The Real Economy Blog

Troy Merkel, Partner, Real Estate Senior Analyst

@troymerkel

Troy Merkel is a Partner and Real Estate Senior Analyst at RSM. He has 15 years of experience in audit and consulting, with a particular emphasis in real estate and financial services reporting, in accordance with US GAAP, IFRS, NCREIF PREA Reporting Standards and income tax basis. He is also an expert in accounting for asset acquisitions and complex leases and specializes in various tax-advantageous, in particular Opportunity Zones and government subsidized deal structures.

In 2018, Troy was selected as a senior analyst in RSM’s cutting edge Industry Eminence Program, which positions its senior analysts to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. These senior analysts advise clients on conditions impacting middle market leaders. Troy’s focus is on the real estate industry.

Is the next mortgage bubble imminent? Not so fast, the debt data tells us

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Residential mortgages totaled $9.4 trillion as of June 30 and overall consumer debt reached an all-time high of $13.86 trillion, according to the Federal Reserve Bank of New York. Residential mortgage debt eclipsed the 2008 peak of $9.29 trillion, fueling the belief among some market watchers that a housing crash apocalypse they’ve been counting on since the ... READ MORE >

Low treasury rate is a boost for home builders, neutral for commercial real estate

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Bonds have been declining in recent weeks following a 25-basis-point rate cut from the Federal Reserve and expectations of further cuts amid rising concerns over an impending recession.  Recession concerns were underscored Wednesday by the inversion of the U.S. and U.K. two- and 10-year yield curves and the fall of 30-year Treasury yields to 2.07%, a record ... READ MORE >

Homebuilder confidence indicators rise but still lag 2018

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The homebuilder confidence index rose to 65 in July, according to the National Association of Homebuilders, as a dovish Federal Reserve is expected to reduce interest rates later this month and potentially two more times by the end of 2019. But while confidence has increased, homebuilders are still facing headwinds related to land, labor and tariffs, all of ... READ MORE >

Cautious builders continue to mute housing supply

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Key government housing metrics continue to show year-over-year declines. Housing starts fell 11.2% in May, according to the Commerce Department, while permits declined 3.8%. These numbers strongly imply there will be a fall back toward 1.22 million housing completions on an annualized basis in the coming months. Ultimately the housing shortage is not ... READ MORE >

Homebuilder confidence supported by rise in housing starts

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There is good news for the U.S. housing market that saw a rough end to 2018. Domestic housing starts rose 5.7 percent to 1.235 million in April, while permits grew at a more modest 0.5 percent to 1.296 million. The growth was primarily driven in the Northeast and Midwest—drying out after a wet and soggy start to the 2019 building season—with month-over-month ... READ MORE >

Key construction index shows improvement, but builder cost hurdles remain

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The National Association of Homebuilders’ Housing Market Index rose 3 points to 66 in May—a seven month high—helped by lower mortgage rates and improved sales of new homes. The increase added momentum to this year’s upward trend following a low at the end of 2018. A reading above 50 indicates more builders see conditions as good than poor. While stable ... READ MORE >

Government offers further clarity in opportunity zone regulations

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The U.S. Department of the Treasury released its latest set of regulatory guidelines on opportunity zones on Wednesday, offering significantly more clarity about the program, which provides tax incentives to developers entering geographic areas slated for improvement. Real estate investors appear to be getting everything they want from the program. The ... READ MORE >

Low interest rates alone can’t save the housing market

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The government reported on Tuesday that December housing starts fell 11.2 percent—their lowest level in two years. Despite this, many remain hopeful of a bounce back by spring. We believe that optimism should be kept in check, as high home prices remain a drag on the market. The Commerce Department said new starts in the month slid to a seasonally ... READ MORE >

Demographics, policy to drive 2019 real estate investment

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Fundamentals in the real estate market continue to be strong; however, at this late stage in the business cycle, investors need to be cautious as they venture into the development of more third-tier markets. Changes in demographics will also influence real estate as more people opt to rent, e-commerce grows and the density of offices’ increases amid an ... READ MORE >