Proposition 10: A Threat to All Property Owners and Investors
Earthquakes, interest rates and affordable housing
Azzi Advisors would like to share the latest top stories in real estate news relevant to you.
Property owners rattled after 6.0 earthquake hits Napa
Over the past few months, Azzi Advisors has kept you up-to-date on the earthquake retrofitting legislation debate in Los Angeles. Last Sunday’s 6.0-magnitude earthquake in Napa is a stark reminder that devastating destruction and financial loss can occur. Once again, the cities of LA and Santa Monica are taking note and pushing to enforce retrofitting requirements for at-risk, soft-story buildings. Be sure your asset is secure, or speak to one of our advisors about your options.
Click here to read the full article at The Los Angeles Times.
Despite seismic retrofits, some older brick buildings in Napa still suffered damage after the quake last Sunday. Fred Turner, a structural engineer with the California Seismic Safety Commission, said that although retrofits can reduce damage, bricks of older buildings can still tumble because of deteriorated mortar. “We can’t keep every single brick in place in many of these older buildings without extraordinarily costly retrofits,” said Turner.
Interest rates may rise sooner than expected, causing challenges for buyers and sellers
Continually working to keep you updated, Azzi Advisors is also staying on top of the recent news involving rising interest rates. The Los Angeles Times recently reported that Federal Reserve officials are debating the rise of interest rates to reflect growth in the job market. If rates increase, selling assets will become more challenging and buying will become more costly. It’s important to review your real estate portfolio and investment strategy now to make sure you know the perfect time to buy and sell in the current market.
Click here to read the full article at The Los Angeles Times.
Federal Reserve officials have recently debated to raise interest rates to reflect the recent growth in the job market and inflation. However, Chairwoman Janet L. Yellen has stated that the labor market isn’t as strong as the rapid drop in the jobless rate might suggest, due to involuntary part-time employees, high long-term joblessness, and stagnant wage growth. Some Fed members still remain concerned that the Fed will wait too long before raising rates, resulting in increased inflation.
Harvard study indicates 40M U.S. families are unable to afford housing
The increased price of housing has affected millions of renters across the nation, an issue that has impacted the rental market significantly. More and more families have continued to rent instead of own single-family homes, increasing rental demand and setting vacancy rates at record lows. According to a recent study from Harvard, the annual return on investment for apartment owners has remained above 10% since 2010.
Click here to read more on Daily Mail.
It’s good news for multifamily property owners who are looking to receive a high return on investment. The proportion of renters who pay more than 30% of their income on housing has risen 12% in the last 10 years. Although the development of affordable housing projects has slowed, the industry has a high demand for luxury apartments, and many projects are currently underway.
