A tight housing market has pushed prices out of reach for a large chunk of would-be buyers across the U.S., forcing millions into an apartment market that digs deep into […]
Developers and lenders in the seniors housing sector have for years only allowed new construction to proceed at a modest pace. The development community’s aim was to avoid the mistakes […]
A tight housing market has pushed prices out of reach for a large chunk of would-be buyers across the U.S., forcing millions into an apartment market that digs deep into monthly paychecks for rent, especially in high-cost markets like Miami.
Nearly 39 million U.S. residents live in homes they can’t afford, according to a national housing report released Friday by Harvard University. The findings point to a growing concern over housing affordability and shines a glaring light on Miami-Dade County’s pricey market.
Miami was one of 11 large metropolitan areas where more than 40 percent of households were cost-burdened, meaning over 30 percent of their income was gobbled up by housing costs.
“While the recovery in home prices reflects a welcome pickup in demand, it is also being driven by very tight supply,” said Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies. “Any excess housing that may have been built during the boom years has been absorbed, and a stronger supply response is going to be needed to keep pace with demand — particularly for moderately priced homes.”
Apartment dwellers have it worse. Among Miami renters alone, 62 percent were considered cost-burdened while 35 percent spent more than half their income on rent.
The report also highlighted Daytona Beach, where 57 percent of renters spent over a third of their income on rent in 2016. The least affordable cities were not ranked.
The affordability struggle is a function of rising demand for housing combined with limited — and costly — supply.
Fewer residential units were built in the U.S. over the past decade than in any 10-year period since the 1960s. A large portion of the new homes tend to cater to higher-end purchasers, not first-time homebuyers.
“Construction of smaller starter homes is particularly low,” the report said.
The for-sale inventory hit a record low at the end of 2016, further squeezing supply of homes on the market. The result? More and more people are renting rather than buying. The national rental vacancy rate dropped to its lowest level in three decades last year.
However, most apartment units built are considered luxury. Twelve of the 20 rental developments with 50 or more units built in Miami-Dade in 2015 were high-end with the average rent swaying near $2,100, according to a study by RentCafe.
The total number of units renting for less than $800 in Miami declined by about 20,000 to 131,000 from 2005 to 2015. The number of apartments renting for over $2,400 more than doubled since then to 42,000.
The U.S. housing market hit a significant milestone last year when home prices reached their pre-recession peak. This helped reduce the number of homeowners underwater on their mortgages to 3.2 million from 12 million in 2011.
While Miami-Dade home prices have risen 74 percent since 2000, they’re still below their peak. About 16 percent of homeowners remained underwater on their mortgages in 2016, more than double the national rate.
Carla Vianna, Daily Business Review
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Developers and lenders in the seniors housing sector have for years only allowed new construction to proceed at a modest pace. The development community’s aim was to avoid the mistakes made in past booms, when too many inexperienced operators built too much new product. However, developers have recently picked up the pace a bit as an aging population has steadily boosted demand.
And according to a new report from the National Investment Center for Seniors Housing & Care, the seniors housing annual inventory growth rate in the first quarter of 2017 was 3.4%, up 0.2 percentage point from the prior quarter and the fastest pace since at least 2006.
“It was another active quarter for inventory growth, with nearly 4,800 units added to the seniors housing stock” in 31 primary markets, says Beth Burnham Mace, chief economist for Annapolis, MD-based NIC. “At the same time, demand slowed during the quarter, as is typically the case in the first quarter due to the seasonal effects of the winter months. Some of the slowdown in net absorption may also reflect the severity of the 2016/2017 flu season.”
The pace of new construction helped push down the US occupancy rate for seniors housing properties, according to NIC. The rate in the first quarter averaged 89.3%, a decrease of 0.3 percentage point from the prior quarter and was down 0.6 percentage point from one year earlier.
That was 2.4 percentage points above its cyclical low of 86.9% during the first quarter of 2010 and 0.9 percentage point below its most recent high of 90.2% in the fourth quarter of 2014.
Seniors housing annual absorption was 2.8% as of the first quarter of 2017, up 0.1 percentage point from the fourth quarter of 2016 and up 0.2 percentage point from one year earlier, NIC adds.
The expansion of the nation’s inventory has not hurt rental rates. During the first quarter of 2017, the average rate of senior housing’s annual asking rent growth was 3.3%, up from 3.1% in the first quarter of 2016.
“Considering the continued strong inventory growth and sustained levels of construction, this solid same-store rent growth is notable,” says Chuck Harry, NIC’s chief of research and analytics.
As reported in GlobeSt.com APRIL 17, 2017 | BY BRIAN J. ROGAL
Miami-Dade Near Top Nationally in Struggle With Housing Affordability
UncategorizedA tight housing market has pushed prices out of reach for a large chunk of would-be buyers across the U.S., forcing millions into an apartment market that digs deep into […]
Seniors Housing Inventory Growing Fast
UncategorizedDevelopers and lenders in the seniors housing sector have for years only allowed new construction to proceed at a modest pace. The development community’s aim was to avoid the mistakes […]