July 9, 2024 - This Week in Real Estate

Brought to you by Percent, offering private credit investments to individual investors


What’s new in the world of Real Estate
  • The state of the luxury market

  • Farmland values flatten

  • Homebuyers get less pessimistic

  • A housing bubble down South?

Plus: CRE trending up, pending sales down, single-family rentals go upscale, and more.

Listing of the week: A Superior lighthouse.


Freddie Mac 30 Year Fixed
6.95% (+.09% weekly)
Dow Jones Real Estate Index
336.21 (+0.9% weekly)
330.55 (+0.9% weekly)
Green Street CPPI
123.6 (+0.7% monthly)

as of market close on July 8


Could private credit help your portfolio weather the next downturn?

The stock market is burning red hot these days, which has many investors wondering: If a market correction happens, where can we ride out the storm? 

A Bloomberg survey1 reveals that many institutions now prefer private credit over bonds to hedge against economic downturns. 

Why? T. Rowe Price data2 suggests that allocating 10% to private credit historically reduces volatility and improves risk-adjusted returns

But this ‘safe haven’ asset class isn’t just for Blackstone, KKR, and Morgan Stanley–now, everyday investors can diversify with private credit using Percent. 

  • Low minimums: Start with $500

  • Shorter durations: Maturity in 6-36 months (average ~9 months)

  • Monthly cash flow: Most deals offer cash flow through monthly interest payments.

  • Return potential: Percent boasts a net return over 14% in the last 12 months as of Q1 2024

Market Updates

The luxury real estate market remained strong in the first half of 2024 and is likely to stay that way. The Global Luxury Mid-Year Outlook from Christie’s found that scarcity of supply and the ability of high-net-worth individuals (HNWI) to remain unaffected by macroeconomic conditions has left the luxury market in good shape. High interest rates and inflation have slowed the market somewhat, but there is optimism that both indicators will drop in the coming year. A bigger concern is geopolitics, as ongoing wars and elections could impact government policies. Overall, the report says, “2024 has also exceeded expectations in many regards, and the market feels like it is on track for a solid second half.”

Farmland values have started to plateau after years of growth. The latest report from the Farmers National Company points to high interest rates and declining grain markets as the cause of the stall. While much of the market has held its value, there are some areas, particularly in the Eastern part of the country, that have seen single-digit decreases. However, there is still high investor demand for farmland, and supply remains limited. The report concluded that “strong demand for ag land and its historical appreciation in value will continue to support the current values as we progress into the second half of 2024.”

(Fannie Mae)

Potential homebuyers’ sentiment improved slightly. The Fannie Mae Home Purchase Sentiment Index (HPSI) rose 3.2 points to 72.6, as 19% of consumers think that it’s a good time to buy a home, up from 14% in May. There was also a slight increase, from 64% to 66%, of consumers who believe that now is good time to sell a home. While overall sentiment did go up, it is a far cry from pre-pandemic levels, and a majority of people believe that both housing prices and mortgage rates will climb in the next twelve months, indicating long-term pessimism about the market.

The Southern U.S. may be facing a housing market bubble. The significant rise in home construction over the past few years as a response to pandemic-era migration is now causing a glut in supply. This oversupply, combined with lowered demand, has led to the highest level of new homes on the market ever - more than in the pre-2008 bubble. The median listing price in some Southern cities has already declined, and the combination of high inventory and high mortgage prices could even cause the market correction to turn into a market crash.

Listing of the Week

A property that caught our eye

(MPR News)

A 56-foot tall lighthouse on Lake Superior in Superior, WI, is now available - with a catch. Located at the Duluth-Superior harbor, the Superior Entry Lighthouse was built in 1913 and has a green light that flashes every five seconds from May to October, and a three-second long fog signal that goes off every 30 seconds. The tech exec who bought it in 2019 for $159,000 got frustrated with government requirements about exit and entry, and it’s now back on the market. The price? Free, if you are a government agency or nonprofit that agrees to maintain and preserve it. Letters of intent are due on August 5th. If no organization is selected, the property could be offered for sale to the public once again.


  • Commercial trending upwards: The latest Green Street Commercial Property Price Index (CPPI) showed a 0.7% gain in June, continuing a slow but steady rise in 2024.

  • Pending sales fall: As home prices hit a new record-high, pending sales fell by 5% in June, the biggest drop since February.

  • Luxury rentals gaining popularity: As build-to-rent development has exploded in the past few years, single-family houses with rents above $5,000 per month are making up a larger share of the rental market than ever before.

  • Multifamily concerns: One in five multifamily real estate loans is at risk of becoming delinquent, with apartment buildings in the Sun Belt particularly vulnerable, as supply has risen but demand has slowed since 2019.

  • San Francisco’s struggles: Even with AI companies like OpenAI and Anthropic expanding their footprint in SF, office vacancies hit a new record high while the average asking rent continued to fall.

  • States curbing property taxes: As home values rise, so can property tax bills, and multiple states have passed or considered laws to limit annual increases.


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