Home price rally broad and deep, senior housing industry and vaccine mandates, housing repairs lower crime, IRS and some opportunity zone corrections, young folk return to the cities.
In Today’s News
U.S. Home Prices Soared at Record Pace in June
The S&P CoreLogic Case-Shiller 20-city home price index soared 19.1% in June compared with a year earlier, the largest increase in records dating back to 2000, The Associated Press reports today.
The Millionacres takeaway: Adding to the depth of this rally is the breadth: The annual price gains in June were higher in all 20 cities than they were in May and are now at record highs in 19 of the 20 markets, with the exception of Chicago.
Senior Housing Industry Faces Higher Costs in Its Lead Role in Vaccine Mandate
The senior housing business, one of the hardest-hit commercial property sectors early in the pandemic, is now getting hammered by rising labor costs as it takes a lead role in mandating vaccines for employees and a Medicare/Medicaid mandate looms, The Wall Street Journal reports today [subscription required].
The Millionacres takeaway: Speaking of roles, senior living centers occupy a lot of real estate investment dollars, not only among individual investors but in healthcare real estate investment trusts (REITs). This segment has been having a rough ride since the pandemic began, for multiple reasons.
A Surprising Lever for Reducing Crime: Housing Repairs
Bloomberg reports today that a long-running Philadelphia city program that provided residents of aging neighborhoods with up to $20,000 for home repairs, prioritizing structural fixes like plumbing and roofing, experienced 22% less crime overall and 22% fewer homicides than they likely would have if not for the repairs.
The Millionacres takeaway: This research took a look at what happened in the mostly Black and Latino neighborhoods where 13,000 of these grants were awarded. That’s a lot of data that supports the idea that investing in run-down neighborhoods as they are can help sustain and grow their value as investments and affordable places to live.
Today on Millionacres
What Investors Should Know About IRS Opportunity Zone 'Corrections'
Billions of dollars have poured into the Opportunity Zone Program since it was created by the Tax Cuts and Jobs Act in 2017, and the IRS issued final guidance at the end of 2019. Now the revenuer has just changed some of the rules about what can be done with the money sitting there waiting to be invested.
The Millionacres takeaway: These changes should give investors interested in funding start-up companies more confidence that they’re satisfying safe harbor requirements. However, investors may still want to check with their tax advisors before filing that next Form 8996.
Young Birds of a Feather Flock Together, and the Rents Rise
While the return to the central cities for work is being disrupted as more and more employers push out their reopening plans thanks to the delta variant, there’s one cohort of city campers happy to be heading back: young adults. And that’s good news for owners of the rental property those young folks are after.
The Millionacres takeaway: Regardless of how you approach the opportunity -- through individual buys, partnerships, or REITs -- as long as your approach is reasoned and researched, now seems like a good time to stake a claim in this rental rally.