10 Cities where Prices are still Booming

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10 Cities where Home Prices are still Booming link

• Military towns are booming Cities like Fayetteville, NC and Jacksonville, NC, both housing large military bases, have seen home prices increase by 11.5% and 9.2% YoY respectively. Access to VA Loans for military personnel and increased military spending are contributing factors.

• Affordability is key: All 10 cities where home prices are booming have typical home values below the US average ($349,000). For instance, Johnson City, TN, a popular retirement destination, has a typical home price of $245k, offering relative affordability in the current housing market.

• Inventory increase could lead to price drops: Despite the current boom, cities like Jacksonville, NC, and Tyler, TX, have seen inventory increases of 44% and 62% YoY respectively. This could potentially lead to a fall in home prices in the latter half of 2023.

• Cities are: Fayetteville, NC, Topeka, KS, Jacksonville, NC, Savannah, GA, Columbia, MO, Macon, GA, Johnson City, TN, Kingsport, TN, Tyler, TX, El Paso, TX

CRE Sector Faces Another Wall of Maturities as $2.75 Trillion Rolls by 2027 link

• An estimated $528.7 billion of commercial mortgages are set to mature this year, with projections for next year at $532.8 billion.

• The market is facing a significant amount of maturities, with an estimated $2.75 trillion of loans set to mature between this year and 2027. This is nearly half of the $5.67 trillion of loans outstanding.

• Banks and thrifts, the largest holders of commercial real estate loans, face the maturity of $1.44 trillion of loans through 2027

At last S&P Case-Shiller Releases Data On Home Price Growth link

• Home prices rose 0.7% nationally in May, marking the fourth consecutive month of increase despite a sharp rise in mortgage interest rates.

• Cities in the Rust Belt, including Chicago (4.6%), Cleveland (3.9%), and New York (3.5%), outperformed the rest of the nation, with the Midwest taking over the South's reign as the strongest region.

• Western cities, where prices had inflated the most, were the worst performers in May, with Seattle and San Francisco seeing price drops of 11.3% and 11% respectively.

Multifamily Cap Rates Stabilize After Three Quarters of Increases link

• Prime multifamily assets cap rates have stabilized last quarter, showing signs of slight improvement.

• The average prime multifamily going-in cap rate increased by only 1 basis point in Q2 to 4.73%, after increasing between 20 and 40 basis points in each of the past three quarters.

• The spread between going-in and exit cap rates is a slim 21 basis points and appears to be stabilizing.

CBRE: Strong Demand Stabilizes Multifamily Market Fundamentals link

• The U.S. multifamily market saw a positive net absorption of 70,200 units in Q2 2023, marking the first significant quarterly demand since Q1 2022.

• New construction deliveries totaled 91,400 units in Q2, pushing the trailing four-quarter total to a record 351,500 units. However, construction starts have been declining, which will reduce deliveries in 2024 and beyond.

• Multifamily investment volume was $27.5 billion in Q2, lower than the $95.6 billion a year ago but slightly higher than Q1 2023. Despite being the lowest Q2 volume since 2014 (excluding Q2 2020 due to the pandemic), multifamily still held the largest share of commercial real estate investment volume in Q2 with 35%.