Headlines

What’s new in the world of Real Estate

• New listings and pending sales hit a 2023 high

• Rent prices are softening in most U.S. cities

• The Fed may be handing commercial real estate a lifeline

• The percentage of foreign-owned farmland in the U.S. keeps rising

Plus: The cities with the top housing demand, homebuilder sentiment rises, warehouse building is slowing down, and more

Listing of the week: A house where your front yard is…Lambeau Field?

Market Updates

Redfin's Housing Market Report showed new listings, pending sales and price growth hitting 2023 highs. This is not a surprising result after mortgage rates fell in the past few weeks, but it is an encouraging result nonetheless. New listings rose to the highest level since October 2022 and the total supply rose by 3.9%, the highest gain since July 2022. Pending sales rose by 2% in the last month to the highest level in a year, while the median sale price rose by 3.7% year-over-year. With the Fed keeping rates steady and targeting cuts next year, the housing market could finally be re-starting and moving in the right direction.

Rents fell in 55 of the top 100 cities in the country in 2023. This is according to the Annual Rent Report from apartment search site Zumper, which also found that prices were flat in an additional 17 cities. They expect prices to continue softening through the first half of 2024, particularly in Sun Belt cities that boomed during the pandemic. Oversupply in many cities has become a factor, and lowered interest rates might turn some would-be renters into buyers, lowering demand. Some things don’t change though - New York City saw rents rise and is expected to remain the “most expensive and sought after rental market” in the country.

Commercial real estate is seeing an “improved outlook” after the Fed chose not to continue raising interest rates. With over $1 trillion of commercial mortgage debt due to mature in the next two years, rising interest rates pose an existential threat to the commercial real estate market. If rates continue to fall towards where they were pre-2022, property owners will have a better chance to avoid sharp spikes in financing costs. BofA Global now projects that 77% of borrowers will be able to refinance without adding more equity into properties, up from a September projection of 65%. Lower mortgage rates could also help property values rebound and bring more buyers into the market.

A USDA report found that the amount of foreign-owned farmland rose by 8% in 2022. While the 43.4 million acres represents just 3.4% of all the farmland in the country, the rising share owned by foreign investors has caught the attention of legislators. The rate of growth has increased every year since 2017 and some members of Congress wants to limit who exactly can own American farmland, which could have some affect on the market. However, the largest landowner is our friendly neighbor to the north Canada, while China accounts for less than 1% of the total, meaning the national security concerns might be overblown.