- Vincent - Real Estate Report
- November 21st, 2023 - This Week in Real Estate
November 21st, 2023 - This Week in Real Estate
What’s new in the world of Real Estate
Investment funds continue to purchase U.S. farmland
Existing-home sales dropped in October, but pending home sales rose slightly
Homebuilder sentiment fell to the lowest point in a year
Millennial and Gen-Z buyers are becoming more interested in “house-hacking”
Plus: Home values are falling slightly and rents are rising in Berlin.
Listing of the week: A furnished train car in Montana.
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Research and Insights from the Vincent team
The seven largest farmland investment firms now own 1.65 million acres in the U.S. This represents an increase of 231% since 2008, while the value of the holdings has risen 800% in that time, according to the NCREIF’s quarterly report. The U.S. government is taking steps to potentially restrict investment fund purchases and ability to use USDA farm programs. As more private investors enter the market, it has pushed up the price of land, which is already rising as demand for food grows and the amount of viable farmland decreases due to climate change.
Total existing-home sales dropped 4.1% monthly and 14.6% year over year in October. The report from National Association of Realtors showed the lowest level of sales in 13 years, with decreases most pronounced in the Northeast and the South. The report did find that total inventory rose by 1.8% in October, which coupled with slightly lower mortgage rates could lead to a bump in sales this month. Indeed, a Redfin report showed that pending home sales rose 1% in October, adjusted for season, though buyers backed out of deals at the highest rate on record.
Homebuilder sentiment fell again in October for the fourth straight month. The National Association of Home Builders/Wells Fargo Housing Market Index fell six points to 34, the lowest it’s been since last December. The index had been in positive territory (above 50) in July, but has fallen 22 points since then due largely to rising interest rates. However, they did note that since the data for October was compiled, some more recent macroeconomic indicators show that conditions are improving, making it seem likely the index will rise next month.
“House-hacking” has become more attractive to younger potential homebuyers. A Zillow report found the practice, in which a buyer rents out part of a home or units in a multifamily building they live in, has gained momentum as younger buyers are increasingly priced out of traditional home ownership. Over 50% of Gen Z and Millennials say that the opportunity to house-hack is “very” or “extremely” important to them, while just 4% of those 59 or older say the same. House-hacking, when done correctly, can make home ownership more attainable and more financially responsible, making it an option that everyone should consider.
Listing of the Week
A property that caught our eye
This nearly 100-year old 3-compartment Pullman train car (TCRY 106) is now a 900 square foot residence with 3 bedrooms, 3 bathrooms, a kitchen, living room, dining room and office. It was built in 1925, complete renovated in 1998 and has a western-themed decor. Located in Bonner, MT (just outside Missoula), the asking price is just $249,000 and seems destined to become an AirBNB.
More stories worth checking out
Zillow’s Home Value Index fell 0.3% in October, but is still up 2.3% year-over-year.
High interest rates have affected the real estate market across the globe - this is a good roundup of the effects in Canada, New Zealand and Australia.
Despite strict anti-gentrification laws and rental regulations, rents are rapidly increasing in Berlin, Germany, which could impact policies in American cities as leaders look to keep housing affordable.
Blackstone is reportedly the top bidder for the failed bank Signature’s $17 billion commercial property loan portfolio - what it ends up paying will be a good marker of how far the market has fallen.
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