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- The Canovo Report - March 13, 2024 - SUBS
The Canovo Report - March 13, 2024 - SUBS
🗞️ Canovo Report: March 13, 2024
This week in the Canovo Report…
SLC fourplex sells for $1.1M, Utah ranks for least affordable, Utah multifamily sold units up 18%, CPI shelter report comes in hot, and cap rates may have peaked!
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Happy Investing,
David
// NEW MULTIFAMILY LISTINGS THIS WEEK
> Our team has analyzed these properties using our custom bulk property analyzer. If you’d like more detail regarding any of these listings, click the links below.
$699,900
4735 S Xanadu Cir Taylorsville Utah , 84123
Type: 2
Est Proforma Cap: 4.99%
Total Monthly Expenses: $1,088.40
Gross Monthly Income: $4,122.00
$499,000
1882 W Hyannis Ave West Valley City Utah , 84119
Type: 2
Est Proforma Cap: 5.13%
Total Monthly Expenses: $786.36
Gross Monthly Income: $3,008.00
$574,900
540 E 600 N Payson Utah , 84651
Type: 2
Est Proforma Cap: 4.82%
Total Monthly Expenses: $879.04
Gross Monthly Income: $3,286.00
$520,000
420 E 600 S Payson Utah , 84651
Type: 2
Est Proforma Cap: 5.41%
Total Monthly Expenses: $842.17
Gross Monthly Income: $3,286.00
$375,000
860 E Sullivan Rd Ogden Utah , 84403
Type: 2
Est Proforma Cap: 5.81%
Total Monthly Expenses: $630.18
Gross Monthly Income: $2,522.00
$849,999
2089 E Donegal Cir Salt Lake City Utah , 84109
Type: 2
Est Proforma Cap: 4.54%
Total Monthly Expenses: $1,263.32
Gross Monthly Income: $4,616.00
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.
Buy Off-Market & Top-Performing Multifamily Property in Utah.
// 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.
// 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.
Is it time to sell? Request a Free Brokers Valuation.
// UTAH MARKET SNAPSHOT
> Utah Multifamily (2+ Units): Sold Listings and Price/SqFt
The sold listing count year-to-date sits at 82 which is 18.84% higher than last year which came in at 69.
The average sold price per square foot year-to-date is $244, up 10.14% compared to last year which came in at $221.
> Utah Single Family Residential : Sold Listings and Price/SqFt
The sold listing count year-to-date sits at 5,591 which is 1.93% lower than last year which came in at 5,701.
The average sold price per square foot year-to-date is $255, up 4.10% compared to last year which came in at $245.
Source: wfrmls
// INTEREST RATES & FINANCING
> Mortgage Rates as of 3/12/2024
Source: mortgagenewsdaily.com
Mortgage rates have increased following a higher-than-expected Consumer Price Index report, yet the situation is nuanced with a smaller rise than previously, suggesting potential for future rate-friendly news.
Main takeaways:
The Consumer Price Index (CPI), a key measure of inflation, reported higher than expected, typically driving interest rates up; however, today's mortgage rate increase was modest compared to the previous report.
Despite the increase, mortgage rates remain below the levels seen before the last significant jump, indicating a positive outlook among investors for inflation and economic trends.
Factors in today's CPI report, including a decrease in a major inflation component, offer a glimpse of hope for those anticipating a downturn in inflation, although immediate lower mortgage rates are unlikely without further data.
Sponsored by: Spencer Allen | Trillion Mortgage NMLS #2296408
// TOP HEADLINES, REPORTS, & INSIGHTS
Utah Among the States with Steepest Home Price-to-Income Ratios in 2024, with housing prices significantly outpacing incomes.
Key takeaways:
Utah emerges as the third least affordable state in the U.S. for buying a home, behind Hawaii and California, reflecting the broader challenge of soaring real estate prices against stagnant incomes.
The median home price in Utah ($533,133) is nearly 12 times the average annual income, highlighting the state's affordability crisis amidst a booming real estate market.
Despite the grim outlook for affordability in Utah and other states, the article suggests exploring various locations and considering seasonality in home prices as strategies for finding more budget-friendly housing options.
Most recent CPI Report revealed elevated inflation again in February, heavily influenced by shelter and gasoline prices, complicating the Federal Reserve's rate decision timeline.
Main takeaways:
Shelter and gasoline prices drove more than 60% of February's inflation increase, with shelter costs alone accounting for a significant portion of the core inflation rise.
The Federal Reserve's hands are somewhat tied regarding housing inflation due to the fundamental issue of a lack of affordable housing and rising development costs, suggesting that a solution lies more in increasing housing supply than in monetary policy adjustments.
Despite the Fed's current policy tightening, shelter costs are anticipated to decline in the coming months, supported by real-time data indicating a slowdown in rent growth, offering a glimmer of hope for future inflation control.
Recent trends suggest that capitalization rates, influenced by bond yield movements, might have reached their zenith, indicating a possible easing in real estate investment pressures.
Key takeaways:
Survey responses from industry professionals indicate a belief that bond yields have peaked, suggesting a relieving pressure on capitalization rates.
The fluctuation in bond yields, particularly the 10-year Treasury bond, and its subsequent stabilization offers a cautiously optimistic outlook for real estate investments.
Despite a general expectation of stabilization, specific real estate segments, such as Class C urban office properties, may continue to experience pressure, reflecting the nuanced impact of broader economic trends.
// PASSIVE INVESTOR INSIGHTS
> Canovo Capital Closed On The Purchase of Orchard Lane Apartments in North Salt Lake/Bountiful
Our investment company Canovo Capital just closed on this off-market acquisition. The seller was a true mom and pop owner. They had owned and self manage for a decade of have kept rents extremely low ($750+ below market rent/unit). The seller knew all the tenants by name and were very reluctant to raise rent over the years. This was a forced sale due to a family situation.
Investment Highlights:
Purchase price $9,150,000 (169K per unit)
As Stabilized Appraisal $12,730,000 ($3,580,000 over our price)
2022 Sales Comps $270k – $297k/unit (40% below peak pricing)
$720k average home list price on MLS (1 mile radius)
In place rents are 35% of AMI (extremely affordable)
Bountiful is 98% built out with strict single-family zoning laws (insulated from new supply)
7.75% year 2 stabilized UYOC (unlevered yield on cost).
Well-maintained property all plumbing electrical and water heaters have already been replaced and 90% of HVAC unit replaced.
We are very thankful for our whole team and for all 35 investors that were a part of this deal. If you missed out on this one but would like to be notified of future passive investing opportunities, you can book a brief passive investor intro call here.
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! [email protected]
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