"Fannie Mae announced last week that it provided nearly $70 billion in multifamily financing last year.
The government lender crowed about $9.6 billion of the total being for affordable housing projects and $13.5 billion financing projects deemed “green and sustainable” units.
This helped Fannie “grow its Multifamily Green MBS (mortgage backed securities) issuance to more than $100 billion last year,” according to the press release.
Fannie Mae apartment loan pricing and terms are attractive: the five-year fixed rate starts at 2.74 percent to the thirty-year fixed starting at 3.81 percent.
Thirty-year amortizations are available and in some cases interest-only loans can be negotiated, as well as non-recourse loans.
The larger point is that with the Consumer Price Index at 7 percent in December, the real interest rate on these Fannie Mae loans is negative.
According to Multi-Housing News,
“On an annual basis through December, rents increased by double-digit percentages in 26 of the top 30 metros, six of which posted gains of 20 percent or more:
Phoenix (25.3 percent),
Tampa (24.6 percent),
Miami (23.5 percent),
Orlando (22.7 percent),
Las Vegas (22.2 percent) and
Austin (20.9 percent).”
So with rents rising and cheap money flowing, the prices of apartment projects are soaring.
The latest Las Vegas multifamily announced sale is Ideal Capital Group’s purchase of the 287-unit Jade project near the Rio hotel and casino for $124.5 million.
That is a whopping $433,798 per unit.
The covid shutdown in 2020 slowed project sales as many renters lost their jobs.
But “Las Vegas’ rental market has since heated up with fast-rising rents and shrunken availability,
in part as people sought more space amid widespread work-from-home arrangements,
and investor sales have rebounded,” reports Eli Segall for the Las Vegas Review-Journal.
Jade went for double 2021’s average sales price per unit, $215,151.
Average apartment sales per unit have risen over 460 percent, from $38,219 in 2011 to last year’s price.
Wolf Richter writes on his site, wolfstreet.com, that working people are harmed by inflation because their wages never catch up, while people with assets, inflated in value by low interest rates, reap the benefit.
He writes,
“The wealth of the wealthiest 1% of households spiked, creating the biggest and worst wealth disparity ever to the bottom 50% and even to the bottom 99%, based on the Fed’s own wealth distribution data.”
Over lunch recently I expressed my astonishment over the $400,000-per-unit sales to a developer (and apartment project owner) I used to bank.
He told me units would be selling for $500,000 by the end of this year.
I said rents would have to jump even more or capitalization rates would have to go to virtually nil for that to happen.
