The chances of a US recession are now just 15% and more.

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Estimated read time: 5 minutes 34 seconds.

Weekly Recap

A snapshot of the best real estate insights I sent each day this week. Enjoy it with your Saturday coffee. ☕️

Labor Market Shows Further Signs of Cooling link

• The U.S. added 187,000 jobs in August, surpassing expectations.

• Average monthly job gain over the past three months dropped to 150,000.

• Unemployment rate increased to 3.8%, but labor force participation rate rose to 62.8%.

Top 10 U.S. Metros Where Mortgage Originations Are On The Rise link

• U.S. residential property mortgages surged to 1.56 million in Q2 2023.

• Significant quarterly jumps observed in metros like Knoxville, TN, Honolulu, HI, and Madison, WI.

• Mortgages backed by the FHA constituted 13.8% of all residential property loans in Q2 2023.

It was a bad week for the US Economy. What will Home Prices do in Response? link

• US labor market showed significant slowing, indicating challenges for the US Housing Market.

• Job Openings in July 2023 fell by 27% from their peak last year.

• Wage growth for non-supervisory employees slowed to 3.8% YoY in August.

Nation’s Best and Worst Unemployment Rates by Market link

• U.S. unemployment rate in July remained steady at 3.8%.

• Baltimore had the lowest unemployment rate at 1.7%, while Las Vegas had the highest at 6.1%.

• Year-over-year, unemployment rates rose in 30 of the nation’s largest markets.

Property Taxes By State: A Breakdown Of The States With The Highest And Lowest Property Taxes In 2023 link

• Every state requires homeowners to pay property taxes, but rates vary.

• Hawaii has the lowest property tax rate, followed by states like Alabama, Colorado, and Louisiana.

• Northeast and Midwest regions have the highest property taxes with states like New Jersey, Illinois, and New Hampshire topping the list.

Trends Shaping Multifamily Housing in 2023 link

• Construction industry faces a significant labor shortage.

• Rising material prices due to COVID-19 and labor shortages.

• Tightening financing opportunities and oversaturated markets pose challenges.

The housing market is about to take a hit as student loan payments restart link

• 58% of economists believe resumption of student loan payments will impact mortgage affordability.

• US homeownership rate decreased to 65.9%.

• Average student loan payment is about 20% of the median US monthly mortgage payment.

East Coast Resilience Attributed to Low Supply Pressure link

• East Coast apartment development pace is 2-3 times lower than most other regions.

• Year-over-year effective asking rent change was 3.2% in July on the East Coast.

• Annual inventory growth for the East Coast was only 1.2% in the year-ending Q2 2023.

2 Arizona Cities Top the List of Best Places for Renters link

• Chandler and Gilbert, Arizona, rank as the top two cities for renters.

• Average rental price for one- and two-bedroom apartments in these cities is $1,301 and $1,590, respectively.

• Affordability is a factor, but other factors like crime and unemployment rates also play a role.

Lumber Prices Down 14% YoY link

• The Lumber Futures (LBR) contract is priced at $503.00 per 1000 board feet, a 14% decrease from last year.

• Lumber prices did not see the usual peak around April or May, possibly due to a housing market slowdown.

Master-planned communities are gaining popularity link

• These communities are popular for their design and job opportunities, with single-family rentals becoming significant.

• The build-to-rent sector is valued at $4.4 trillion, showing stability with rising rents and record completions.

• Build-to-rent units in these communities attract a diverse range of consumers.

Historic Highs Are Behind for Self Storage link

• National street rate for storage dropped to $141 in July, still higher than 2019 and 2020 rates.

• Rates for 10×10 units declined year-over-year in all top 31 metros.

• 4,916 self-storage projects were in development as of July, including planned, abandoned, and under construction.

Housing September 4thUpdate: Inventory increased 1.1% Week-over-week; Down 7.9% Year-over-year link

• Active single-family inventory rose by 1.1% in a week to 509 thousand units.

