Key Elements Driving Rise in Urgent Care Real Estate and more

CoreLogic Report: Nearly 33 Million and 7.8 Million U.S. Properties at risk of Hurricane-force Wind and Storm Surge Damage, respectively link

• Storm Alert: CoreLogic's 2022 Hurricane Report reveals that nearly 33 million U.S. properties are at risk of hurricane-force wind damage. That's a lot of homes in the danger zone!

• Surge Warning: The report also indicates that around 7.8 million properties are at risk of storm surge damage. This is a significant number and highlights the need for adequate disaster preparedness.

• Coastal Concerns: The report specifically analyzes risk exposure for single-family and multifamily residences along the U.S. Gulf and Atlantic Coasts. If you're living in these areas, it's time to double-check your insurance coverage!

'Lots More Price Declines Are Coming': Moody's Chief Economist Sounds Alarm On Commercial Real Estate, Warns That Loan Defaults Are 'Sure To Increase' link

• Commercial Real Estate Dip: For the first time since 2011, commercial real estate prices in the U.S. fell in the first quarter of 2023. The decline was less than 1%, but it's a sign of a potential trend.

• More Declines Predicted: Moody’s Analytics Chief Economist Mark Zandi warns that we should brace for more price declines. Factors like remote work, online shopping, and a large number of multifamily units under construction are contributing to this prediction.

• Loan Defaults on the Horizon: Zandi also warns that commercial real estate loan delinquencies and defaults are likely to increase, which could cause issues for the banking system. However, he notes that property owners have built up “ample equity” due to price gains during the pandemic, which could help cushion the blow.

U.S. Banks Sink on Concerns About Office Real Estate Loans link

• Banking Blues: U.S. banks are feeling the heat, with the S&P 500 Banks Index closing down 2.0% due to worries about commercial real estate loans. That's a significant dip compared to the broader market's 0.6% fall.

• Office Loan Losses: Wells Fargo CEO Charlie Scharf and Blackstone President Jonathan Gray have voiced concerns about potential losses from office real estate loans. Scharf reassured investors that Wells Fargo is not "overly concentrated" in that area, but the market still reacted.

• Vacancy and Valuation Woes: Gray highlighted an "unprecedented weakness" in older office buildings, with a vacancy rate of over 20% and declining rents. This has led to a reluctance among lenders and buyers, pushing valuations down. Despite this, office buildings still make up about 3% of the U.S. banking system.

U.S. Apartment Values 'Will Plunge A Further 20%,' Economists Say, But Wall Street Still Sees Major Upside In These REITs — Be Greedy When Others Are Fearful? link

• Down, Down, Down: The housing market is in for a rough ride, with Capital Economics predicting a 20% drop in apartment values in 2023 and 2024. High mortgage rates and a weakening economy are the main culprits.

• Silver Lining: Despite the gloomy forecast, some see potential. Stanley Druckenmiller, billionaire investor, suggests the current shortage in single-family homes could turn housing into a beneficiary if things worsen.

• REITs to the Rescue: Wall Street still sees potential in residential Real Estate Investment Trusts (REITs). These entities own income-producing properties and pay dividends to shareholders. Some promising REITs include Mid-America Apartment Communities Inc., AvalonBay Communities Inc., and Camden Property Trust.

Homebuilders are all smiles right now link

• Surge in Confidence: For the first time in nearly a year, homebuilder confidence has moved into positive territory, with the National Home Builders Association's June survey marking the sixth straight month of increase. The score in June was 55, up five points from May.

• Supply Chain Improvements: The positive shift is attributed to strong consumer demand, limited competition from the existing home sales market, and an improving supply chain. However, access to builder and developer loans has become more difficult over the last year, potentially impacting future lot supplies.

• Reduced Sales Incentives: Homebuilders are gradually pulling back on sales incentives, with 25% of homebuilders reducing home prices to bolster sales in June, compared to 27% in May and 30% in April. The average price reduction was 7% in June, below the 8% rate recorded in December 2022.

The 10 Most Affordable Small Towns Where You'd Actually Like To Live, 2023 Edition link

• Small-town charm, big-city appeal: Many city dwellers are trading the hustle and bustle for the serenity of small-town America. These towns offer affordability without compromising on quality of life.

• The rise of remote work: The COVID-19 pandemic has sparked a housing renaissance in small and medium-sized communities. With the ability to work remotely, many have moved to tranquil, smaller towns, causing some prices to skyrocket.

• Diverse offerings: These small towns aren't just affordable; they offer unique attractions. From live music in Branson, MO, to the old-world German charm of New Ulm, MN, each town has its own flavor and appeal.

Owning a starter home is now $1,000+ per month more expensive than renting one link

• Skyrocketing Costs: Homeownership is now over $1,000 per month more expensive than renting, a significant increase from the $884 per month difference last year. High mortgage rates and elevated resale prices are contributing to this affordability challenge.

• Regional Variations: The cost of homeownership varies greatly by market. It's cheapest in Indianapolis ($117), Cincinnati ($181), and Columbus ($413), while it's highest in Austin ($1,664), Denver ($1,410), and Riverside-San Bernardino ($1,109).

• Rental Investment Hotspots: The homeownership premium is below the national average of $1,030 in 15 of the 20 most popular markets for single-family rental investment. This suggests that homes in these markets can be purchased at prices where the rents provide a good yield for landlords.

Key Elements Driving Rise in Urgent Care Real Estate link

• Surge in Demand: Patient volume at urgent care centers has soared 60% since 2019, driving a surge in demand for urgent care space in healthcare real estate. The urgent care market is expected to grow at a compound annual growth rate of 5.35% between 2022 and 2029.

• Convenience and Accessibility: Urgent care facilities, often located in neighborhoods and high-traffic retail areas, offer convenience and accessibility. With extended operating hours, they cater to patients who cannot wait for a traditional primary care appointment or do not require emergency room care.

• Shifting Healthcare Delivery Model: The healthcare industry is shifting towards value-based care and population health management, focusing on preventive and primary care services. Urgent care centers play a crucial role in this model by relieving the burden on emergency departments and primary care clinics.

Why inner-city Chicago Home Prices are Crashing in 2023 link

• Urban vs Suburban: Home prices in Chicago's inner city are crashing in 2023, with high-density ZIP codes experiencing significant declines over the last year. In contrast, Chicago's suburbs are still seeing home price increases. The more densely populated a neighborhood is, the more likely it is for home prices to have declined.

• Distressed Selling: The presence of distressed selling is a major driver behind the price trends in Chicago's Housing Market. Foreclosures and pre-foreclosures are clustering near the inner city with minimal distress occurring in the outlying suburbs. This suggests that sellers in these areas are facing liquidity needs that are causing them to sell at a discounted price.

• High HOA Fees: High Homeowners Association (HOA) fees, particularly in downtown condos, are contributing to the price declines. For instance, a 3 bed, 2 bath condo priced at $449,000 has a monthly cost of $4,500, significantly increased by the $1,300/month HOA fee and $730/month in taxes. This is leading some owners to sell their properties at lower prices to get rid of these high-cost assets.