. Mozilo, Principal
(626) 229-9056
View our website: www.calcapadvisors.com  
Stay Connected: