3 Things: Jerome Powell’s Stance on Interest Rates and Inflation, Dallas Surges as Top Pick for Relocation, Jara Capital Mid-Year Letter
3 Things: Jerome Powell’s Stance on Interest Rates and Inflation, Dallas Surges as Top Pick for Relocation, Jara Capital Mid-Year Letter
"It is not the strongest or the most intelligent who will survive but those who can best manage change." - Charles Darwin
AUGUST EDITION
01 Charting the Course: Jerome Powell’s Stance on Interest Rates and Inflation
At a recent economic policy symposium, Jerome Powell, Chair of the Federal Reserve, reaffirmed the Fed & resolute commitment to a deliberate course of raising interest rates. This
measured approach is driven by their steadfast determination to maintain a highly restrictive
policy stance until they ascertain, with confidence, that inflation is undergoing a sustained
trajectory towards the targeted rate of 2%. Examining the latest inflation data, it becomes
evident that over the course of a 12-month period, the United States has witnessed notable
fluctuations. Specifically, the “headline” PCE (personal consumption expenditures) inflation
surged to its peak at 7 percent in June 2022, yet by July 2023, it had receded to 3.3 percent.
Similarly, when considering Core PCE inflation on the same 12-month timeline, the pinnacle
was reached in February 2022 at 5.4 percent, gradually receding to 4.3 percent in July.
Our takeaway:
The landscape of stringent economic policies and ascending interest rates remains an ongoing
reality. Although recent inflation data signals a favorable trajectory of diminishing inflation rates,
the recent statements from Jerome Powell underscore that the Federal Reserve remains
cautious about deeming this decline as durably sustainable. This implies a probable trajectory of
further increases in interest rates extending into the year 2024 and potentially extending through
2025.
Real estate investors can anticipate prolonged sluggishness in the multifamily market due to elevated interest rates and stringent lending practices. High-volume transactions are likely to remain subdued into the following year. Investors should assess their financial robustness, study local markets for opportunities in properties with overleveraged positions, and consider potential investment partnerships. Passive investors should focus on bolstering capital, reevaluating long-term goals, and identifying suitable investment allies.
Real estate investors can anticipate prolonged sluggishness in the multifamily market due to elevated interest rates and stringent lending practices. High-volume transactions are likely to remain subdued into the following year. Investors should assess their financial robustness, study local markets for opportunities in properties with overleveraged positions, and consider potential investment partnerships. Passive investors should focus on bolstering capital, reevaluating long-term goals, and identifying suitable investment allies.
02 Charting the Shift:
Dallas Surges as Top Pick for Relocation
The most recent migration data for Dallas reveals a persistent pattern of favorable net inflows
from metropolitan regions characterized by higher living costs. According to Redfin, noteworthy
outbound migration from Los Angeles and San Francisco emerges as Dallas, Texas garners
attention as the top destination for relocating individuals.
Our takeaway:
The allure of Dallas, TX and its adjoining metropolitan region as a relocation hub remains
resolute. This attraction can be attributed to a combination of factors, notably its relatively
moderate cost of living juxtaposed with compelling employment prospects. These foundational
strengths are poised to endure, enhancing Dallas’s growth trajectory in the foreseeable future.
For real estate investors, a comprehensive comprehension of the markets in which investments are undertaken stands as an imperative pillar of success. Scrutinizing variables such as population expansion, employment rates, and geographical desirability is pivotal in determining the submarkets with optimal investment potential. The Dallas-Fort Worth Metro area continues to exhibit robust fundamentals and a sustained positive momentum, amplifying its appeal as a fertile ground for enduring real estate investments.
For real estate investors, a comprehensive comprehension of the markets in which investments are undertaken stands as an imperative pillar of success. Scrutinizing variables such as population expansion, employment rates, and geographical desirability is pivotal in determining the submarkets with optimal investment potential. The Dallas-Fort Worth Metro area continues to exhibit robust fundamentals and a sustained positive momentum, amplifying its appeal as a fertile ground for enduring real estate investments.
03 Jara Capital Mid-Year Letter
We invite you to explore our recently published 2023 Mid-Year Letter. This comprehensive
report, unveiled earlier this month, offers a detailed overview of the prevailing economic
landscape, highlights Jara Capital’s strategic pivot, and offers insights into our forthcoming
ambitious ventures.
Central to our ethos is an unwavering dedication to transparency across all stakeholders.Our unrelenting mission is to empower the individual investor, fostering wealth creation and facilitating access to the advantages of real estate through collaborative participation in direct multi-family apartment investments.
Central to our ethos is an unwavering dedication to transparency across all stakeholders.Our unrelenting mission is to empower the individual investor, fostering wealth creation and facilitating access to the advantages of real estate through collaborative participation in direct multi-family apartment investments.
Ready to invest?
As you evaluate your 2023 strategic investment plans, Real Estate is and will always be a solid asset class for investment. Jara Capital is well positioned to help anyone looking to invest some capital in the multifamily real estate sector.
Regards,
Caleb & Toyyib
Co-founders & Managing Partners
Jara Capital Partners “Delivering Extra”
