More businesses are hoping upscale workspaces will lure workers back to the office, hunting for new spaces or looking to upgrade existing ones with amenities and perks such as custom-built lounges, game rooms with ping-pong tables and foosball, outdoor space that includes dining areas with fire pits, upgraded ventilation and sanitation systems, and apps that allow workers to contact building security or order food instantly.

“It’s all about how do we as landlords create an environment that gives their tenants and their employees no excuses not to show up,” Jeff Eckert, the head of JLL’s U.S. office landlord representation business, told The Wall Street Journal.

Amenity-rich headquarters and office spaces are driving a rebound in the sector. Leasings had plummeted early during the pandemic as remote work took root. The office vacancy rate is still at 16.8%, the highest since 2010, according to CBRE.

Now, as companies set up for a return, they are realizing they may need to entice employees to come back to the office.

“The top of the top has just gone crazy,” adds Mary Ann Tighe, chief executive for the New York region of the CBRE Group Inc., a real estate firm.

At 730 Third Ave. in New York, the owners, Nuveen Real Estate, are upgrading the space to woo workers back. The building includes outdoor terraces, a food hall, and a fitness center—and two beehives on a seventh-floor terrace for bees to produce honey for workers to take home for free. A lounge area also offers two full-swing simulators to hit a real golf ball to play virtual golf. They’re also hosting karaoke nights and wine tastings and offering electric scooters.

“It’s about making tenants comfortable,” Brian Wallick, director of New York investments, office and life science for Nuveen, told the Commercial Observer. “Certainly with what’s gone on in the last one to two years, you need to have amenities in your building that excite people who are coming back to the office.”

The law firm Venable LLP recently signed a New York City lease for five floors to upgrade its space to win back its employees. Its new space in New York will include a private balcony with a view of the Empire State Building and a cafeteria with a menu overseen by star chef Charlie Palmer.

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Real estate investors are buying up homes, and first-time buyers increasingly are finding themselves up against them in bidding wars.

Investors are drawn to real estate to flip single-family homes, townhomes, and condos for a profit and to build their portfolio of properties to convert them to rental units.

The share of investors is at the highest level since 2015, according to realtor.com®’s data. They’re most notably targeting the Midwest and Sun Belt, where rental prices are climbing but home prices still remain relatively affordable compared with some other regions of the U.S., realtor.com® says.

“Investors are particularly attracted to affordably priced homes, the very homes that would normally be appealing to first-time buyers,” says George Ratiu, realtor.com®’s manager of economic research. “Investors who generally come with cash have a significant advantage over first-timers who typically rely on a mortgage. In a market with few homes for sale already, this prices out many buyers.”

Realtor.com®’s research team identified where investors are purchasing the highest share of homes by evaluating thousands of deed records in the nation’s 50 largest metro areas. They looked at single-family homes, condos, and townhomes that were purchased by investor entities. Individual investors—mom and pops purchasing a unit to rent—were not included in the analysis. For geographic diversity, the team also limited its list to one metro per state.

The following areas are where investors are purchasing the highest share of homes, according to realtor.com®.

Memphis, Tenn.

• Share of investor buyers in July: 17%
• Median list price in September: $249,000
• Median rent in September: $1,217

Birmingham, Ala.

• Share of investor buyers: 16%
• Median list price: $271,000
• Median rent: $1,115

St. Louis

• Share of investor buyers: 14%
• Median list price: $250,000
• Median rent: $1,150

Charlotte, N.C.

• Share of investor buyers: 13%
• Median list price: $390,000
• Median rent: $1,543

Jacksonville, Fla.

• Share of investor buyers: 13%
• Median list price: $370,000
• Median rent: $1,446

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A record number of home builders are reporting a shortage of workers such as carpenters, painters, and electricians, the National Association of Home Builders reports. The shortages come at a time when demand is increasing for new homes. Builders are struggling to meet demand and faced with both surging prices for materials and shortages of lots.

The share of builders reporting a shortage of labor reached a record high of 76% in October, well above the previous peak of 67% that was set at the end of the 1990s, the NAHB reports. The latest percentage is also much higher than the 45% reached during the housing boom in the mid-2000s when the industry needed to find enough labor to build 2 million homes a year to meet demand, the NAHB reports.

More than 55% of single-family builders reported a shortage for each of 16 trades crucial in building a home. More than 80% of builders reported a shortage of labor for carpenters (rough, finished, and framing crews), the survey shows.

At a time when home improvement demand is surging, remodelers also are reporting extreme labor shortages. More than 55% of remodelers reported a shortage in all the same 16 trades.

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Single-family housing starts dropped in October as supply chain woes over construction materials and labor shortages continued to hamper the building industry. Single-family housing starts fell nearly 4% last month to a seasonally adjusted annual rate of 1.04 million, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported Wednesday.

Still, single-family housing starts are faring better in the long run, up 16.7% year-to-date.

