- Vincent - Real Estate Report
- December 19th, 2023 - This Week in Real Estate
December 19th, 2023 - This Week in Real Estate
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?
Freddie Mac 30 Year Fixed
Dow Jones Real Estate Index
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Research and Insights from the Vincent team
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.
Listing of the Week
A property that caught our eye
If you’re a Green Bay Packers fan, the location of this property can’t be much better - literally right next to legendary Lambeau Field. Given the unusual location of the Packers’ franchise in relatively small Green Bay, Wisconsin, it’s hard to believe any house in the country is closer to an NFL stadium. The 4 bed, 2 bath, 2,112 square-foot house also has a hot tub and in-ground pool and is asking $699,900.
More stories worth checking out
Austin and Dallas lead the NAR’s list of the top 10 housing markets with the most pent-up demand for housing, projecting strong performances there in 2024.
Homebuilder sentiment rose for the first time in five months as mortgage rates fell, but the index is still in negative territory overall.
After years of catching up to pent-up demand for warehouses, industrial property construction starts dropped 48% in the first nine months of 2023, a result of higher costs of capital, and slowing leasing demand.
China’s real estate downturn could have profound effects on its burgeoning middle class, as housing prices have fallen by as much as 15% already and 70% of family assets are tied up in real estate — investors everywhere should aim for greater diversification.
Blackstone led a joint venture paying $1.2 billion to acquire 20% of the failed Signature Bank’s $16.8 billion commercial real estate loan pool from the FDIC, a strong bet on the mostly-New York City based portfolio.
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