- The Canovo Report
- Posts
- The Canovo Report - December 12, 2023
The Canovo Report - December 12, 2023
🗞️ The Canovo Report: New multifamily listings, A Riverdale 4-plex sells for an estimated 8% cap rate,
Happy Tuesday! This week in the Canovo Report…
New multifamily listings, An 8% estimated cap rate on a Riverdale 4-plex, It’s 71% cheaper to rent than buy along the Wasatch Front, and…
The FED may actually achieve a soft landing.
If you find value in our weekly report, please consider forwarding it to a friend! If this is your first time here, you can subscribe here.
Happy Investing,
David Robinson
Featured Multifamily Listings This Week
> Our team has analyzed these deals using our custom bulk property analyzer. If you’d like more detail regarding any of these listings, click the links below. If you’d like to learn how we help exclusive investor clients find and acquire top-performing multifamily, click here.
$700,000.00
3556 S Colby Ave West Valley City Utah , 84128
Type: 2 Unit
Est Proforma Cap: 5.68%
Total Monthly Expenses: $1,162.57
Gross Monthly Income: $4,616.00
$825,000.00
343 E Lambourne Ave South Salt Lake Utah , 84115
Type: 4 Unit
Est Proforma Cap: 5.20%
Total Monthly Expenses: $1,308.93
Gross Monthly Income: $5,032.00
$649,900.00
672 N 300 E American Fork Utah , 84003
Type: 2 Unit
Est Proforma Cap: 5.16%
Total Monthly Expenses: $1,027.22
Gross Monthly Income: $3,938.00
$550,000.00
1012 S West Temple Salt Lake City Utah , 84101
Type: 4 Unit
Est Proforma Cap: 8.20%
Total Monthly Expenses: $1,124.22
Gross Monthly Income: $5,032.00
$500,000.00
5025 W Hoopes St Salt Lake City Utah
Type: Mother In Law
Est Proforma Cap: 7.31%
Total Monthly Expenses: $954.13
Gross Monthly Income: $4,122.00
$465,000.00
752 W 400 S Provo Utah
Type: Mother In Law
Est Proforma Cap: 6.15%
Total Monthly Expenses: $805.23
Gross Monthly Income: $3,286.00
Canovo Group may not be the listing brokerage for the above properties. The information provided is not guaranteed and should not be relied upon to make investment decisions. Buyers should complete their own analysis and due diligence before making any investment.
Sold Multifamily Listings Last Week
> Here's a roundup of multifamily properties sold over the past week. We've estimated their selling cap rates using our bulk analyzer. Curious about your property's value? Request a complimentary broker's opinion of value.
What is Your Property Worth? Request a Free Valuation.
Utah Market Data
> 71% Cheaper to rent than buy along the Wasatch Front
It’s no surprise that the Wasatch Front has experienced a significant shift in housing costs over the last few years but the following chart may be surprising. A recent graph - courtesy of Dejan Eskic a Senior Research Fellow at The Kem C. Gardner Policy Institute - shows a comparison of the costs of renting and owning a single-family home in Utah and reveals a widening gap that has implications for both current residents and prospective homeowners.
Source: Dejan Eskic
From 2010 through 2023, the graph illustrates two distinct trends:
The median monthly payment for a single-family home has seen a sharp rise, particularly from 2020 onwards. In early 2023, this cost reached an unprecedented high of $3,581.
In contrast, the median rent for a single-family home has also increased but at a steadier, more gradual pace. As of early 2023, the median rent stands at $2,092.
The graph indicates a growing affordability challenge for potential buyers in Utah, as the cost of homeownership outpaces the cost of renting by a significant margin. Without significant interest rate relief, this could lead to a larger proportion of the population opting to rent rather than buy, which may, in turn, cause rental prices to rise further.
Interest Rates and Financing
Sponsored: Spencer Allen | Trillion Mortgage NMLS #2296408
> Nearing Seven Percent, Mortgage Rates Continue to Decrease
The 30-year fixed-rate mortgage averaged near 7 percent this past week, down from nearly 7.80 percent just six weeks ago. When rates began to rapidly drop, purchase applications rebounded initially, but this improvement in demand diminished in the last week. Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand. (more)
Source: freddiemac.com
Other Top News, Reports and Insights
> Gov. Cox’s to spend $150 Billion to Attack Utah Housing Crisis
Summary:Real estate agents in Utah are reacting positively to Governor Spencer Cox's recent $150 million proposal aimed at mitigating the state's housing crisis. This plan includes building 35,000 new starter homes over the next five years, providing $50 million in assistance for first-time homebuyers, and the appointment of a Senior Advisor for Housing Strategy and Innovation. Former state Rep. Steve Waldrip has been appointed as Cox's housing advisor, and his role will involve collaborating with local governments and the building community to develop a housing plan that increases the availability and innovation of housing in Utah.
Key Takeaways:
Governor Cox's $150 million plan aims to address Utah's housing crisis by building 35,000 new starter homes over the next five years and offering $50 million in assistance for first-time homebuyers.
Challenges like high housing costs, rising interest rates, and inflation are making it difficult for buyers, particularly in keeping potential homeowners out of the market.
The appointment of Steve Waldrip as Cox's housing advisor is a step towards developing a comprehensive plan to increase housing availability and innovation in Utah. (More)
> Fed to start cutting rates midyear in 2024 with high chance of soft landing, CNBC Fed survey finds.
Summary: The CNBC Fed Survey indicates a cautiously optimistic outlook for the U.S. economy, with expectations of the Federal Reserve beginning to cut interest rates in mid-2024. The survey, consisting of opinions from economists, strategists, and analysts, shows an increased belief in a soft economic landing, with a reduced probability of a recession within the next year. Despite this, concerns remain about a potential economic slowdown, indicated by a projected rise in unemployment and modest GDP growth.
Key Takeaways:
Interest Rate Cuts Expected: The Federal Reserve is likely to start reducing interest rates by mid-2024, with an average forecast of 85 basis points of cuts throughout the year.
Increased Optimism for Soft Landing: The probability of achieving a soft landing is now seen at 47%, with a corresponding decrease in the likelihood of a recession within the next year.
Economic Slowdown Concerns: Despite the positive outlook, there's an anticipation of an economic slowdown, with unemployment potentially rising to 4.5% and GDP growth projected just below 1%. (More)
> Considering investing in a multifamily property? The National Apartment Investment Market Index (AIMI) for the second quarter of 2023 shows mixed trends in the real estate market. The index is at 108.6, reflecting a 5.1% increase over the quarter but a 2.6% decrease over the last year. This suggests that finding good investment opportunities in the market is more challenging than it was a year ago. Factors like employment growth, multifamily permits, net operating income, and property prices all play a role in this change. The increase in mortgage rates and the decrease in property prices are significant influences on the market dynamics.
Key Takeaways:
AIMI Index: 108.6, up 5.1% over the quarter but down 2.6% over the year.
Employment Growth: Currently at 2.5%, higher than the historical average of 0.8%.
Multifamily Permits: Saw a 4.1% decline annually but are 157.1% above the historical average.
Net Operating Income (NOI): Grew by 1.8% annually, slightly below the historical average of 2.7%.
Property Prices: Dropped by 10.1% annually, a stark contrast to the historical average growth of 4.5%.
Market Influences: Higher mortgage rates and lower property prices are key factors affecting the market. (More)
We hope you found this weeks report valuable. If you have any questions, feedback, or if we can serve you in any way, don’t hesitate to reach out!
" target="_blank">unsubscribe