Biden, jobs, and infrastructure; housing market makes it too hot to trade up; Dollywood embarks on major expansion; real estate commissions hit a low; Mynd Management proptech gets cash infusion to fuel big plans.
In Today's News
Biden Touts May Jobs Numbers While Pushing His Infrastructure Plans
President Joe Biden today touted the progress the U.S. has made in its recovery from the coronavirus pandemic and argued now is the time to "seize on the economic momentum" and pass his large-scale infrastructure proposal.
The Millionacres takeaway: A two-fer for real estate investors in this CNN report. The jobs numbers show more growth than in April, and maybe that reflects staffing levels rising at so many retailers hard up for help. And as we've written before, there's a lot in the infrastructure package that would directly affect multiple segments in real estate investing.
Hot Housing Market Leaves People Afraid to Trade Up
In more normal times, first-time homebuyers move into starter homes. As their families grow, they upgrade to bigger houses. Eventually, empty nesters and retirees sell their larger homes to downsize or relocate.
The Millionacres takeaway: This Wall Street Journal piece posted today [subscription required] speaks to that cycle of higher prices actually keeping new inventory off the market, thus helping to drive up prices. Whether it's a vicious or virtuous cycle depends where you are on that spinning wheel.
Dollywood Embarks on Half-Billion-Dollar Expansion
Dolly Parton herself talks to Travel + Leisure about her company's announcement this week that the Dollywood theme park is launching a 10-year, $500 million expansion.
The Millionacres takeaway: That this music icon is a smart business person is not news. The fact her operation is plunking down so much cash for plans that include a new resort to open next year is not just good news for real estate investors around the Pigeon Forge, Tennessee, landmark, but can be taken as a good sign of a turnaround for the pandemic-plagued hospitality sector.
Today on Millionacres
Real Estate Commissions Are at All-Time Lows
There once was a time when 6% was the going commission rate for real estate agents. But recent reports by Real Trends and Realogy Corp. show that the average commission is at less than 5% -- and that percentage is usually split between the listing agent and the buyer's agent.
The Millionacres takeaway: Not only are sellers making a killing in the residential market right now but also holding on to more of their profits because of lower commissions. If you have previously been reluctant to work with a real estate agent because of the commission rate, now might be the time to switch up your strategy, our Barbara Zito writes.
Mynd Over Matter: Proptech Aims to Become Nation's Largest SFR Buyer, Manager
Invesco (NYSE: IVZ) clearly has something in Mynd for the burgeoning single-family rental (SFR) market in the United States. The money manager's real estate arm is the lead investor in a $40 million financing round that's expected to help propel Mynd Management into a buying spree that could reach $5 billion.
The Millionacres takeaway: The market and the metrics make SFRs a hot buy right now, and this will only heat up the competition as Mynd and Invesco take on other institutional investors. That doesn't preclude individual investors from getting involved, of course, through buying into these companies and residential real estate investment trusts (REITs). But it does make it tougher to just go out and buy a rental house of your own.