Why More People Are Moving Back to Cities

In partnership with

New here? Join the newsletter (it's free).

Senior housing occupancy keeps rising link

• Senior housing occupancy rates increased by 0.7 percentage points in Q4 2024, continuing a trend that began in 2021. The sector is benefiting from strong demand and historically low construction levels.

• The Census Bureau projects 1 million additional 80+ households by 2026 and 2 million more by 2029, further driving demand. Supply constraints mean occupancy rates are expected to surpass 90% by the end of 2026.

• Boston, Baltimore, and Tampa lead in occupancy rates, while Atlanta, Houston, and Las Vegas lag due to easier new supply development. Hurricanes in 2024 increased demand in Tampa and Miami, as senior housing communities provided reliable infrastructure.

Ginnie Mae has reportedly cut over 40% of its staff link

• Ginnie Mae has reportedly cut over 40% of its staff, raising fears about its ability to manage $2.7 trillion in mortgage-backed securities. The reductions come as delinquencies in VA and FHA loans—securitized by Ginnie Mae—are rising.

• The government’s cost-cutting initiative, DOGE, has eliminated cybersecurity staff and a team assisting military service members with mortgages. Some lenders report delays in MBS approvals, though larger servicers haven't noticed major changes yet.

• Industry experts worry that Ginnie Mae, already considered under resourced, will struggle with its workload after losing key personnel. With only 150 staff managing over 140 issuers and $2 trillion in guarantees, even small disruptions could ripple through the housing market.

For some CRE owners, insurance now gobbles up double the revenue link

• Insurance costs for the worst 1% of commercial properties jumped from 7% of total revenue in 2018 to 13% in 2023, and for the worst 5%, from 4% to 8%. This surge puts pressure on property owners, impacting NOI, valuations, and lender requirements.

• Texas and Florida metros have the highest concentration of properties where insurance takes up the most revenue, but issues are widespread across the East, Midwest, and South. Multifamily and retail properties are hit hardest, with multifamily insurance costs rising to 14.3% of revenue in 2023.

• Higher rent growth helps absorb insurance costs, but properties with stagnant revenue are feeling the most pain. Without 1.3% additional annual rent growth, properties in the 99th percentile could see a 12% decline in NOI and increased loan-to-value ratios.

Why More People Are Moving Back to Cities link

• The percentage of people moving to cities has climbed to 16%, the highest in a decade, according to the National Association of Realtors. A BrightMLS survey found that 20.6% of homebuyers now prefer city living.

• Rising urban appeal is driven by culture, work proximity, and convenience, reversing the pandemic-era suburban migration trend. Hybrid work schedules and in-person networking needs are pushing professionals back toward city centers.

• Home values have surged 57.4% over the past five years, according to the Federal Housing Finance Agency. Many suburban homeowners are leveraging their equity to afford smaller, more centrally located urban spaces.

Proptech startups that just got funded

• Verkada, an access & security co, raised a $200M E round led by General Catalyst.

• TerraCO2, a low-carbon cement, raised an $82M B round co-led by Just Climate.

• PropHero, a RE investment platform, raised a $25M A round led by Bailador.

Better.com reports 400% growth for home equity lending business link

• Better.com’s HELOC and home equity loan business grew from $15 million per month in January 2024 to $60 million per month by October 2024. This 400% increase was driven by demand from homeowners looking for cash-out refinancing alternatives.

• The company’s HELOC approval process takes less than eight hours, leveraging a marketplace lending model with 32 different investors. This allows them to underwrite for multiple investor criteria, leading to a higher approval rate than competitors.

• In Q4 2024, 47.7% of mortgaged homes in the U.S. were "equity rich," meaning mortgage debt was less than 50% of market value. This remains historically high despite a slight dip from 48.3% in Q3 2024.

U.S. Cap Rate Trends

70% of remote workers would quit if forced back to office full-time, survey finds

These types of hotels are turning out to be a strong investment

Innovative finance strategies drive net lease investment growth

Research Unveils Rising Demand for Work-Leisure Travel Integration

Visualizing Ultra-Processed Food Consumption by Country

What color do you think is the inside?

Link to the listing

That's all folks. If these emails aren't for you anymore, you can unsubscribe here.

Cheers,

Vidit

Instagram

P.S - Read past newsletters here