July 2021
Multifamily Rent Growth and Occupancy at Historic Levels

As we discussed last quarter, the housing market continues to gain unprecedented momentum. Multifamily asking rents increased by 6.3% on a year-over-year comparison, according to Yardi. This is the largest year-over-year increase nationally since the firm started collecting the data. Class A, Class B, and Class C properties all achieved occupancy above 96% for the first time since 2000.
Rents grew $23 in June alone to a record setting $1,482 per month average. For the first time since 2011, Lifestyle (renters by choice) rents grew at a faster pace than those who rent by necessity. This is also despite a robust supply of new units coming to market. Single family rents grew at an even faster pace of 11% YoY. The number of occupied apartments in the nation’s 150 largest metros climbed by 219,909 units, according to analytics firm Real Page. This compares to the meager 33,000 unit increase at the end of Q2 2020, given than many households were locked down during that period, and illustrates how drastically the market has improved.
Population migration to the Southwest and Southeast continues and helped to fuel some astonishing rental increases. Phoenix led the nation with 17% rent growth followed by the Inland Empire and Tampa (both at 15.1%), Las Vegas (14.6%), and Atlanta (13.3%). Phoenix leads the nation for population growth as people continue to move from California and other higher cost cities around the country. The for sale housing market in Phoenix is equally strong, with prices up 22% YoY. Overall rents in Phoenix have increased by over $200 in the last year.
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Housing starts increase, but builders still lack supplies

Completions down as material constraints continue

Single‐family housing starts in June were at a rate of 1,160,000, up from 1,091,000 in May. Single‐family housing completions, however, were at a rate of 902,000 — down from May’s revised rate of 961,000.

It’s the third-highest number of housing starts builders have broken ground on in one month since May of 2006, a sign of strong buyer demand. But the decrease in permits is also a signal that difficulties persist, said Matthew Speakman, Zillow economist.

“Construction activity could be even higher given a bit more long-term certainty and an easing of critical supply chain volatility,” Speakman said. “While lumber prices have fallen back to earth after the prolonged surge that began last spring, disruptions are now pushing up prices of other key building materials — including steel, concrete, and lighting, and making other important supplies very difficult to come by.”

Multifamily Industry Sees Surge of Liquidity

Experts say it’s an attractive environment for both lenders and borrowers.

“Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) are providing liquidity to all market segments, maintaining stable pricing and predictable execution. We also are seeing rising participation by private lenders as COVID-related risk receded,” he says. “The result: Liquidity has been deep, making it an attractive environment for both borrowers and lenders.”

While Fannie Mae and Freddie Mac as well as the FHA are providing essential capital, they’re not the only ones. Hilary Provinse, executive vice president and head of mortgage banking at Berkadia, says the market is experiencing a surge of liquidity from other capital sources, such as debt funds, regional and national banks, and life companies.

“We have seen an abundance of equity and debt financing solutions in the multifamily lending market in 2021,” says Provinse.

Housing inventory slowly coming back as frenzy fades

Historic price growth has harmed some households' ability to afford their next home

“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”

Properties typically remained on the market for 17 days in June, unchanged from May and down from 24 days in June 2020. Eighty-nine percent of homes sold in June 2021 were on the market for less than a month. First-time buyers accounted for 31% of sales in June, also even with May but down from 35% in June 2020.

“The combination of low mortgage interest rates, an improving economy and demographic factors continues to stoke buyer demand and fuel market competition,” said Matthew Speakman, Zillow economist. “But historic price growth nationwide has weakened some households’ ability to afford their next home and a shortage of available inventory appears to have left some would-be buyers discouraged.”

On the lighter side....
About CALCAP Advisors
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 $350mm in Assets Under Management. To learn more visit
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.
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