The Canovo Report - June 12, 2024

Fed Holds Rates - Only 1 Cut Expected; Logan 5- unit listed for only $450k;

June 12, 2024

This week in the Canovo Report…

👉 Fed Holds Rates Steady - only 1 cut expected in 2024

👉 Big week for duplex sales in Utah

👉 Logan 5- unit listed for only $450k

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Happy Investing,

David

// NEW MULTI-UNIT 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.

$995,000

385 W 400 N Salt Lake City Utah , 84116

Type: 4

Est Proforma Cap: 5.62%

Total Monthly Expenses: 1567

Gross Monthly Income: 6424

$650,000

6977 W Bello Ave West Valley City Utah , 84128

Type: 2

Est Proforma Cap: 6.71%

Total Monthly Expenses: 1123

Gross Monthly Income: 4904

$849,000

2824 W 5600 S Roy Utah , 84067

Type: 4

Est Proforma Cap: 5.53%

Total Monthly Expenses: 1326

Gross Monthly Income: 5400

$450,000

595 E Center St Logan Utah , 84321

Type: 5

Est Proforma Cap: 8.45%

Total Monthly Expenses: 887

Gross Monthly Income: 4180

$450,000

4595 W 5175 S Kearns Utah , 84118

Type: 2

Est Proforma Cap: 8.79%

Total Monthly Expenses: 909

Gross Monthly Income: 4336

$1,500,000

999 S Canyon Rd Ogden Utah , 84404

Type: 2

Est Proforma Cap: 2.15%

Total Monthly Expenses: 1631

Gross Monthly Income: 4458

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 MULTI-UNIT 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.

// FAIR MARKET RENT RATES

> Below you will find the current Fair Market Rents for each Metropolitan Area in Utah as published by HUD.

Fair Market Rents, as defined in 24 CFR 888.113 are estimates of 40th percentile gross rents for standard quality units within a metropolitan area or nonmetropolitan county.

// UTAH MARKET SNAPSHOT

> Utah Multi-Unit (2+ units): Sold Listings & Price Per SqFt

  • The median sold price per sq ft for multi-unit property is up 9.17% year to date going from $232 last year to $254.

  • The total number of multi-unit properties sold is up 13.76% year to date going from 189 last year to 215 ytd.

> Utah Residential Homes: Sold Listings & Price Per Sq Ft

  • The median sold price per sq ft for single family homes is up 4.61% year to date going from $222 last year to $232.

  • The total number of single family homes sold is up .34% year to date going from 15,408 last year to 15,460 ytd.

Source: wfrmls

// INTEREST RATES & FINANCING

> Mortgage Rates as of 6/12/2024

Sponsored by: Spencer Allen | Trillion Mortgage NMLS #2296408

// TOP HEADLINES, REPORTS, & INSIGHTS

The Federal Reserve maintained its key interest rate unchanged and reduced the number of anticipated rate cuts, suggesting cautious optimism about reaching inflation targets.

Main takeaways:

  • Steady Rates with Minimal Cuts: The Fed held its interest rate steady and signaled only one rate cut expected this year, revising down from earlier projections.

  • Inflation and Economic Projections: Despite improvements, inflation remains above the desired 2% target. The Fed raised its inflation outlook slightly for 2024 and does not see inflation returning to target levels until 2026.

  • Market Reactions and Forecasts: The stock market reacted positively to the Fed's announcements, with the S&P 500 hitting a record high. Future projections include more aggressive rate cuts in 2025, reflecting a shift towards potentially easier monetary policy in the longer term.

Despite rising mortgage rates, limited housing inventory and growing demand continue to drive house prices up nationally, with all states seeing appreciation over the past year.

Main takeaways:

  • Utah Price Increase: Utah house prices rose by 53% since Q1 2020 to Q1 2024

  • National Price Increase: U.S. house prices rose by 6.3% from the first quarter of 2023 to the first quarter of 2024, marking continuous annual appreciation since the third quarter of 2012.

  • Significant Growth Since 2020: Nationally, house prices have surged by 47.7% since the first quarter of 2020, with Florida, Maine, and Tennessee experiencing the highest state-level increases.

  • Regional Variations: House price growth has been notably faster in the South and West compared to the Midwest and Northeast, reflecting regional economic trends and migration patterns.

The VA has officially revised its lending rules to allow military borrowers to pay for real estate representation, a change prompted by upcoming adjustments to NAR buyer agent compensation practices.

Main takeaways:

  • Policy Update Announced: The VA now permits veteran borrowers using VA loans to pay "reasonable and customary" buyer-broker charges, including commissions and fees, under certain conditions.

  • Background of the Change: This update comes in response to new NAR rules set to begin in August, which alter how buyer agent fees are handled, potentially putting VA loan users at a disadvantage under the old policy.

  • Support from NAR: NAR President Kevin Sears commended the VA's decision, emphasizing that it aligns military borrowers with the benefits available to other buyers, ensuring competitive fairness in the real estate market.

The policy revision is slated to become effective on August 10, with the VA also considering a permanent policy to maintain this change. This adjustment aims to keep veterans competitive in a transforming brokerage market.

I hope you found this weeks report valuable. If you have any questions, feedback, or if I can serve you in any way, don’t hesitate to reach out!

David Robinson

Principal Broker/Managing Partner

> Whenever you’re ready there are a few ways I can help you:

1. Buy Off-Market Multifamily Properties:Skip the competition and discover exclusive off-market multifamily properties tailored to your investment goals.

2. Broker's Opinion of Value:Curious about your property's worth? Request a free, no-obligation valuation of your rental property.

3. Discreet Private Sale:Prefer a simple, private transaction? Offer your multifamily property discreetly to member’s of our investor database and minimize broker commissions.

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