• Housing inventory has seen a 3.7% rise year-to-date, with a 25.5% surge from the seasonal bottom.

• Inventory remains 7.9% lower than the same week in 2022 and 47.0% below 2019 levels.

Apartment Rent Growth Has Moved Into Negative Territory link

• Both annual and monthly rent growth are now negative.

• Rent index dropped by 0.1% in August, marking the first decline since the pandemic's start.

• Rent prices saw a downturn a month earlier than last year, contrasting with the usual spring and summer rise.

Top 10 Self Storage Markets for Deliveries in H1 2023 link

• Over 23.8 million sq. ft. of storage space was completed in H1 2023, up from 21.2 million sq. ft. in H1 2022.

• Chicago led with a 424% growth, completing over 1.2 million sq. ft.

• Dallas-Fort Worth followed with 1.1 million sq. ft., a significant increase from the previous year.

The Shift to the South: Auto Industry's New Heartland link

• Ford's site in Stanton, Tenn., will employ around 6,000 workers, 15 times the town's population.

• Over $110 billion has been invested in EV-related projects in the U.S. since 2018, with half directed towards Southern states.

• The influx of auto industry jobs in the South brings both opportunities and challenges for local communities.

Latest Proptech Rounds

1. Metroc: A platform that serves as a project finder for General Contractors (GCs) and suppliers, recently secured funding of €2M in a Seed round.

2. Jitty: A property search engine that has successfully raised $2M in a Pre-Seed funding round.

3. Redaptive: This company offers energy efficiency as a service and has recently raised a whopping $125M.

4. Agave: An API specifically designed for construction software. They've recently secured $2.9M in Seed funding.

5. Realm: A platform dedicated to renovation planning for homeowners, recently raised $9.7M.

6. Kiki: A startup focused on subletting - secured $6M in Seed funding.

7. Pirros: A platform for managing architectural drawing sets - raised $2M in Seed funding.

8. Rent Butter: A solution for tenant screening - secured $3M in Seed funding.

9. Vecindapp: A Property Management System (PMS) that has raised $250K.

10. Allume Energy: A startup focusing on rooftop solar solutions - secured $1.5M.

The chances of a US recession are now just 15%, Goldman Sachs says link

• Goldman Sachs predicts only a 15% chance of a US recession in the next year.

• The Federal Reserve is likely concluding its inflation combat strategy.

• Economic indicators suggest further interest rate hikes might be unnecessary.

Apartment List National Rent Report link

• Annual rent growth is at -1.2%, indicating a decrease in rent prices.

• Monthly rent growth turned negative in August.

• The vacancy index stands at 6.4%, with a record number of apartments under construction.

Here Are The Latest Industrial Hotspots link

• Secondary and tertiary markets are emerging as new industrial hotspots.

• New hotspots include Savannah, Las Vegas, Phoenix, and El Paso.

$205B of Dry Powder Ready to Pounce on Distressed CRE Assets link

• Investors have over $205B set aside for US CRE investments.

• CRE prices have decreased by an average of 16% since March 2022.

Three Trends Impacting the Food and Beverage Cold Chain Industry link

• Online sales growth in the food and beverage sector doubled to 75% in 2020.

• Automation is revolutionizing the industry, with robotics and automated systems in cold storage.

• Companies are focusing on sustainability, transitioning to electric vehicle fleets.

The Rise Of Alternative Assets In The Industrial Sector link

• Emerging subcategories are bolstering the industrial sector's growth.

• Industrial outdoor storage (IOS) is one of the most sought-after commodities in commercial real estate.

Top 10 list of cities where sellers are slashing prices: link

• Huntsville, AL leads with a 69.6% increase in price reductions year over year, followed by Lafayette, LA, and McAllen, TX.

Electric Vehicle Trends and Challenges for Industrial Real Estate link

• The global EV market is projected to grow significantly by 2027.

• Industrial real estate will face challenges accommodating EV growth, especially in densely populated areas.

