May 14th 2024 - This Week in Real Estate

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What’s new in the world of Real Estate
  • Private credit expanding into real estate

  • Underwater mortgages on the rise

  • Rents continue to tick up

  • Global investors cutting RE exposure

Plus: April’s hottest markets, luxury market trends, rising commercial delinquencies, and more.

Listing of the week: Muhammad Ali’s L.A. mansion.


Freddie Mac 30 Year Fixed
7.09% (-.13% weekly)
Dow Jones Real Estate Index
327.92 (+3.4% weekly)
319.98 (+3.2% weekly)
Zillow Observed Rent Index
$1,997 (+0.6% monthly)


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Market Updates

Symbolic house made from one hundred dollars isolated on white background

Major investment firms are increasing their exposure to real estate debt. As the struggling commercial real estate market has pushed traditional banks away from lending to buyers and developers, private lenders are stepping in to fill the gaps. Firms like PGIM, Brookfield, Apollo Global Management and many others are betting that the market has hit bottom and that loans originated now will see attractive returns. Many are still avoiding the struggling office sector, focusing on loans to industrial and multifamily properties. Goldman Sachs also just raised $3.6 billion for its latest real estate credit fund, in another bullish sign for the market.

The number of mortgages that are “seriously underwater” rose slightly in Q1. A new report from ATTOM found that 2.7% of all mortgages have balances at least 25% higher than the market value of the property securing it, a slight increase from 2.6% last quarter, but still down significantly from 2020, when it hit 6.6%. The biggest increases were in Southern states like Kentucky and West Virginia, and Louisiana has the highest total proportion (11.3%) of “seriously underwater” mortgages. On the flipside, the Northeast and West have the highest levels of “equity-rich” homeowners, where the mortgage is less than 50% of the property’s market value.

While wage growth outpaced rent growth overall, that was not the case in New York City

Renters now need to make almost $80,000 to afford the typical U.S. rental. Zillow’s rent report showed a 0.6% gain month-to-month as the average U.S. rent hit $1,997. In order to afford the average rental by spending no more than 30% of their income, a renter would need to make $79,889 a year, significantly more than the $58,692 figure just five years ago. Since 2019, rent growth has largely outpaced wage growth, with rents growing 1.5x faster than wages on average. However, last year saw a 4.3% increase in wages and a 3.4% increase in rents nationwide, a step in the right direction for renters.

Real estate allocations by fund managers are at a 15-year low. Bank of America’s latest global survey found that money managers are moving away from the sector and into stocks, bonds and cash. The change in sentiment is largely due to the interest rate environment, with lower rates needed for the real estate market to improve. Overall, those surveyed are also at their most bullish since late 2021, with 64% saying they do not expect a recession in the next twelve months. This indicates that managers are not down on the economy overall, but specifically are pulling back from real estate.

Listing of the Week

A property that caught our eye

(Concierge Auctions)

The Los Angeles mansion where legendary boxer Muhammad Ali lived from 1979-1986 is up for auction with a listed price of $13.5 million and a current bid of $7.75 million. The 7-bed, 8-bath, 10,500 square foot main house sits on a 1.5 acre lot which also features a one-bedroom guest house, a five-car garage, a swimming pool and terrace. The auction ends at 7 PM ET on May 15, so get your bids in if you want to live in a space once occupied by “The Greatest.”



  • The Northeast stays hot: The top four and seven of the top ten on’s list of the hottest markets are in the Northeast, as affordable markets close to large metro areas led the way.

  • Vacation home financing falls: The number of mortgages taken out for second home purchases declined by 40% in 2023 and is down 65% since 2021, as high prices, high interest rates and falling short-term rental revenue has led to less demand for vacation homes.

  • Luxury market trends: This article takes a look at what is shaping the luxury real estate market in 2024, including eco-friendly designs and sustainability, a move away from urban centers, and making purchases with cryptocurrency.

  • Rising CRE delinquencies: The Federal Reserve noted that the rate of late payments on commercial real estate loans has risen above pre-pandemic levels, and banks are facing further losses in the sector.

  • Industrial sector booming: The dollar volume of loans for industrial real estate rose by 63% year-over-year in Q1, while retail loans fell 31%, healthcare loans fell 22% and office loans fell by 21%.

  • Pessimistic about the housing market: According to a Gallup poll, only 21% of Americans think that now is a good time to buy a home, tied with last year for the lowest number on record.

  • A strong week for NYC: There were 32 contracts signed for homes above $4 million in Manhattan last week, with 10 over $10 million, the most in the latter category since last July.

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The Manhattan luxury market had a strong week

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