Mom and Pop Investors Getting an Edge in the Housing Market

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Profit Margins for U.S. Home Sellers Mostly Unchanged Despite Renewed Price Spike link

• The median U.S. home price hit a record $365,000 in Q2 2024, boosting raw profits for sellers back over $130,000, yet profit margins remained mostly unchanged. This is due to the rising costs sellers faced when initially purchasing their homes.

• Profit margins increased from Q1 2024 to Q2 2024 in 58.8% of metropolitan areas but were still down annually in 62.5% of these areas. Higher-end markets saw the most significant decline in profit margins year-over-year.

• Despite a stable 55.8% profit margin on typical home sales, raw profits marked the highest since 2022, with notable increases in cities like Chicago and New York. However, cash sales declined slightly to 39.1% of all transactions in Q2 2024.

More young adults now live with their parents than at any point since 1940 link

• The share of 25-35 year-olds living with parents has doubled from 7% in 1970 to 17% in 2022, returning to levels not seen since the 1940s. This trend reflects a significant reversal from the mid-20th century when economic growth enabled more young adults to move out on their own.

• Economic challenges, including declining incomes and rising housing costs, have made it financially difficult for young adults to afford living independently. In 2022, only 18% of young adults living with their parents had incomes that would allow them to comfortably afford local rent prices.

  

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• Even among college graduates, the trend of living with parents is increasing, with 12% of 25-35 year-olds with degrees living at home in 2022, double the rate from 1980. The burden of student debt and high housing costs contribute to this trend, affecting even those with higher education.

All-Cash Offers From Big Investors Recede, Giving Mom and Pops an Edge in the Housing Market

• The share of investors purchasing homes with cash fell to 64% in Q1 2024 from 69.7% in Q4 2021. This is the lowest share since 2008, easing competition for regular homebuyers.

• Small investors now dominate the market, making up 62.6% of purchases in early 2024, the highest in history. This shift reduces artificial demand and upward pressure on prices.

• Cities with the highest all-cash investor purchases include Portland-South Portland, ME (81.3%), Albuquerque, NM (81.2%), and Toledo, OH (80.5%). New York City saw 64.5% all-cash purchases, slightly above the national average.

Second Great Resignation Could Emerge as Workers Seek Higher Pay, Remote Work link

• Forty percent of fully in-person workers prefer a hybrid or fully remote work arrangement. This indicates a significant shift in workplace preferences, potentially driving another wave of resignations.

• A ResumeBuilder.com survey found that 28% of workers plan to quit their jobs this year, mirroring the first Great Resignation. The trend is particularly strong among younger workers aged 18-34.

• Job changes are seen as a faster way to increase salaries, especially for younger employees. Career strategist Julia Toothacre notes this group often switches jobs to find the best fit for their career goals and work environments.

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How Tech is Changing the Game for Commercial Real Estate Brokers

Indiana markets are indicative of the Midwest regional housing boom 

Why a Foreclosure Wave Isn’t on the Horizon

This Semiconductor Hot Spot Is Seeing a Crazy Apartment Boom

America spends more money on dining out than it does on food at home

You are in for a surprise!

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That's all, folks.

Cheers,

Vidit

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