U.S. Job Market Remains Resilient in August link

• The U.S. added approximately 187,000 jobs in August 2023, surpassing projections.

• This marks the third consecutive month with job gains below 200,000.

• The U.S. has regained all jobs lost during the COVID-19 pandemic.

National Rent Report In August 2023 link

• One-bedroom rent increased by 0.3% to $1,242, and two-bedrooms grew 0.5% to $1,493.

• San Francisco remains the priciest city for rent, while Wichita is the most affordable.

• New Orleans saw the largest monthly growth, and Baltimore witnessed the biggest decline.

Retail Demand Keeps Rising, but at a Much Slower Pace link

• Retail demand growth is decelerating due to changing consumer behavior.

• A shortage of available spaces is affecting leasing activity.

• Retailers are adapting to meet changing market demands.

Mortgage demand falls to lowest level since 1996 link

• Mortgage applications have dropped to their lowest since December 1996.

• The purchase index hit a 28-year low, and the refinance index was down 5% from the previous week.

• Mortgage rates were at 7.18% last week.

CMBS Loan Loss Report: Volume of Loan Losses Increases in August 2023 link

• $418.9 million across fourteen loans were resolved in August 2023, resulting in $218.2 million in total losses.

• Loan loss volume rose significantly from July 2023.

The top 10 colleges for student housing deliveries this fall link

• Student housing bed deliveries increased to 40,000 for fall 2023.

• Georgia Tech and the University of Texas at Austin lead in new beds.

• Monthly average rents for student housing reached a record high of $849 per bedroom.

North America Data Center Trends H1 2023 link

• Supply in primary markets rose by 491.5 MW in H1 2023.

• Primary market absorption totaled 468.8 MW in H1 2023.

• AI's demand is growing, with many startups looking for large requirements.

The Most Overpriced Housing Markets Of 2023 link

• Lubbock's median sale price increased by 45.8% to $350,000.

• Sunnyvale had 81.3% of homes sold above asking price, with a median sale price of $2.09 million.

• Worcester saw 76.1% of homes selling above their asking price, with a median sale price of $400,000.

Extended Stay Hotels are gaining popularity link

• Extended stay hotels cater to needs like work re-location and extended travel.

• They showed resilience during the Covid pandemic with an average occupancy of 74% in 2020.

• The shift to remote work and economic re-opening has increased their demand.

Inside the Wild Swings of Smaller Industrial Sales link

• Industrial properties performed well during the pandemic.

• The landscape is changing with evolving demand for smaller industrial real estate.

• Demand for industrial properties is cooling in certain high-demand areas.

Florida builders keep surfing the rate buydown wave link

• Mortgage rate incentives are boosting new home sales.

• Builders are using strategies for rate buydowns, with rates as low as 4.75%-4.99% for quick inventory home sales.

• Jacksonville and Orlando markets are more rate-sensitive.

Syracuse Boasts Nation’s Highest Apartment Retention Rate link

• Syracuse renters renewed their leases 66.7% of the time over the past year.

• The retention rate surpassed the national average of approximately 53%.

• Syracuse's occupancy rate was 96.6% in August.

10 Cities Where Hosts Can Make the Biggest Profits link

• Crestview, FL: Potential annual profit: $91,310

• Kapaa, HI: Potential annual profit: $87,553

• Roanoke Rapids, NC: Potential annual profit: $83,574

• Ellensburg, WA: Potential annual profit: $80,433

• Georgetown, SC: Potential annual profit: $70,284

• Kalamazoo, MI: Potential annual profit: $68,074

• Cambridge, MD: Potential annual profit: $62,554

• Daphne, AL: Potential annual profit: $61,887

• Olean, NY: Potential annual profit: $61,229

• State College, PA: Potential annual profit: $60,593.

That's all folks.

If you enjoyed today's recap, please reply and let me know. 🙂 

Cheers,

Vidit

P.S. - Please help me understand if I should send this recap every weekend or if it is overkill. Just reply to this email with a yes or no. 🙂 

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