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Home My WebLink About04032024 PACAB Nicole Lawrence Housing PresentationPresented 4/3/24 to PACAB Nicole Lawrence of Seward Properties Housing Issues Affecting Eniicwrtin Soi'd Supplement to Presentation to PACAB on 2/2/2022 Presented By. Node Lawenae cif Sev\ard PrgpertieS at Cie-) co a) P. co a) (1) *based off Seward Properties' rentals only Apartments (generally include utilities - very different layouts, size and amenities) Size Monthly Rental Rate 2022 Monthly Rental Rate 2024 1 bed $900 $1,025 +14% 2 bed $1,150 $1,600 +30% 3 bed $1,300 $1,700 +30% 4 bed $1,700 $2,100 +23.5% Houses (utilities are now (in 2024) generally additional and avg extra $300-$750/month depending on size - very different layouts, size and amenities) Size Monthly Rental Rate 2022 Monthly Rental Rate 2024 1 bed $1,100 $1,160 +14.5% 2 bed $1,250 $1,400 +12% 3 bed $1,500 $1,700 +13% 4+ bed $1,800 $2,100 +16% Presented 4/3/24 to PACAB Nicole Lawrence Summary of S • In 2022, rental prices were only around 1 % higher than when we started property management back in 2011. Very little change over 10 years. • On average, in the past two years, rental rates increased 19%. I predicted 20% when I gave this presentation two years ago. • This is because home prices increased so dramatically from 2020 to 2022, thereby increasing mortgages, and if owners hold onto properties with higher mortgages, they tend to charge more in rent to cover those mortgages. • Apartments generally include heat so rent is a little higher to include this utility. • For houses, tenants typically pay the utilities. With the electric utility increase, utilities are a barrier for many renters looking for single family homes and further increases the cost of living. Presented 4/3/24 to PACAB Nicole Lawrence of Seward What Can A Renter Afforcl? It is recommended to spend 30% of your gross monthly income on housing • For a non income subsidized 1 bed apartment at $1025/month including utilities, a renter would need to make -$41,000/year o Income subsidized apartments (like Pacific Park) require that a single applicant make less than 50% of the area median income (AMI) for KPB which is $105,500 (2024). A single applicant could not make more than $36,500, in order to qualify. 2023 Income Limits Link • A non income subsidized 3 bed for a family would require an annual income of approx $68,000. o For a 3 bed income subsidized apartment, a family of four would need to make less than $52,100 to qualify. CHALLENGING FOR FAMILIES! Often cannot qualify for income subsidized. And very few non income subsidized 3 bedrooms apartments available. * When calculatin: necessar income, this is calculated b housin cost/.3 (30%) x 12 months Average financeable home price is around $400,000, currently. 100 75 50 25 0 Seward "Sold" and "Days on Market" Residential Statistics , Days on Market , Number Sold �7r 2018 2019 2020 2021 Year 2022 2023 Presented 4/3/24 to PACAB Nicole Lawrence of Seward Properties *MLS stats • We usually sell on avg 42 homes per year and last year (2023) we only sold 24. • The major lack of inventory was due to many people not wanting to have to move into a home with a higher interest rate. Rates were at -8% in October 2023. • Most homes in good shape and properly priced sell in 7 days or less. What Can A Buyer Afford?. as�f Fy Presented 4/3/24 to PACAB Nicole Lawrence of Seward Properties For a house costing $400,000, with 5% down and 6.5% interest on a 30 year loan... _ ' , insurance $105 $241 $2,402 * When calculating necessary income, this is calculated by monthly housing cost/.3 (30%) x 12 months Utilities Housing Cost $5501month — $3,4001month 3M00 WHO'S BUYING? OWNER OCCUPIED +1' ' of ALL Buyer's vvere 1st time Buyers LONG-TERM RENTAL INVESTMENT SECOND HOME VACATION RENTAL INVESTMENT Based • ff Seward Properties' clients v iio purchased res-den=idI property 2019-present Presented 4/3/24 to PACAB Nicole Lawrence Summary of • Interest rates make a huge difference in what a buyer can afford. • At current interest rates, buyers may be spending more than 30% of their income on housing which leaves less flexible spending. • Buying is less affordable than renting in some cases. • Homes in Seward continue to appreciate in value by around 5% per year. • Homes DO sell for less than $400,000 - that is just the current average. • There is hope! We had a first time home buyer event in 2023 and within six months, five of the attendees owned their first home. Presented 4/3/24 to PACAB Nicole Lawrence r nforLand arket e sin Sew utcide Unafts 20234110,000/acre hi.s.de City fts 20234110,000/lot • These numbers are averages and depend on many variables including location, elevation, ease of utility installs, flood zone, etc. • New Seward Hilltop Properties Sub will open up 77 more parcels for development but this takes time to affect our housing needs, which continue to grow. Total Cost to Build `112,0 An average acre is $1 10 000. Similar prices for .07 acre lot downtown or .3 acre lot near schoo[s. Q1 .fool $.Q,QQip Wells are usually $10.000. ptics are around $12 r0OO. Electric can b $ 5,O O0. It can cost much more depending on elevation. Inside City Ea rn its can be significantly more. F .11 Building costs are $ 50-$3001sq ft. For a 1200 sq ft home it would cost $330,000. 5,000 25% down equired Presented 4/3/24 to PACAB Nicole Lawrence What Has Been Done in Past TW�YE More Houses/Land & Builders City supported utility development to the new Hilltop Properties Subdivision City Enforcement City enforced new rules on primary residential zoning to not allow for NEW nightly lodging permits (R1, R2, RR and UR) - We have seen a change in the marketability of these properties that once allowed for nightly lodging but now do not. More Multi-Plexes Some employers building mutiplexes for their employees which opens up the housing market in Seward for more year-round renters (Major Marine Tours, ZPA LLC, Kayak Adventures Worldwide, etc) Possible Solutions? Presented 4/3/24 to PACAB Nicole Lawrence of Seward Properties - More Houses/Land & Builders - Support making City land available for developing - Fort Raymond, etc - Support expanding utilities to make building more affordable in more areas - Getting developers who can add consistent & quality housing to the market at a rate to keep up witi demand Most of our builders are at capacity and often 6 months to a year out - Home buyer assistance program through the City - Allow for more tiny/small homes on R1 lots - City Enforcement - Don't allow nightly rentals in areas not zoned for it - Incentivize/Enforcing building to happen sooner on lots inside City limits - especially ones sold by the City - Prioritize City lots going to locals instead of out of town folks who don't built - More Multiplexes - Not low income but quality multiplexes with different sized apartments = 3 bed - Rezone R3 to not allow nightly rentals so that multiplexes don't become night lodging - Change parking requirements and/or lot size requirements FSeward Properhes SALES•RENTALS•MANAGEMENT Questions? Preserted By. Node Lanrerm