He said emphatically, “Rents are going up.”
People moving in from California believe rents in Vegas are cheap.
Not for long."
1-BR $ Y/Y %
1 Fresno, CA $1,410 28.2%
2 Scottsdale, AZ $1,940 27.6%
3 Orlando, FL $1,620 27.6%
4 Knoxville, TN $1,070 27.4%
5 Boston, MA $2,720 26.5%
6 Glendale, AZ $1,200 26.3%
7 Tampa, FL $1,590 26.2%
8 Austin, TX $1,550 26.0%
9 Miami, FL $2,340 25.8%
10 New York, NY $3,260 25.4%
11 Anchorage, AK $1,140 25.3%
12 Tulsa, OK $800 25.0%
13 Mesa, AZ $1,270 24.5%
14 Boise, ID $1,430 24.3%
15 St Petersburg, FL $1,500 24.0%
16 Las Vegas, NV $1,240 24.0%
17 Jacksonville, FL $1,190 22.7%
18 Gilbert, AZ $1,620 20.9%
19 Henderson, NV $1,560 20.0%
20 Chattanooga, TN $1,200 20.0%
21 Laredo, TX $770 18.5%
22 Seattle, WA $1,820 16.7%
23 Detroit, MI $1,040 15.6%
24 Irving, TX $1,270 15.5%
25 El Paso, TX $820 15.5%
26 Bakersfield, CA $980 15.3%
27 Raleigh, NC $1,210 15.2%
28 Lincoln, NE $910 15.2%
29 Plano, TX $1,370 15.1%
30 Tucson, AZ $840 15.1%
31 San Diego, CA $2,070 15.0%
32 Denver, CO $1,610 15.0%
33 Chandler, AZ $1,530 15.0%
34 Reno, NV $1,230 15.0%
The 8 Cities where 1-BR rents fell
1-BR $ Y/Y %
1 Newark, NJ $1,310 -25.1%
2 Milwaukee, WI $1,000 -16.7%
3 Richmond, VA $1,110 -12.6%
4 Minneapolis, MN $1,190 -8.5%
5 St Louis, MO $920 -7.1%
6 Kansas City, MO $950 -5.0%
7 Cincinnati, OH $890 -4.3%
8 New Orleans, LA $1,400 -1.4%
1-BR $ Y/Y % 2-BR $ Y/Y%
1 New York, NY $3,260 25.4% $3,400 27.3%
2 San Francisco, CA $2,850 6.3% $3,930 12.3%
3 Boston, MA $2,720 26.5% $3,150 26.0%
4 San Jose, CA $2,390 12.2% $2,870 7.9%
5 Miami, FL $2,340 25.8% $3,100 24.0%
6 Washington, DC $2,250 14.8% $3,010 14.9%
7 Los Angeles, CA $2,220 14.4% $2,940 8.9%
8 Oakland, CA $2,100 5.0% $2,770 9.5%
9 San Diego, CA $2,070 15.0% $2,900 20.8%
10 Scottsdale, AZ $1,940 27.6% $2,660 26.7%
11 Fort Lauderdale, FL $1,940 14.8% $2,810 27.7%
12 Santa Ana, CA $1,940 14.1% $2,600 15.0%
13 Seattle, WA $1,820 16.7% $2,570 25.4%
14 Anaheim, CA $1,790 7.8% $2,400 18.8%
15 Atlanta, GA $1,700 14.9% $2,140 15.1%
16 Long Beach, CA $1,700 6.3% $2,320 14.9%
17 Honolulu, HI $1,660 13.7% $2,190 15.3%
18 Orlando, FL $1,620 27.6% $1,850 27.6%
19 Gilbert, AZ $1,620 20.9% $1,850 14.9%
20 Denver, CO $1,610 15.0% $2,210 15.1%
21 Tampa, FL $1,590 26.2% $1,810 27.5%
22 Sacramento, CA $1,590 13.6% $1,870 8.1%
23 Chicago, IL $1,590 3.2% $1,800 -4.8%
24 Providence, RI $1,580 8.2% $1,860 3.3%
25 Henderson, NV $1,560 20.0% $1,620 14.9%
26 Austin, TX $1,550 26.0% $1,930 25.3%
27 Chandler, AZ $1,530 15.0% $1,880 20.5%
28 St Petersburg, FL $1,500 24.0% $2,190 25.1%
29 Portland, OR $1,500 7.1% $1,830 6.4%
30 Nashville, TN $1,490 14.6% $1,670 15.2%
31 Philadelphia, PA $1,470 8.9% $1,780 4.7%
32 Boise, ID $1,430 24.3% $1,550 21.1%
33 Fresno, CA $1,410 28.2% $1,700 26.9%
