July 2, 2024 - This Week in Real Estate

Brought to you by Partners Finance, offering exclusive CRE investment opportunities


What’s new in the world of Real Estate
  • Another record for housing prices

  • KKR’s big bet on rentals

  • Commercial prices inch up

  • New homes are cheaper than existing homes

Plus: Where prices might fall, retail on the upswing, REITs hit by redemptions, and more.

Listing of the week: A Manhattan office tower.


Freddie Mac 30 Year Fixed
6.86% (-.01% weekly)
Dow Jones Real Estate Index
333.25 (-1.2% weekly)
327.74 (-0.7% weekly)

as of market close on July 1


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Market Updates


Both the Case-Shiller and FHFA House Price indices hit record highs. Even with persistently high mortgage rates and softening home sales, prices continue to rise, with both indices reporting a 6.3% year-over-year gain in their April numbers. But the rate of appreciation is slowing as more inventory has been coming to the market. The Northeast was the best performing region in the Case-Shiller index, and similarly, New England and the Middle Atlantic came out on top in the FHFA index. Case-Shiller also looks at city trends, and reported top 5 increases in the past year coming in San Diego, New York, Chicago, Los Angeles and Cleveland.

Investment giant KKR acquired $2.1 billion worth of multifamily assets. In their largest ever purchase of real estate, they bought 18 properties from a closed-end fund sponsored by Quarterra Multifamily, a real estate developer. The portfolio includes 5,200 apartments across eight states, and the purchase is a clear bet on rental buildings. KKR’s head of real estate equity in the Americas said “[w]e believe this is a great moment to invest in real estate.” Retail investors should always take note when a major firm makes a splash like this.


Commercial real estate prices increased slightly in May. CoStar’s Commercial Repeat-Sale Indices (CCRSI), based on 1,207 repeat sales, showed a 1.3% value-weighted increase and a 0.2% equal-weighted increase. The value-weighted index is more influenced by biggest transaction in major markets, while the equal-weighted index tracks sales in smaller markets. Transaction activity was up by 0.6%, the third straight month it has increased, showing that more investors believe now is a good time to buy.

The average new home now costs less than the average existing home. The median sale price of a new home dropped by 0.9% in May to $417,400, compared to the median existing home price of $419,300. This represents a major shift, as new homes have generally been pricier than existing homes for decades. Reasons include the low supply of existing homes, the pace of new construction, and the trend towards building smaller homes that are more affordable. Sales of new homes actually dropped in May by 11.3% compared to April, and roughly 1 in 4 homebuilders cut prices.

Listing of the Week

A property that caught our eye


An office building in Midtown Manhattan with 920,000 square feet of space is going up for auction with a starting bid of $7.5 million. 135 W. 50th St. is controlled by banking giant UBS and recently had a $76 million renovation. The building is home to a 12,000 square foot food hall, but is currently only 35% occupied and can be converted to mixed-use, residential, hospitality or community facility uses. The auction opens on July 29th and closes on the 31st.


  • Cities heading for downturns: Realtor.com looked at markets with rising supply and falling demand but where prices haven’t decreased yet, and named multiple metro areas in Florida, Texas, and Denver, CO as the most likely candidates to see prices fall in the next year.

  • Retail space in demand: 98% of retail space at shopping centers is being leased within 9 months of becoming available, a record-high, as overall leasing activity hits its fastest pace in decades.

  • Private REITs struggling: After major fund Starwood capped investor withdrawals, other private funds are seeing increases in their own redemption requests, as investors worry about liquidity. Meanwhile, fundraising has dropped to a five-year low. Together, these trends are driving decreases the net asset value of these funds.

(Wall Street Journal)

  • Pending sales drop: The National Association of Realtors’ Pending Home Sale Index fell by 2.1% in May and is down by 6.6% year-over-year, as demand has fallen despite increasing supply.

  • Will offices continue to empty?: A report from Moody’s projects that as work-from-home policies continue to expand, nationwide office vacancy rates will hit 24% in early 2026, which could lead to a $250 billion drop in property values.

  • Looking to 2026: Economists at Bank of America think that the housing market could remain “stuck” until 2026, though they project housing prices to rise by 4.5% this year and by 5% next year, before flattening out in two years.

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