Massive Housing Shortage = Opportunity of a Lifetime

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More areas slated for redevelopment see big home-price gains link

• Opportunity zones, targeted for redevelopment, are showing significant home price gains. In late 2024, 2 in 5 of these low-income neighborhoods saw a disproportionately large rise in home prices, despite a national trend of softening prices.

• The median sale price in over half of the nation’s opportunity zones was less than $200,000 in Q4, far below the U.S. median of $333,000. Yet, 42% of these zones experienced at least 10% price growth year-over-year, outpacing the national average.

• Government incentives for investing in these areas are bearing fruit. While the broader market saw a 3.4% decline in median home prices from Q3 to Q4 2023, opportunity zones attracted investor interest with their economic potential and tax benefits, contributing to their resilience and growth

Airbnb earned $10B last year, more than double pre-pandemic link

• Airbnb's revenue hit $9.9 billion in 2023, with nearly half being profit, showcasing a significant recovery and growth from the pre-pandemic era. The company's profit soared to $4.8 billion, marking a 156% increase from 2022.

• Despite a $349 million loss in Q4 due to one-time tax expenses, Airbnb's overall bookings and the number of first-time bookers have risen. The platform added 1.2 million active listings in 2023, an 18% increase from the previous year.

• Focusing on organic growth, particularly in international markets, Airbnb plans to leverage AI advancements to enhance user experience and expand beyond travel. The company aims for a cross-vertical expansion, exploring new markets and technologies.

Incomes Grew Faster Than Rents in 2023 link

• In 2023, the median U.S. household's rent-to-income ratio for new leases on market-rate apartments dropped to 22.9%, a decrease from the previous year and 90 basis points below the peak. This decline is attributed to incomes growing faster than rents.

• Despite the improvement, rent-to-income ratios are still slightly above the pre-COVID norm of around 22%. The increase in affordability is largely due to a significant influx of new apartment supply, which has helped cool off rent growth.

• The trend of wages outpacing rent increases is expected to continue into 2024, bolstered by more apartment supply and minimal rent growth. This dynamic expands the demand for rentals across all price points, enhancing market-rate apartment affordability.

Student Housing Occupancy Leaders Since 2020 link

• Since Fall 2020, 20 campuses have led in student housing occupancy, with Appalachian State University nearly reaching 100% occupancy. These schools have demonstrated exceptional demand, filling nearly every available bed over the last three years.

• Wisconsin-Madison is anticipated to add approximately 2,900 beds in the upcoming year, highlighting significant growth and interest in the area's student housing market for Fall 2024.

• While Purdue and Central Florida faced challenges in Fall 2020, both institutions have seen strong recovery in occupancy rates, indicating a resilient student housing market.

Massive Housing Shortage = Opportunity of a Lifetime; Every Agent Needs to Share These Numbers! link

• America faces a massive housing shortage, with a deficit of 5 to 6 million units. This shortage is due to construction not keeping up with population growth, with less than 1.5 million units built annually since 2008.

• The current inventory of homes for sale is about 500,000, far below the normal level of 2.6 million. Many of these listings are teardowns, exacerbating the shortage.

• This housing shortage ensures there won't be a market crash and presents a unique opportunity for buyers. It also means rents will continue to rise, impacting those who choose to wait on the sidelines.

The distress is coming link

• 2023 was a challenging year for real estate, marked by low transactions, high interest rate volatility, and a significant gap between seller expectations and buyer offers. Many sponsors are undercapitalized, facing distress due to missed underwriting assumptions.

• An estimated $55 billion in multifamily CLOs are approaching maturity in 2024 and 2025, with about $35 billion showing signs of distress. This sets the stage for a flood of distressed properties, offering unique investment opportunities.