Top 10 trends shaping asset management

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Housing affordability didn’t worsen in 2024—the first time in four years link

• The typical U.S. homebuyer spent 41.8% of their income on housing in 2024, a slight improvement from 42.2% in 2023. Despite this, it was the second least affordable year on record, with affordability still below the 2010s average of 30%.

• A homebuyer needed an annual income of $116,782 to afford the median-priced home, $33,000 more than the median household income. Median monthly housing payments rose to $2,920, up 86% since 2019.

• Texas metros like Austin and San Antonio saw the most improvement in affordability, while cities like Anaheim and Chicago experienced declines. Anaheim led with a 12.4% rise in home prices, pushing housing costs to 75.9% of median income.

Top 10 trends shaping asset management in 2025 link

• Hotel sector investors are increasingly seeking tailored advice specific to the hotel segment, such as budget or luxury. Understanding the nuances of these segments is critical for asset managers to deliver value.

• AI is being utilized in project management for budgeting and data-heavy tasks, enhancing efficiency. Advanced calculation capabilities allow asset managers to save time and improve accuracy.

• The all-inclusive model is expanding into the luxury segment, incorporating stays, transfers, and experiences. This trend requires asset managers to adapt to the growing complexity of offerings.

• click on the link to see the rest of the list.

Resounding appetite for apartments overtakes oversupply fears in 4th quarter 2024 link

• U.S. apartment demand hit a three-year high in Q4 2024, absorbing 230,819 units and bringing annual demand to 666,699 units, the highest since early 2022. Meanwhile, 155,408 new units were delivered in Q4, reversing the supply-demand imbalance.

• Texas cities dominated demand, with Dallas absorbing 36,724 units, Houston 31,925 units, and Austin 29,515 units. Washington, DC, saw absorption exceed new supply by over 7,700 units.

• Apartment occupancy rose to 94.8% in December, but rent growth was minimal at 0.5% for 2024. Wage growth outpaced rent increases, helping stabilize rent-to-income ratios and boosting consumer sentiment.

Japanese company quietly becomes America’s fifth-largest homebuilder link

• Sekisui House acquired MDC Holdings in a $5 billion deal, bringing its subsidiaries to an estimated 15,000 annual home deliveries across 16 states. This makes it the fifth-largest U.S. homebuilder by units, according to 2023 statistics.

• The company plans to address labor shortages by training U.S. construction workers in Japanese multidisciplinary techniques. Japanese workers build 37% more homes annually than their U.S. counterparts due to broader skills.

• Revenue from Sekisui House's overseas sales rose 156% in 2024, contributing 30% of the company's total revenue. This highlights its growing reliance on the U.S. market as Japan's housing demand slows.

Silicon Valley commercial vacancy rates pass 20% link

• Office vacancy rates in Silicon Valley reached 21.8% in Q3 2024, more than doubling from 8.6% in 2019. Lab spaces saw the highest vacancy at 24.6%, while industrial spaces maintained a relatively low rate of 4.7%.

• Despite high vacancies, commercial development surged, with 9 million square feet of new space constructed in 2024 compared to 6.4 million in 2023. San Jose's recovery appears stronger than San Francisco, with fewer loan defaults reported.

• Remote work remains a key factor, with the San Jose metro area having a 40.7% return-to-office rate, among the lowest in the nation. Rising living costs and housing shortages in the Bay Area drive employees to work remotely or relocate.

California forcing insurers to cover fire-prone areas. link

• Insurers will now be required to increase coverage in wildfire-prone areas by 5% every two years until reaching 85% of their market share in California. Homeowners in these areas will bear the additional costs, potentially facing steep hikes in premiums.

• Consumer advocates warn of insurance rate increases of 40-50% without sufficient policy availability to meet demand. The FAIR Plan, which has grown by 50% since 2020, remains the last resort for many homeowners.

• Wildfires in California burned over 1 million acres in 2024, impacting home values and leaving 13% of deals in fire zones uncompleted. The high costs of reinsurance, passed to consumers, could further discourage buyers and drive down prices in fire-prone areas.

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Vidit

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