March 19th, 2024 - This Week in Real Estate

This issue is brought to you by Energy Shares, where you can tap into the rapidly growing solar market.


What’s new in the world of Real Estate
  • A landmark realtor commission settlement

  • How will it affect the market?

  • Vacancies are up across commercial real estate sectors

  • Almost half of homes are facing climate risks

Plus: The Fed meeting, Blackstone is bullish on real estate, Zillow’s 2024 forecast, and more.

Listing of the week: A 10 acre cemetery in Seattle.


Freddie Mac 30 Year Fixed
6.74% (-0.14% weekly)
Dow Jones Real Estate Index
339.71 (-2.4% weekly)
327.48 (-2.3% weekly)
Zillow Home Value Index
$349,216 (+1.5% monthly)


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Market Updates

The National Association of Realtors (NAR) reached a nationwide settlement over agents’ commissions. After NAR lost a landmark $1.8 billion jury verdict in an antitrust lawsuit last year, it was only a matter of time before there were changes to the current commission system. Before this settlement, in which NAR agreed to pay $418 million over four years, the standard commission for a house sale was 5%-6%, usually split between the seller’s agent and buyer’s agent. The commissions were often a requirement in order to use a multiple listing service (MLS), most of which were controlled by NAR, which critics allege led to anticompetitive behavior. Additionally, the system of a seller paying the buyer’s agent led to conflicts of interest, where an agent is more incentivized to close a deal than get the best price for their client. Assuming a federal court approves the settlement, changes to these long-standing rules are going to alter the way Americans buy and sell houses, which will in turn transform the market.

Most are expecting these changes to lead to lower housing costs. Commissions are projected to fall by 25-50% as brokers can now advertise their rates to both buyers and sellers, leading to more competition. They can also offer a flat fee instead of a percentage, and buyers will be able to shop around. With frictional costs lowered, housing prices are likely to fall, though sellers will keep more of the proceeds, and buyers may have to pay for their brokers out of their own pockets, or forgo having representation at all. This could be especially difficult for first-time buyers, and particularly in markets that already struggle with affordability. There is likely going to be a long transitory period as everyone adjusts to the new rules. However, some are predicting that not much will end up changing, particularly in the higher-end market, where many commissions were already negotiated.

Office space continues to struggle (NAR)

The office vacancy rate continues to climb. It reached 13.6% during Q1, which represented the sixth straight quarter of rising vacancies. Overall, there is twice as much unoccupied office space as there was a year ago. Retail properties are also seeing negative net absorption rates (the difference between new leases and new vacancies), but a lack of new construction has kept the vacancy rate low. Industrial real estate is still seeing positive net absorption rates, but they are 70% lower compared to a year ago, as new construction is catching up to demand. Finally, hotel occupancy stayed steady, but remains below pre-pandemic levels.

Nearly $22 trillion of residential real estate is facing climate change risk. In all, reports 44.8% of all homes are “at risk of severe or extreme damage from environmental threats.” As the effects of climate change worsen, this will have an impact on insurance costs, which in turn affects housing prices and the housing market as a whole. The biggest danger is rising temperatures, with 32.5% of homes facing extreme heat exposure, followed by wind damage (18% of homes), flooding (6.6%) and wildfires (5.5%), with many markets facing multiple risks. Investors, especially those with a long-term outlook, would be wise to start considering these risks when deciding where to buy property.

Listing of the Week

A property that caught our eye

The price for these 10 acres of prime Seattle real estate? $1.5 million, but you have to have a license (and desire) to operate a cemetery, whose owners are selling due to a seven-figure debt. The Crown Hill cemetery is over 120 years old and there are apparently many opportunities for revenue growth, as long as you aren’t afraid of ghosts.


  • The Federal Reserve will announce a decision on an interest rate cut on Wednesday afternoon, with most experts expecting them to keep rates steady and likely push back any cut until at least June, as the real estate market patiently waits for mortgage rates to drop.

  • The president of Blackstone, the largest alternative asset manager in the world, told Bloomberg that real estate prices have bottomed, creating opportunities to acquire assets at a discount.

  • Zillow has revised their forecast for 2024 home value growth down to 0.9% from 4%, primarily as a result of the recent increase in new listings for sale.

  • The growth in farmland investing by institutions is threatening to price out smaller farmers from the market, though they still only make up a small percentage of farmland purchases.

  • The total supply of homes for sale hit the highest level in a year, according to Redfin, but home prices are still up 6.6% year-over-year.

  • While the office sector has been struggling, only 3.5% of sales last year were from a distressed seller, meaning that prices could continue to fall if more distressed properties are forced onto the market.

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New listings are up, but still well down from where they were two years ago (Redfin)

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