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5 at 5: Your Daily Digest for Real Estate Investing, 4/8/21


Apr 08, 2021 by Marc Rapport
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REITs rule the first quarter, Manhattan apartment rentals filling up, national housing sentiment jumps, eviction moratoriums and when it's time to sell, and a look at Vacasa.

In Today's News

2020 Real Estate Losers, Like Hotel and Mall Owners, Starred in the First Quarter

Real estate investment trusts (REITs) overall rose 9% during the first quarter of 2021, beating the S&P 500's 6% gain, according to data-analytics firm Green Street. Fueling the REIT rally was an 18% rise in the shares of lodging owners and a 32% gain by mall owners, The Wall Street Journal reports [subscription required].

The Millionacres takeaway: That investor confidence seems to be reflected in announcements about stronger sales and store expansions by such retail stalwarts as Gap (NYSE: GPS) and Burlington Stores (NYSE: BURL). Whether that confidence is spot on or misplaced will become clear soon enough.

Manhattan Renters Scoop Up Lingering Units in Discount Frenzy

Even Manhattan's longest-lingering apartment units are finding takers amid landlord discounts that sent new leases surging, Bloomberg reports [subscription required], and two major players there report the biggest one-month new leasing totals in 10 years of record-keeping.

The Millionacres takeaway: The pandemic-fueled flight from city living -- whether apartments or condos or single-family houses -- may be a temporary phenomenon, if the price is low enough to renew demand. And that's true in all markets, isn't it?

Housing Sentiment Jumps on Consumers' Selling, Personal Finance Optimism

The Fannie Mae (OTCMKTS: FNMA) Home Purchase Sentiment Index (HPSI) increased in March by 5.2 points to 81.7, the big GSE said this week. Four of the HPSI's six components increased month over month, including the components related to homebuying and home-selling conditions, household income, and home prices. Only the mortgage rate outlook sentiment declined.

The Millionacres takeaway: Fannie Mae's chief economist says consumer optimism appears to be fueled by the vaccination rollout, stimulus checks, and a spring homebuying season set to make up for lost ground last year. As if that market could get any hotter.

Today on Millionacres

Eviction Moratoriums Keep Coming: Time for Landlords to Sell?

Renters aren't the only ones in a tight position right now as the coronavirus pandemic wages on. A recent STOUT Institute study estimated that by January 2021, landlords would be owed more than $34.3 billion in back rent, meaning landlords, particularly small landlords in the single-family rental business, are feeling the pinch as eviction moratoriums continue to be extended.

The Millionacres takeaway: Our Liz Brumer takes a look at when enough's enough and it's time to sell and move on to an easier way to make a buck. Factors for consideration: a red-hot housing market to sell into and the possibility of difficulty finding tenants who can pay the rent if and when the moratoriums are history. No easy decisions here.

Vacasa Acquires Turnkey Vacation Rentals: The Investor Takeaway

Vacasa, one of the leading vacation rental platforms, is acquiring one of its competitors, Turnkey Vacation Rentals. The acquisition will bring Vacasa's total portfolio to roughly 30,000 properties.

The Millionacres takeaway: Our Jeff Piltch explains the difference between the Vacasa business model and Airbnb (NASDAQ: ABNB) and shares some other considerations to keep in mind for those who own vacation rentals or are considering investing in them.

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Marc Rapport has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Airbnb, Inc. The Motley Fool has a disclosure policy.