April 23rd, 2024 - This Week in Real Estate

Brought to you by RYSE - invest in a company redefining smart living


What’s new in the world of Real Estate
  • Luxury real estate hits an all-time high

  • Multifamily metrics are improving

  • Farmland keeps its streak going

  • Reversing the doom loop

  • Mortgage rates keep rising

Plus: Commercial foreclosures are up, eco-friendly cities, build-to-rent construction booms, and more.

Listing of the week: A desert glamping compound owned by the singer of the B-52s.

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Freddie Mac 30 Year Fixed
7.10% (+.22% weekly)
Dow Jones Real Estate Index
320.66 (+1.4% weekly)
313.70 (+1.7% weekly)
Zillow Observed Rent Index
$1,983 (+0.6% monthly)


Take a Peek Behind the (Smart) Curtain

Best Buy has a proven record of placing early bets on home-technology products that go on to dominate the market. For example: 

Ring - acquired by Amazon for $1.2B

Nest - acquired by Google for $3.2B 

Pay attention, because Best Buy just unveiled a new smart-home product in over 100 stores that has potential for massive returns – RYSE Smart Shades

RYSE is poised to dominate the smart shades market (currently growing at 50% annually) and they’ve just opened a public offering of shares priced at just $1.50/share. Current shareholders have already seen their value increase 20% year-over-year, with strong upside remaining as they scale into retail. 

If you missed out on Ring and Nest, this is your chance to secure your stake in the smart home market. 

Market Updates

Luxury home prices rose nearly twice as fast as non-luxury home prices in Q1. A report from Redfin, which defines “luxury homes” as those in the top 5% of market value in a metro area, showed the median luxury home price in the U.S. to be $1.225 million, an all-time record. Prices rose by 8.7% year-over-year in Q1, compared to a 4.6% gain for all other homes. Sales of luxury homes rose by 2.1% year over year, while sales of all other homes fell by 4.2%. This data shows that the luxury market behaves somewhat independently from the rest of the market, due to the prevalence of all-cash buyers who are insulated from rising mortgage rates, and the steady demand for high-end houses.

Metrics for multifamily properties improved for the first time since early 2022. This is according to a report from commercial real estate giant CBRE, which showed that targets for going-in cap rates, exit cap rates and unlevered internal rate of return (IRR) improved slightly in Q1. Going-in cap rates, meaning the cap rate upon purchase, improved from 5.06% to 5.00%, while exit cap rates, meaning the cap rate upon sale, improved from 5.18% to 5.12%. Because price is inversely correlated with cap rate, a lower target cap rate is preferable as it means buyers are willing to pay higher prices. Finally, the target unlevered IRR improved from 7.68% to 7.59%, meaning investors are targeting a lower rate of return when underwriting properties. While the improvements are marginal, it is a sign that the market is heading in the right direction, although this data is from before interest rates rose again.

Midwestern farmland prices rose for the 53rd straight month. The Rural Mainstreet farmland price index went from 56.0 to 56.5, showing continued growth even as there was overall pessimism about the economy. High interest rates, weak commodity prices and higher grain storage costs pushed the overall index, which measures bankers’ attitudes about economic growth, to its lowest level since June 2020. However, even with difficult conditions, farm loan delinquencies remain low, and with inflation continuing to persist, the outlook for the value of farmland remains strong.

Detroit’s resurgence is giving hope to other cities facing the “doom loop.” The “doom loop” is the idea that population decline leads to a decline in services which leads to further population decline and so on. Detroit has been a prime example of a doom loop in the past decade, as its residential and commercial populations fell, but a recent turnaround has laid a blueprint for other cities that have struggled in the post-pandemic landscape. By investing in a mix of residential, retail and high-end office developments, the formerly struggling downtown is recovering. Property values are up 40% since 2020 and the number of apartments downtown has doubled since 2010. What Detroit is showing is that by starting the process of development, it can reverse the “doom-loop” cycle, by bringing back people and businesses, which improves the tax base and city services, which in turn attracts people and businesses, and so on.

Listing of the Week

A property that caught our eye


Located near Joshua Tree in California’s Mojave Desert, Kate’s Lazy Desert, is a 5-acre glamping compound designed and owned by Kate Pierson, singer of the B-52s, and her wife, artist Monica Nation. The property includes six Airstream trailers that are decorated with bright colors and psychedelic designs, a 400-square foot cabin for on-site management and a storage shed. Listed for $452,000, it also comes with the neighboring, undeveloped 5-acre property.


(Mortgage News Daily)

  • Mortgage rates go higher: Spurred on by concerns that higher-than-expected inflation rates in March will delay interest rate cuts by the Federal Reserve, the average 30-year fixed mortgage rate hit 7.5% this week compared to 6.75% this time last year.

  • Commercial real estate foreclosures are way up: The struggling sector’s woes continue, as March saw 625 foreclosures, which represents a 117% increase from last year - California, in particular, saw a 405% rise.

  • Green listings: California led the way in Realtor.com’s list of the cities with the most eco-friendly listings, taking six of the top ten spots, including #1 Yuba City and #2 Vallejo.

  • Big Tech is cutting back: Companies like Google, Meta, Amazon, and Salesforce are reducing their office footprint, in another setback for the struggling sector, particularly in cities like Seattle and San Francisco.

  • Home sales fall: Existing-home sales dropped by 4.3% in March and are now down nearly 4% year-over-year, while the median sale price is up 4.8% year-over-year.

  • CRE and proptech: Major commercial real estate firms such as Marcus & Millichap, JLL and Colliers are investing big into proptech startups in part to improve their own operations.

  • Build-to-rent at an all-time high: There were 27,500 houses built in 2023 specifically to rent, a 75% increase over 2022’s number, reflecting a changing market where younger people want to live in houses, but can’t afford them.

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