Rate Cuts Ahead!

Utah Multi-unit Surge Continues - 32 New Listings; Millcreek Duplex Sells for $387/Unit; Homie Sues NAR and Other Utah Brokerages

Author

David Robinson
August 28, 2024

This week in the Canovo Report…

  • Rate Cuts Ahead! 50 points possible?

  • Multi-unit Surge Continues - 32 New Listings This Week

  • Millcreek Duplex Sells for $387/Unit

  • Homie Sues NAR and Other Utah Brokerages

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Happy Investing,

David

New Listings

> 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.

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 Listings

> Here's a roundup of multifamily properties sold over the past week. We've estimated their selling cap rates using our bulk analyzer.

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Utah Market Snapshot

> Multi-Unit (2+ Units): Total Sold and Price Per Sq Ft

  • The median sold price/sf for multi-unit property is up 6.29% year to date going from $239 last year and $254 this year to date.

  • The total listings sold for multi-unit property is up 17.08% year to date going from 281 last year and currently at 329.

> Multi-Unit (2+ Units): Active Listings and Price Per Sq Ft

  • The median asking price/sf for active multi-unit listings is down 3.43% going from $266 last year and $257 currently.

  • The total number of multi-unit listings is up 47% going from 185 last year and 272 currently.

> Single Family Homes: Total Sold and Price Per Sq Ft

  • The median sold price/sf for single family homes is up 3.47% year to date going from $224 last year and $232 this year to date.

  • The total listings sold for single family homes is down 1.61% year to date going from 23,549 last year and currently at 23,928.

Rates & Financing

> Mortgage Rates as of 8/28/024

Source: Mortgage News Daily

Property Management

> Create an Annual Tenant Survey to Enhance Property Management

Consider implementing an annual tenant survey as part of your property management strategy. This survey should go beyond the basics of satisfaction and delve into specific areas such as the effectiveness of communication, the quality of maintenance services, and overall living experience. By asking targeted questions, you can gather actionable insights that allow you to make data-driven improvements. Moreover, sharing the results and your plans to address any concerns shows tenants that their feedback is valued, which can significantly boost tenant loyalty and trust. This proactive approach not only helps you identify potential issues before they escalate but also fosters a community-oriented environment that tenants appreciate.

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Headlines & Insights

This week’s key economic indicators and Federal Reserve communications point towards an impending rate cut, likely to be announced at the September meeting. With Fed Chairman Powell hinting at policy adjustments, the likelihood of a 25 basis point cut seems high, though a 50 basis point cut remains possible depending on upcoming labor market data. As economic signals continue to evolve, the Fed's stance is shifting from aggressive tightening to a more cautious easing approach.

Key Takeaways:

  • Treasury Yields: 10T at 3.80%, 2T at 3.91%, with SOFR at 5.31%.

  • Fed Commentary: Powell and other Fed officials are increasingly open to rate cuts, though the size and timing depend on forthcoming data, particularly labor market trends.

  • Market Response: Speculation grows around a September rate cut, with potential for a more aggressive easing if unemployment rates rise significantly.

  • Upcoming Data: Focus on GDP and PCE figures later this week, with labor market data next week expected to heavily influence the Fed’s rate decision.

Other News and Reports

Homie Sues NAR: Homie, a flat-fee brokerage, has filed a lawsuit against the National Association of Realtors and several top brokerages, alleging anti-competitive practices and steering in the Utah market. The complaint accuses industry leaders of conspiring to suppress innovation and maintain high commission rates, highlighting instances where agents refused to show properties due to lower commissions. This lawsuit comes amidst broader scrutiny over real estate brokerage competition and commission structures.

Investor Surge: Investor home purchases increased by 3.4% year-over-year in the second quarter, marking the largest growth in two years. Investors, driven by robust renter demand and high property prices, acquired $43 billion in properties, with single-family homes comprising the majority of these investments. This trend reflects a significant shift in the housing market dynamics, emphasizing the growing influence of investors amid challenging affordability conditions for typical homebuyers.

Mortgage Relief: For the first time since 2020, the median U.S. monthly mortgage payment has seen a slight annual decline to $2,587, sparking increased homebuying interest. With mortgage rates stabilizing at a 15-month low, house hunters are actively returning to the market, evidenced by a rise in home tours and inquiries, though this surge has yet to significantly impact sales figures.

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David Robinson

Principal Broker/Managing Partner

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