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In this Real Estate News Brief for the week ending April 8th, 2023... reports show a slowly weakening job market, what could be a great year for single-family rentals, and a list of the top metros for home value growth and stability.\\xa0

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Hi, I\'m Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

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We begin with economic news from this past week. Although the job market remains strong, the latest reports show it is softening. For the week of March 25th, jobless claims hit 228,000. It\\u2019s the ninth week in a row that they\\u2019ve topped 200,000. They had bottomed out last fall when they dropped to a 53-year low of 182,000. They continued around the 200,000 level for several months and have been slowly rising since February. Government revisions also show that claims during the first part of the year were higher than previously reported. MarketWatch economists say that\\u2019s probably due to corporate layoffs that are just now showing up in the jobless data. (1)

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Job openings are also declining. They fell to a 21-month low in February, which is another sign that the job market is softening. Listings dropped from 10.6 million in January to 9.9 million in February. Openings are now down to about 1.7 openings for each unemployed worker. They were at 1.9 openings or each unemployed worker previously. Bill Adams of Comerica told MarketWatch: \\u201cThe labor market is still very hot but the big drop in job openings is a sign the labor market is cooling in general.\\u201d (2)

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A third report on job growth shows that U.S. companies added 236,000 new jobs in March. That\\u2019s a sign of strength and resiliency, and probably not what the Fed would like to hear. Those new jobs helped lower the unemployment rate from 3.6% to 3.5%. Wage growth was slower however. It\\u2019s come down from 4.6% in February to 4.2% in March. (3)

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A report on construction spending shows it was down slightly in February. The Commerce Department says it fell .1% to $1.844 trillion. Single-family construction spending was down 1.8% while multi-family spending was up 1.4%. Year-over-year, multifamily is up 22.2%. Single-family is up 21.4%. (4)

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Mortgage rates dipped slightly this last week. Freddie Mac says the average 30-year fixed-rate mortgage was down 4 basis points to 6.28%. The 15-year was down 8 points to 5.64%. (5)

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In other news making headlines\\u2026

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Some parts of the housing market may be in for a rough ride this year, but the single-family rental market isn\\u2019t one of them. A new report from Attom projected single-family rental yields for 212 counties with a population of at least 100,000. Rental yields are calculated by dividing the annualized gross rent by the purchase price. According to Attom, rentals in those 212 counties will see a 7.5% yield this year. That\\u2019s up from 6.7% last year. (6)

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Attom says that SFR rents are growing in over 90 of the counties analyzed, so those counties will be the most desirable. Three of the top five counties for the biggest upside in rent yields are in Florida including counties for Miami, Fort Lauderdale, and West Palm Beach. California\\u2019s Orange and Santa Clara counties are the other two. There\\u2019s a lot of data in this report so it\\u2019s worth digging deeper if you\\u2019re deciding where to buy a rental property this year. You\\u2019ll find a link to the report in the show notes.

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Another report on the U.S. housing market lists the top 20 cities for growth and stability, and 12 of them are in Texas. The Smart Asset study compared home value data for 400 metros between 1998 and 2022. It then calculated the growth rate from that data. (7)

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The Austin, Texas, area was In the number one spot for growth and stability followed by Midland, Texas, in the Western part of the state. Boulder and Fort Collins, Colorado, took the third and fourth spots. The Kennewick-Richland part of Washington State was fifth. Rapid City South Dakota took the sixth position. Then it\\u2019s back to Texas with the Odessa area in West Texas as seventh and the Dallas area as eighth. San Antonio was in the ninth spot, and Houston right after that. Texas also dominated the next ten top cities as well with six more metros showing the strongest growth and stability.

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The report also shows the worst cities for growth and stability with Flint Michigan topping that list. I won\\u2019t list those cities, but you\\u2019ll find a link to the report in the show notes.

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While there has been a lot of concern that commercial real estate is going to implode because of maturing debt and the inability to refinance at high interest rate, CNBC published a story with the title: \\u201cThe coming commercial real estate crash that may never happen.\\u201d This story argues that only a quarter of office-building loans will need to be refinanced in the next year.\\xa0 A quarter of office-buildings? That sounds like a LOT to me.\\xa0

CNBC also reports that industrial, retail, and hotels are on solid ground. (8) Kevin Fagan of Moody\\u2019s Analytics says: \\u201cThere likely will be issues but it\\u2019s more of a typical down cycle.\\u201d Whether it\'s a typical down cycle or a rare one, losing money is never good for investors and is usually a result of aggressive underwriting in a bull market.

According to The RealDeal, distress has started to rear its ugly head in the Houston market. Arbor Realty Trust just foreclosed last week on four low-income multifamily properties in Houston, valued at $229 million. The portfolio includes Heights at Post Oak, Redford Apartments, Reserve at Westwood and Timber Ridge Apartments, all of which were purchased between August 2021 and April 2022. (10)

The RealDeal says Arbor\\u2019s foreclosure is "indicative of the current state of the market, where higher interest rates, regional banking turmoil, and slowing rent growth continue to negatively impact multifamily operators. Investors decreased their purchase of apartment buildings by about $40 billion in the first quarter of 2023, representing a 74% decline in sales from the first quarter of last year, according to CoStar Group.

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That\\u2019s it for today. Check the show notes for links at newsforinvestors.com. As always, I ask that you sign up as a RealWealth member. It\\u2019s free and will give you complete access to our market data and resources. And please remember to hit the subscribe button, and leave a review!

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Thanks for listening. I\'m Kathy Fettke.

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1 - https://www.marketwatch.com/story/jobless-claims-top-200-000-after-changes-to-formula-for-seasonal-adjustments-877bfe37?mod=home-page

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2 - https://www.marketwatch.com/story/job-openings-in-the-u-s-fall-to-21-month-low-of-9-9-million-cd1fc5ee?mod=home-page

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3 - https://www.marketwatch.com/story/jobs-report-shows-236-000-increase-in-employment-in-march-9656b5fc

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4 - https://www.marketwatch.com/story/construction-spending-falls-in-february-90188a02?mod=economic-report

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5 - https://www.freddiemac.com/pmms

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6 - https://www.attomdata.com/news/market-trends/attom-2023-single-family-rental-market-report/

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7 - https://smartasset.com/data-studies/best-housing-markets-for-growth-and-stability-2023

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8 - https://www.cnbc.com/2023/04/09/the-coming-commercial-real-estate-crash-that-may-never-happen.html

10 - https://therealdeal.com/texas/houston/2023/04/10/arbor-realty-forecloses-on-229-million-multifamily-portfolio-in-houston/?fbclid=IwAR3yZwTh9jylfQsZQp4HjpOLNPqSE_BiXjlQSGWkE6T42lyeTN3WawP1ZMc