81: America is Screaming for Affordable Housing, But No One Wants to Build w/Lu Chen and Thomas LaSalvia
On The Market
Shownotes Transcript
The** housing market has entered into a new era** never measured before. As of a recent update from Moody’s Analytics, the rent-to-income ratio across the US has reached an average of 30%. And while this may not seem like a big deal to casual investors, it has wide-reaching implications that could cause the housing market to move in different directions. This is the first time a rent-to-income ratio has hit this high percentage point, which could spell bad news for landlords.
Lu Chen and Thomas LaSalvia from Moody’s Commercial Real Estate division) are joining us to explain the entire story behind the data. They have been closely monitoring the **steadily rising **rent prices) for decades. With pandemic-fueled migration, Lu and Thomas both believe that we’re living in one of the most troubling times for renters. But how did this come to be? With massive housing development across the nation, what’s causing rents to remain so high? The answer isn’t what you might expect.
Lu and Thomas have seen developers shift focus to certain housing types, leaving much of the middle class in a rent squeeze. This “missing middle” could explain why so many families are paying a solid portion of their income to rent every month. But with reasonably priced rentals becoming a hot commodity,** what can landlords do to ease the burden and open up more housing **for those who need it most? And where will rent head next after it’s broken through this previously unshatterable ceiling? Tune in and find out!
In This Episode We Cover
Housing affordability) and why America just crossed into** “rent-burdened” **territory
The “ecosystem effect” and how pricier developments hurt the middle class
Housing demand and why work-from-home hotspots) put strain on the system
Housing markets where rent is declining and the rent-to-income ratio) is weakening
Where Americans are moving to and why some millennials are staying away from the suburbs
**Real estate development **and which housing types are getting built
Comparing today’s rent crisis to 2008 and why a housing correction doesn’t always equal a rent crash
And So Much More!
Links from the Show
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Key Takeaways from 4th Quarter)
Connect with Lu and Thomas:
Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-81
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