Staggering 53% decrease in home insurance availability

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Overall Real Estate Market

Chart of the Week - CBRE’s Cap Rate Survey link

• About 65% of plot points are in the cap-rate expansion zone, with an average increase of 30 basis points (bps). The pace slowed from over 50 bps in H2 2022.

• Office cap rates increased the most, up more than 60 bps on average, with Class B and C spaces suffering even greater expansion.

• Retail sector cap rates held steady, reflecting the market's resilience and shedding light on valuable market signals in a time of muted transaction volume.

A Synthesis of Zillow’s latest Rent Report link

• Asking rents increased by 0.5% from June to July, reaching $2,062 nationwide, marking a 3.6% growth compared to last year. This is a slowdown from the record-high 16.2% growth in February 2022.

• Rents have cumulatively risen 2.9% in the first seven months of 2023, with a record-high 977,000 multifamily housing units under construction, potentially suppressing future rent growth.

• Monthly changes show rents climbing quickly in the Northeast (e.g., Buffalo at 1.4%) and slackening in the Sunbelt, with New York City becoming the most expensive major market at $3,445.

Net-Lease Investment Volume Continues to Fall link

• Net-lease investment volume plummeted by 54% year-over-year in Q2 to $9.4 billion; total commercial real estate investment dropped by 61% to $84.3 billion.

• Industrial & logistics share of Q2 net-lease investment volume rose to 57% from 53% in Q2 2022; retail share decreased to 21% from 25%.

• U.S. 10-year Treasury yield averaged 3.8% in Q2, its highest since 2010; net-lease cap rate increased to 6.1% from 5.7% a year ago.

Available home insurance policies in US have dropped 53% in 2023 link

• A staggering 53% decrease in home insurance policy availability in 2023, with homeowners now being offered an average of only 2.87 policies, down from 6.08 in March 2022.

• States prone to natural disasters like Florida and California are facing challenges, and the trend is spreading to other states such as Georgia, South Carolina, New Jersey, New York, and Arizona.

• Insurance rates have surged by an average of 9% in the first half of 2023, and less than 10 home insurance carriers offer the ability to bind a policy 100% online, adding to the challenges for homebuyers and lenders.