Home values to plunge in these zones

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Freddie Mac Bullish on Multifamily link

• Freddie Mac projects multifamily originations to hit between $370 billion and $380 billion in 2025, up from $320 billion in 2024. Despite high new supply levels, vacancy rates are expected to stay stable, with modest rent growth.

• The 10-year Treasury yield dropped from 4.45% in 2023 to 4.28% in Q4 2024, influencing cap rates and property values. The market still struggles with legacy low-interest loans from 2020-2022, when borrowing rates were below 4%.

• Renting remains more affordable than homeownership, with the Q3 2024 average rent at $1,841 compared to a $1,954 monthly mortgage payment. The gap, plus the lack of a down payment requirement, keeps rental demand high.

Senior support services are in short supply link

• The AARP survey found that while most seniors want to stay in their homes, fewer than 1% of single-family homes are wheelchair accessible. Less than 4% of homes can be easily modified to accommodate mobility issues.

• The aging U.S. population is outpacing available community support services, leaving many seniors without the resources needed to remain in place. This gap presents a policy challenge and a business opportunity for home remodelers.

• Seniors are increasingly open to using technology to help them age in place, particularly for health management. AARP suggests that integrating more technology into homes could help bridge the gap in available care services.

Industrial leads multitenant investment sales link

• The multitenant market saw $53.9 billion in investment sales during Q4, a 36.8% jump from the previous quarter and an 18.8% increase year-over-year. Total sales volume for 2024 reached $166.9 billion, narrowly surpassing 2023 by 2.9%.

• The industrial sector led with $22.8 billion in Q4 sales, up 31% from Q3, while office sales hit $19 billion, marking a 60% jump and the strongest performance since Q3 2022. Retail transactions reached $12 billion, the highest in over a year, driven by open-air shopping centers and services-based retail.

• Cap rates for multitenant investments rose to 7.05%, the highest in over a decade, with office at 7.47%, retail at 7.2%, and industrial at 6.17%. Private investors made up 55% of buyers, particularly active in retail, while institutional buyers focused on industrial properties, accounting for 22% of transactions.

Cities where ultraluxury homes are selling fast

• The ultraluxury real estate market hit $31.39 billion in 2024, with 1,744 homes selling for $10 million or more. Manhattan led the way with 307 transactions totaling $7.55 billion.

• Miami-Dade and Palm Beach County saw a combined $5.21 billion in high-end sales, fueled by wealthy buyers relocating from New York. Southwest Florida also surged, with 72 transactions adding up to $1.03 billion.

• The top 10 markets accounted for nearly 75% of all ultraluxury sales, driven by rising billionaire wealth and generational wealth transfers. 2025 is expected to continue this trend, with demand for elite properties staying strong.

• click on the link to see the rest of the list.

Home values to plunge in ‘climate abandonment’ zones link

• Home values in "climate abandonment" zones are projected to decline by an average of 6.2% through 2055 due to rising insurance costs and population loss. Fresno County, CA, is expected to see the steepest drop at 10.4%, with its population declining by 46% and insurance premiums rising 56%.

• "Climate-resilient" areas, making up just 5% of census tracts, are expected to appreciate by 10.8% over the next 30 years. Dane County, WI, leads this group with a projected 13.5% increase, followed by Denver County, CO, and Johnson County, KS.

• "Risky-growth" areas, despite high climate risks and rising insurance premiums, are projected to see the fastest population growth, up 76% by 2055. The top five counties in this category are all in Texas, including Fort Bend, Denton, and Travis.

The ‘California exodus’ storyline is coming to an end link

• Southern California remains one of the most competitive housing markets despite high prices and low inventory. Job and population growth are expected to sustain demand in Los Angeles, San Diego, Orange County, and the Inland Empire.

• The report challenges the narrative of mass migration out of California, citing continued economic strength. Rising home prices have not significantly reduced competition for housing.

• Southern California is still competitive with other major U.S. markets, even as affordability concerns persist. Low supply is keeping home values strong, making it difficult for prices to decline.

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This is just amazing!

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Vidit

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