34 Charlotte, NC $1,400 14.8% $1,630 12.4%
35 Dallas, TX $1,400 14.8% $1,880 14.6%
36 New Orleans, LA $1,400 -1.4% $1,800 5.9%
37 Plano, TX $1,370 15.1% $1,940 25.2%
38 Cleveland, OH $1,310 13.9% $1,360 13.3%
39 Newark, NJ $1,310 -25.1% $1,660 -14.9%
40 Baltimore, MD $1,290 9.3% $1,400 4.5%
41 Virginia Beach, VA $1,280 13.3% $1,450 11.5%
42 Mesa, AZ $1,270 24.5% $1,580 21.5%
43 Irving, TX $1,270 15.5% $1,660 15.3%
44 Durham, NC $1,250 6.8% $1,450 15.1%
45 Las Vegas, NV $1,240 24.0% $1,530 27.5%
46 Reno, NV $1,230 15.0% $1,640 14.7%
47 Houston, TX $1,220 10.9% $1,500 10.3%
48 Raleigh, NC $1,210 15.2% $1,440 15.2%
49 Salt Lake City, UT $1,210 13.1% $1,510 13.5%
50 Glendale, AZ $1,200 26.3% $1,440 22.0%
51 Chattanooga, TN $1,200 20.0% $1,300 14.0%
52 Pittsburgh, PA $1,200 11.1% $1,410 8.5%
53 Jacksonville, FL $1,190 22.7% $1,400 22.8%
54 Minneapolis, MN $1,190 -8.5% $1,740 -2.8%
55 Fort Worth, TX $1,180 9.3% $1,550 10.7%
56 Aurora, CO $1,180 6.3% $1,610 12.6%
57 Phoenix, AZ $1,160 14.9% $1,460 15.0%
58 Chesapeake, VA $1,160 6.4% $1,380 15.0%
59 Anchorage, AK $1,140 25.3% $1,270 10.4%
60 Norfolk, VA $1,120 14.3% $1,350 22.7%
61 Richmond, VA $1,110 -12.6% $1,380 -6.8%
62 Colorado Springs, CO $1,090 0.0% $1,390 6.9%
63 Madison, WI $1,080 0.9% $1,450 4.3%
64 Knoxville, TN $1,070 27.4% $1,240 24.0%
65 San Antonio, TX $1,070 12.6% $1,370 18.1%
66 Buffalo, NY $1,050 0.0% $1,150 -0.9%
67 Detroit, MI $1,040 15.6% $1,100 1.9%
68 Rochester, NY $1,040 3.0% $1,250 4.2%
69 Arlington, TX $1,030 8.4% $1,330 10.8%
70 Spokane, WA $1,010 14.8% $1,300 15.0%
71 Milwaukee, WI $1,000 -16.7% $1,150 -8.0%
72 Bakersfield, CA $980 15.3% $1,280 16.4%
73 Louisville, KY $950 9.2% $1,090 14.7%
74 Indianapolis, IN $950 1.1% $1,050 5.0%
75 Kansas City, MO $950 -5.0% $1,200 3.4%
76 Augusta, GA $920 12.2% $1,050 14.1%
77 St Louis, MO $920 -7.1% $1,250 0.0%
78 Lincoln, NE $910 15.2% $1,050 15.4%
79 Tallahassee, FL $910 13.8% $1,000 7.5%
80 Syracuse, NY $910 8.3% $1,020 5.2%
81 Memphis, TN $900 8.4% $980 11.4%
82 Corpus Christi, TX $900 5.9% $1,150 3.6%
83 Des Moines, IA $900 1.1% $950 1.1%
84 Winston Salem, NC $890 11.3% $980 12.6%
85 Cincinnati, OH $890 -4.3% $1,230 7.9%
86 Omaha, NE $880 10.0% $1,100 6.8%
87 Columbus, OH $880 2.3% $1,100 0.9%
88 Albuquerque, NM $850 14.9% $1,090 14.7%
89 Greensboro, NC $850 2.4% $960 4.3%
90 Tucson, AZ $840 15.1% $1,190 21.4%
91 Baton Rouge, LA $840 5.0% $990 4.2%
92 El Paso, TX $820 15.5% $1,030 18.4%
93 Lexington, KY $810 6.6% $1,030 8.4%
94 Tulsa, OK $800 25.0% $970 16.9%
95 Oklahoma City, OK $800 3.9% $960 6.7%
96 Laredo, TX $770 18.5% $920 -6.1%
97 Shreveport, LA $700 6.1% $800 6.7%
98 Lubbock, TX $670 3.1% $830 -2.4%
99 Akron, OH $650 8.3% $800 8.1%
100 Wichita, KS $620 1.6% $800 6.7%
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