Rise of $1 Million Homes

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Large Property Deals Are Outperforming Smaller Deals link

• Large property sales have recently outpaced smaller deals, with transactions over $25 million seeing a notable uptick. This marks a shift from previous trends where smaller deals were more dominant.

• Rising interest rates have made financing smaller deals more challenging, pushing investors towards larger, more stable assets. This has caused a slowdown in the small property sales market.

• Key markets driving this trend include New York, Los Angeles, and San Francisco. These cities have seen some of the highest transaction volumes for large properties.

Rise of $1 Million Homes link

• Nearly 1 in 10 U.S. homes are valued at $1 million or more, a record 8.5%, up from 7.6% last year. The increase is largely driven by low housing inventory and rising home prices.

• California leads with the highest share of million-dollar homes, with San Francisco and San Jose seeing around 80% of homes worth over $1 million. Cities like Anaheim, San Diego, and Los Angeles are also experiencing rapid growth in this segment.

• The rise in million-dollar homes makes homeownership increasingly challenging, particularly in high-demand tech hubs like the Bay Area, where prices are pushed even higher by buyers from companies like Google and Apple.

Prices Hold Steady in Single-Family Rental Space link

• Single-family rental (SFR) prices are stable despite broader economic concerns. This steadiness contrasts with the volatility seen in other real estate sectors.

• Major players in the SFR market, including institutional investors, continue to show strong interest. This indicates confidence in the long-term demand for rental homes.

• Rent growth in this sector is modest but consistent, particularly in Sun Belt cities. Cities like Phoenix and Charlotte are seeing stable rent increases, supporting the sector's overall resilience.

47% of Online Property Inquiries Are Ignored link

• Nearly half (47%) of online property inquiries were ignored, exposing a major gap in real estate customer service. This lack of responsiveness highlights a significant missed opportunity for brokerages.

• The average response time to online inquiries was 8 hours and 17 minutes, with a median of 39 minutes. Delayed responses can lead to lost potential clients.

• Open houses were also problematic, with 62% of attendees receiving no follow-up after the visit. This inconsistency underscores the need for better lead management practices in the industry.

Multifamily Permits Drop 27% in California link

• California has seen a sharp 27% decline in multifamily housing permits, signaling a significant slowdown in new construction projects. This could exacerbate the state's ongoing housing shortage crisis.

• Rising interest rates and increasing construction costs are key factors driving the reduction in permits. Builders are hesitant to start new projects due to the challenging financial environment.

• Southern California is particularly impacted, with regions like Los Angeles and San Diego experiencing the steepest drops in permit issuance. This trend could limit future housing availability in these already tight markets.

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College Closures Have Surged in the Last Decade link

• Over 500 private, non-profit four-year universities have closed from 2014 to 2023, a threefold increase compared to the previous decade.

• College enrollment has dropped by 12% since 2010, driven by declining birth rates and skepticism about the return on investment for a degree.

• Despite $168 billion in student loan forgiveness, only 22% of Americans believe a college degree is worth it if loans are necessary, reflecting widespread concerns about tuition costs.

What’s the catch?!

Link to the listing

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Vidit

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