As with existing commercial real estate assets, assets in a pre-construction or construction phase require valuation for capital raising purposes, whether funds are to be borrowed or raised via equity investors. Unlike existing assets, however, construction projects lack financial history to demonstrate value—there’s no rent roll, leases, or income statements for an appraiser to review. How, then, do commercial valuation consultants place a value on a construction project?
Hear from the SFR/BFR industry’s leading experts during the Pieces of the Puzzle: What the Fed’s Rate Hike Means for the SFR/BFR Market webinar as they take a deep dive into how the Federal Reserve’s rate increases have affected the housing market. During this discussion, the panel of experts will discuss trends for home prices and economic growth, cap rate predictions, effects of higher deficit spending and higher long-term interest rates, and views on a future recession. Register today for this month’s Pieces of the Puzzle webinar, featuring SVN | SFRhub Advisors, John Burns Research and Consulting, Encore Finance and Pintar Investment Company.
America is in the middle of a housing crisis. There are only 1.08 million existing homes on the market, and the affordability of a single-family home is at its lowest level in several decades. One bid to close the estimated 3.8 million unit deficit in housing is by building new, single-family homes — but some are not for sale, they’re for rent.
This relatively new and growing segment of the housing market is called “build for rent” or BFR (or “build to rent” or BTR). Often constructed in suburban areas with low crime and near good schools, BFR homes attract those who want the lifestyle of a house — but the affordability or convenience of renting.
With an average rent of a BFR home at $2,039 a month, BFR properties are located mainly in the Sun Belt, including Texas, California, Arizona, Florida, North Carolina and Georgia, according to data from the National Rental Home Council and Yardi Matrix.
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Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again?
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Though summer temperatures have been scorching hot across many parts of the country, housing market activity remains tepid.
The national average 30-year fixed mortgage rate ended in July where it started before edging near 7% the first week of August. A basis point is one-hundredth of one percentage point.
Meanwhile, existing monthly home sales dropped 3.3%, with all four major U.S. regions posting year-over-year sales declines, according to the National Association of Realtors (NAR).
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Built-for-rent housing may be the next big thing in multifamily living. It provides tenants more privacy than an apartment complex, with similar ease of care for landlords.
The housing market continues to be incredibly tight for home buyers, with just 2.7 months of available housing supply for sale as of November 2022, but it’s also not been a picnic for renters, who are fighting for units in an increasingly tightening (and expensive) market. Real estate investors have come up with a sort of middle ground solution to both of these issues: built-for-rent (BFR) housing. BFR has been getting a lot of attention lately, and for good reason.
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