100% chance of rate cut in Nov

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Share of Land in Each State That Is Federally Owned

100% chance of rate cut in November link

• Bond markets are already pricing in a 100% chance of a rate cut at the Federal Reserve’s November 7th meeting. This is driven by growing concerns over labor market issues, including reduced hiring, declining job openings, and expected mass layoffs.

• Despite the expected rate cut, mortgage rates have actually increased by 0.25% following the Fed's recent rate cut announcement. This highlights the unpredictable short-term effects of rate cuts on mortgage rates.

• Historical patterns show that stock markets have crashed after previous rate-cutting cycles in 2001, 2007, and 2019. Each cycle resulted in significant market corrections despite initial optimism.

Millennials are wealthier than other generations were at their age: see how they did it link

• The net worth of older millennials more than doubled between 2019 and 2022, rising from $60,000 to $130,000. Their wealth growth has been driven by a surge in home equity due to real estate investments.

• Millennials have a greater portion of their wealth tied to real estate compared to Gen X and boomers. By mid-2024, real estate made up 42% of millennial assets, compared to just 30% for Gen X and 24% for boomers.

• Millennials who bought homes before the pandemic accumulated significant wealth as home prices skyrocketed. Mortgage rates dropping during the pandemic also allowed many to refinance, lowering their monthly payments and boosting equity.

Unexpected cities topping real estate investment list link

• Midwest and Northeast cities are becoming prime targets for real estate investors, driven by low vacancy rates and rising demand. Home prices in these regions are about 21.7% lower than the national average.

• Dayton, OH ranked highest for investment, with strong rental activity and below-average mortgage costs compared to the U.S. norm. Other Midwest cities on the list include Cleveland, Pittsburgh, and Grand Rapids.

• Traditional investment hubs like the South and West face rising prices and inventories, shifting investor focus. Knoxville, TN, Fresno, CA, and Albuquerque, NM are the only Southern and Western cities in the top 10.

Net Lease Cap Rates Post Slight Increase in Q3 link

• Cap rates for net lease properties increased slightly by three basis points in Q3, reaching an average of 6.73%. This marks a cautious upward trend in response to macroeconomic pressures, especially in the office sector.

• Office sector properties saw the sharpest rise with an eight-basis-point jump, while industrial rose by five bps and retail by three. This reflects varying degrees of investor caution across property types.

• Sellers are hoping the recent 50-basis-point cut in the federal funds rate will stimulate more transactions, but most are still cautious. Market activity remains slow, with limited movement from private and institutional buyers.

Dockworkers strike: ripple effects on commercial real estate & beyond link

• The ongoing strike by 45,000 ILA members is demanding a 77% wage increase and a ban on certain automated machinery replacements. The U.S. economy risks losing between $7.5 billion per week and up to $4.5 billion daily if the strike continues.

• Industrial properties like warehouses and distribution centers are expected to face serious strain, particularly in port-connected areas. Retailers, including Walmart and Target, are already bracing for possible inventory shortages ahead of the holiday season.

• Key impacted ports include New York/New Jersey, Virginia, Savannah, and Houston. Houston and Virginia Beach show higher vulnerability with lower DSCRs and higher watchlist rates, compared to Savannah’s more resilient industrial sector.

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Vidit

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