😨Banking Crisis 2.0 and SFR Hotspots
Banks scramble for liquidity after a long week of defaults, credit shocks and bailouts
It’s been a rollercoaster week for regional banks and credit unions!
A lot big banks couldn't handle the heat, and now the Fed is looking for ways to take the turn down the pressure without affecting the rest of the market.
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Luckily, real estate hasn’t been as hard hit and the crash even opened a up a few new opportunities.
With Silvergate and SVB biting the dust, the Federal Reserve may take it easy on raising interest rates.
This could mean lower borrowing costs and lead to a potential surge in demand for housing.
Single-family real estate in particular is showing a lot of promise with strong yields and increased demand.
In this edition of the AltReports:
🏦 Banking crisis 2.0
🏡 Strong yields in a down market
🔥 SFR hotspots
💳 Debt buyouts
🤝 Bargaining season
The recent downfall of three major banks has sent shockwaves through the already-fragile economy. And it's got me thinking - what impact could this have on the real estate market?
With the Silicon Valley Bank and other financial institutions failing, the Federal Reserve may not be as aggressive in raising its short-term interest rates.
This could potentially create an opportunity for us in the real estate market.
The single-family market has had a great start to the year.
Permits are up 7 and starts are up 19% both of which have been fuelled by the ongoing lack of inventory.
For investors, more inventory will continue to drive acquisition costs down while rental yields are still high.
Speaking of single-family properties, the average annual gross rental yield on three-bedroom properties is projected to be 7.5% in 2023, up from 6.7% in 2022.
This is great news for investors, as rental yields are increasing even while home prices are flattening out.
This report also highlights the counties with the highest and lowest potential annual gross rental yields for 2023.
Investors Pile Into property debt as banks bail on landlords
Just like in the US, European banks have stepped away from real estate loans, leaving the doors wide open for private lenders.
Not to mention the recent run on banks that has made them even more wary of investing in real estate as values continue to plunge.
Total housing inventory at the end of January was 2.1% higher than December and 15.3% higher than one year ago.
So If you're looking to buy, now may be a good time to get a deal.
Homes sitting on the market for more than 60 days are being bought for 10% less than the original list price.
Video of the week
Bank lending for commercial real estate has begun to decline.
Hard money lenders now have a chance to take advantage of that need.
Ran Eliasaf from Northwind Group explains how doing so has allowed them to work with premier developers and generate better returns.
Chart of the week