Multifamily Market Has Officially Bottomed Out Per These Numbers

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This Common Administrative Mortgage Procedure Is Now Killing Deals

• The rising use of estoppel certificates is disrupting mortgage deals, causing some transactions to fall through entirely. These documents, meant to verify terms, are increasingly leading to disputes or delays.

• Lenders and borrowers are clashing over the details in these certificates, with mismatches in information often requiring renegotiation or outright cancellation of deals.

• The growing scrutiny around these certificates is particularly affecting commercial real estate transactions, adding another layer of complexity to an already challenging market.

Investors bought one in six homes sold in Q2 2024 link

• Investors accounted for 15.6% of all home purchases in Q2 2024, up slightly from 15.1% in Q1 2024. Despite this increase, the share remains below the peak of 19.7% seen in Q1 2022.

• The markets with the highest investor activity were Miami, Atlanta, and Charlotte. In Miami, investors bought 26.9% of homes sold, the highest among the major metros.

• The rise in investor purchases is partly driven by strong rental demand and limited housing inventory. Many investors are focusing on markets with strong population growth and rental yield potential.

CBRE Declares the Multifamily Market Has Bottomed Out link

• CBRE reports that the multifamily market has hit its lowest point and is beginning to stabilize, signaling a potential recovery. This follows a period of declining rents and high vacancy rates.

• The firm anticipates that market fundamentals will gradually improve, driven by renewed demand and reduced new supply entering the market. This could lead to rent growth resuming in many areas by 2025.

• Several cities, especially in the Sun Belt and the West, are expected to see quicker recoveries compared to others. Markets like Phoenix, Austin, and Las Vegas are among those likely to bounce back faster due to their strong job growth and population inflows.

Is Inventory Growth Finally Slowing? What do numbers say? link

• The unsold inventory of single-family homes is up by less than 1% for the week, the slowest growth rate in months, suggesting a potential plateau in inventory as mortgage rates fall.

• New listings are steady, with 67,000 new single-family homes listed this week, showing an 8.5% increase in total sellers compared to last year. However, Florida's inventory growth has slightly declined, while Texas still sees a modest increase.

• Home prices remain flat, with the median price at $449,900, unchanged from last year. Despite stable prices, nearly 40% of listings have undergone price reductions, indicating seller uncertainty in a sluggish market.

Office CMBS Delinquency Rate Tops 8% for First Time Since November 2013 link

• The office CMBS (Commercial Mortgage-Backed Securities) delinquency rate has surged to 8.17%, marking its highest point since November 2013. This spike underscores the ongoing challenges in the office real estate sector, exacerbated by the slow return to offices post-pandemic.

• July 2024 alone saw an increase of 47 basis points in delinquency, reflecting deeper struggles in repaying commercial mortgage debts. The trend is likely influenced by continuing remote work trends and rising vacancies in key office markets.

• Major cities like New York and San Francisco are at the center of these delinquencies, driven by reduced demand for office space. The broader economic impact could ripple across other sectors as office property owners struggle to meet financial obligations.

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Almost ~$2k per square feet!

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