Trillions Worth of U.S. Homes at Risk

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Impact of tariffs on commercial real estate link

• New tariffs of up to 25% on Mexican and Canadian goods and 10% on Chinese goods are expected to increase costs for a typical U.S. household by $1,200 a year. Auto buyers could face at least $4,000 in additional costs.

• Industrial and retail leasing demand may weaken as consumer spending drops and companies delay leases. Trade route markets like El Paso, Laredo, and Detroit could be hit hardest due to reliance on Mexican and Canadian imports.

• Tariffs could increase commercial construction costs by 3%–5%, potentially slowing new supply. This could lead to stronger fundamentals for industrial and multifamily properties as supply tightens.

Trillions of Dollars Worth of U.S. Homes at Risk of Climate Events link

• At least $17 trillion worth of U.S. homes face major wind risk, $9.1 trillion are at fire risk, and $7 trillion face flood risk. Los Angeles has the highest total value of homes at fire risk ($831 billion), with Phoenix and Dallas also vulnerable.

• New York City leads in flood risk with $593 billion worth of homes at risk, followed by Miami at $580 billion. New York also tops wind risk exposure with $3 trillion in vulnerable homes, followed by Miami at $1.4 trillion and Boston at $1 trillion.

• Los Angeles faces the highest income burden for fire risk at 13.5 years of cumulative income per household. The average home value at risk in Los Angeles is $1.6 million, the highest of any major metro.

Rocket's Redfin deal sparks concerns, industry shift link

• Rocket's $1.75 billion acquisition of Redfin could split homebuyers between bundled and independent models. Some industry experts warn this could raise costs due to increased marketing spend.

• Rocket expects homebuyers using its ecosystem to save 50% in fees on a median-priced home ($430,000), but details on how these savings will be achieved remain unclear.

• Mortgage brokers are skeptical, with some calling the deal a threat to broker independence. Others believe Rocket’s wholesale channel engagement could create new opportunities.

Home flipping declines again across U.S. in 2024 as profits remain low link

• Home flipping activity dropped 7.7% in 2024, with 297,885 homes flipped — down 32.4% from the 2022 peak of 441,000 flips. Flips accounted for 7.6% of all home sales, down from 8.1% in 2023.

• Gross profits on home flips increased to $72,000 in 2024, translating to a 29.6% return on investment — still well below the 54.2% peak in 2016. Profit margins improved slightly as resale prices grew faster than acquisition costs.

• Charlotte, NC (down 18.5%), Jacksonville, FL (down 16.9%), and New Orleans, LA (down 16.4%) saw the biggest drops in flipping rates. Meanwhile, Cedar Rapids, IA (up 49.6%) and Bellingham, WA (up 28.2%) had the highest increases.

Multifamily debt surges ahead of overall CRE growth link

• Multifamily mortgage debt rose by 5.4% in 2024 to $2.16 trillion, outpacing the overall CRE debt increase of 3.7%. Agency and GSE portfolios accounted for 56% of the growth in multifamily debt.

• Life insurance companies saw the biggest increase in commercial debt holdings, rising by 3% ($22.7 billion) in 2024. Banks' holdings increased by just 1%, making up 10.5% of the total increase.

• The multifamily sector has now posted faster growth than the overall CRE market for 10 straight quarters. Higher mortgage rates are driving demand for rentals, helping multifamily stay strong despite new supply challenges.

Who is doing Flips?!

Tulsa apartment market booms amid rising supply concerns link

• Tulsa's apartment market saw 464 units absorbed in Q4 2024, nearly nine times higher than the 54 units absorbed in Q4 2023. Average occupancy reached 94.4%, with Osage County having the lowest vacancy at 1.9% and Downtown Tulsa the highest at 14.9%.

• Average rents in Tulsa rose by $4 to $1,010 in Q4 2024, supported by a 4.2% unemployment rate and 3.3% GDP growth. However, more than 39,000 units are expected to be under construction by the end of 2025, which could pressure occupancy.

• Colliers expects demand to drop by 477 units and occupancy to fall to 93% in Q4 2025. Rents are projected to grow by $22, reaching $1,032 by year-end.

Orlando multifamily sector poised for robust growth in 2025

• Orlando rents are expected to rise 3.9% in 2025 to $1,802, making it a top-three market for rent growth nationally. Occupancy is projected to increase by 50 basis points to 93.8%.

• The city expects to add 33,200 new jobs by December 2025, with 64,800 new residents moving in this year. Major projects like Walt Disney World Expansion and Universal Studios Epic Universe will add 60,900 jobs between 2025 and 2027.

• Net absorption is forecasted to hit 10,800 units, slightly down from 11,787 last year. Kissimmee/Osceola County will see the highest concentration of deliveries with 3,000 units.

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Myrspoven

Myrspoven is an AI-driven energy optimization platform that helps commercial real estate owners and property managers reduce energy consumption and carbon emissions in buildings by using predictive analytics and automation to optimize HVAC systems and indoor climate control.

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Vidit

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