June 18th, 2024 - This Week in Real Estate

Brought to you by 3i Members, a global deal network for accomplished private investors


What’s new in the world of Real Estate
  • Climate change is affecting coastal real estate

  • Zillow forecasts a market downturn

  • Home sales close to a record low

  • Industrial vacancies rise

Plus: Markets facing downturns, WeWork is back, condo insurance is spiking, and more.

Listing of the week: A 470,000 square-foot mall in Massachusetts.


Freddie Mac 30 Year Fixed
6.95% (-.04% weekly)
Dow Jones Real Estate Index
333.29 (+0.6% weekly)
326.68 (+0.6% weekly)
Zillow Home Value Index
$360,310 (+0.3% monthly)

as of market close on June 17


3i Members: Access Alternative Deal Flow

3i Members is a network for accomplished private investors made up of 400+ members—all of whom have exited a company or lead a family office. Recently, 3i surveyed their network to assess members' investment trends. The notable change? Private equity reached its highest point in 12 months, hitting 34%. 3i actively curates opportunity sets by considering member preferences and market cycles over time, and in their recent Monthly Deal Meeting, they showcased two deals within the private equity space.

Market Updates

Beachfront property across the country is being affected by climate change. With sea levels rising, and storms increasing in frequency and intensity, some previously luxury real estate is being wiped away by flooding and erosion. Just on the East and Gulf coasts, there are an estimated $100 billion worth of real estate facing significant flood risk. Many luxury communities, such as Nantucket and Montauk, are facing difficult decisions on which areas to protect and how to do it with the tax base diminishing due to declining property values. For investors, it is a reminder that the long-term effects of climate change need to be considered when evaluating where to buy..

Zillow sees home prices dropping by 1.4% over the next 12 months. While they expect prices to rise slightly through the end of 2024, they anticipate a continuing increase in new listings that will push prices down through the first half of 2025. New listings were up 8% month over month in May, with overall inventory up 22% year over year. While the Zillow Home Value Index rose in May, it did so at a slower pace than it did in April. Supply is slowly catching up to demand and prices could flatten out or decline.


Home sales fell by 1.7% in May and neared historic lows. Only two months in the past decade have seen fewer home sales, as high prices, low supply and high interest rates continue to stall the market. In an effort to boost sales, 19.2% of homes for sale have seen a price cut, though the median home sale price is still up 5.1% year over year. Meanwhile, more than 60% of listings are sitting on the market for over 30 days without going into contract, and more than 40% are languishing for over 60 days. The increase in “stale listings” reflects a slow market, but is also an indication that buyers and sellers have different ideas of what houses should be valued at in the current environment.

Industrial real estate is starting to see higher vacancy rates. After spending much of the past few years as the standout performer among commercial asset classes, the industrial market is slowing down. This is due in large part to a construction boom that has created new supply that is just coming onto the market. This has resulted in a disconnect between owners, who are expecting higher rents, and renters, who have more inventory to choose from. It is not just leases that are down, but sales as well, as the market has not been insulated from the higher interest rate environment.

Listing of the Week

A property that caught our eye

The Hampshire Mall, located in Hadley, Massachusetts - near Springfield in the Western part of the state - is heading to the foreclosure auction block this Thursday at 11 AM ET. The 470,000 square-foot property has more than 30 stores, including JCPenney, Dick’s Sporting Goods and Planet Fitness, as well as a movie theater. The last assessed value of the mall was $19.2 million, around half of what it was worth in 2009.


  • Markets that face a downturn risk: Real estate data company ATTOM’s “vulnerability score” looks at potential foreclosures, underwater mortgages, housing affordability and unemployment rates, and ranks the Chicago metro area, the New Jersey portion of the NYC metro area and California’s Central Valley as the markets most at risk for a slowdown.

  • WeWork emerges from bankruptcy: Now privately owned, the co-working startup had its restructuring plan approved by a judge, which allows them to close 160 of its 760 worldwide locations, and renegotiate many of its leases.

  • Condo insurance is getting pricey: As buildings age and deferred maintenance piles up, the rising cost of insurance is causing condo fees to skyrocket, potentially lowering the value of properties as would-be buyers try to avoid costly HOA fees.

  • Locked-in mortgages: Over 58% of outstanding mortgages are at rates below 4% and 87% are below 6%, which is why it’s not surprising that homeowners are hesitant to sell until rates come back down.

  • Restaurants are back: Restaurants made up 19% of all retail leases last year, the highest for any category since tracking began in 2007, and 2024 is on track to be the best year ever for the U.S. restaurant industry.

  • NYC broker bill: Proposed legislation would require that whoever hires a broker would be responsible for their fees, instead of having tenants pay, which could reshape rent prices in the Big Apple.

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