“The rising count of homes permitted but that have not yet started construction is a stark reminder to policymakers to fix the supply chain so that builders can access a steady source of lumber and other building materials to keep projects moving forward,” says Chuck Fowke, chairman of the National Association of Home Builders.

Builders blame supply chain effects as the reason 152,000 single-family homes that have been authorized but have not yet started, up 43.4% from a year ago.A record number of home builders are reporting a shortage of workers, including carpenters, painters, electricians, and other trades.

“Single-family permit data has been roughly flat on a seasonally adjusted basis since June due to higher development and construction costs,” says Robert Dietz, the NAHB’s chief economist. “Demand remains solid but housing affordability is likely to decline in 2022 with rising interest rates.”

Overall housing starts, which include both single-family homes and multifamily construction, decreased 0.7% in October to a seasonally adjusted annual rate of 1.52 million units. The multifamily sector, which includes apartment buildings and condos, rose 7.1% in October, reaching an annualized pace of 481,000 units.

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Investors are seeing early benefits to their opportunity zone investments: Median single-family and condo prices are increasing in the majority of nationwide opportunity zones—by 62%, according to a third-quarter report released by ATTOM Data Solutions. Prices increased by at least 20% annually in nearly half of the zones.

Opportunity zones, established by Congress in the Tax Cuts and Jobs Act of 2017, were created to help revitalize low-income areas, offering investors significant tax breaks over several years to those who do so. More than 8,700 communities across the country have been designated as available for revitalization using opportunity zones.

ATTOM Data Solutions identified 10 opportunity zones that nearly doubled in year-over-year increases in median home prices and saw prices increase above the national median of $310,500. They are:

1. Hennepin County, Minn. (270530095000): up from $169,971 in Q3 2020 to $337,225 in Q3 2021
2. Galveston County, Texas (48167724101): up from $315,000 in Q3 2020 to $621,323 in Q3 2021
3. Miami-Dade County, Fla. (12086002201): up from $414,000 in Q3 2020 to $815,000 in Q3 2021
4. Whatcom County, Wash. (53073001000): up from $283,500 in Q3 2020 to $557,000 in Q3 2021
5. Contra Costa County, Calif. (06013337200): up from $383,500 in Q3 2020 to $741,000 in Q3 2021
6. Adams County, Colo. (08001015000): up from $222,500 in Q3 2020 to $429,900 in Q3 2021
7. Belknap County, N.H. (33001966000): up from $209,500 in Q3 2020 to $400,000 in Q3 2021
8. San Diego County, Calif. (06073003404): up from $335,000 in Q3 2020 to $639,500 in Q3 2021
9. Sarasota County, Fla. (12115000200): up from $215,000 in Q3 2020 to $410,000 in Q3 2021
10. Hillsborough County, Fla. (12057004200): up from $294,500 in Q3 2020 to $560,000 in Q3 2021

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With surging home prices, more home buyers are showing an interest in manufactured housing. Even buyers who aren’t specifically looking for manufactured homes may discover that some listings they are interested in feature them, since they more closely resemble site-built homes nowadays.

The manufactured housing segment has long contended with a reputation of being poorly made or cheap. Companies say the latest designs are modern and often energy-efficient and are built to withstand even the most severe weather.

Manufactured homes are built in a factory and then assembled onsite. This allows homes to be built faster and cheaper.

Some builders and developers hope that home buyers who may be locked out of homeownership may consider manufactured housing as an option. Also, lenders and developers are showing more interest in manufactured housing, believing it could help with housing inventory and affordability challenges.

“We have a lot of teachers, first-time home buyers, and folks downsizing after retirement,” Dustin Arp, managing partner of Spark Homes LLC, which has developed manufactured home communities, told The Wall Street Journal. “Maybe they used to qualify for site-built housing but no longer do.”

A new single-family built on site sold for about $392,000, on average, in 2020; subtracting the cost of the land, the house itself cost about $309,000, The Wall Street Journal reports, citing government data. For comparison, new manufactured homes cost $87,000, excluding the land.

More than 100,000 new manufactured homes are to be built this year, the highest amount since 2006, according to U.S. Census Bureau data.

But the sector may still need to convince buyers about manufactured housing as a cost-effective alternative. The homes are often sold by dealerships. They may offer limited financing options. “In those cases, a person might buy a manufactured house as a piece of personal property, like a car, rather than getting a mortgage that tethers the house to underlying land,” according to The Wall Street Journal.

Further, about 42% of manufactured homes are purchased with loans secured by the home. Those purchases do not include the plot of land, according to the Consumer Financial Protection Bureau. The loans could come with higher interest rates, and owners may be at greater risk of losing their homes if they don’t own the land as well, The Journal says.

Recently, Fannie Mae and Freddie Mac have adopted new programs to make it easier for lenders to extend conventional mortgages on certain manufactured homes, including those that have features like porches or garages built on site.

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Reprinted with permission