AI Is Taking Over Real Estate

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Foreign money floods U.S. stocks, ownership hits all-time high link

• Foreign investors now own 18% of the entire U.S. equity market—an all-time high, according to Federal Reserve data. This trend has grown steadily as international sellers of goods to the U.S. recycle trade surplus dollars into American stocks.

• The rising foreign stake in U.S. equities is closely tied to the trade deficit. If the deficit narrows, fewer dollars will be available to flow back into the S&P 500, which could impact market liquidity.

• This shift reflects a growing reliance on international capital to support U.S. asset prices. Any disruption in global trade dynamics could reduce equity demand and pressure valuations.

CRE Loan Performance Trends in Q1 2025: link

• Commercial mortgage originations fell to $5.1B in Q1 2025, down from $5.6B in Q4 2024, ending a year-long growth streak. But multifamily originations surged 67% year-over-year, signaling targeted strength.

• Overall CRE loan delinquencies stayed flat at 1.99%, but serious delinquencies are continuing a slow decline—possibly signaling stabilization.

• Office loan delinquencies dropped by over 20 bps to 6.54%, their second straight quarterly improvement. Meanwhile, multifamily delinquency rates are still rising.

Hotel growth slows in 2025 - luxury thrives, mid-tier suffers link

• U.S. hotel RevPAR growth has been downgraded to just 1.0% for 2025, down 80 basis points from previous forecasts, as federal job cuts, tariffs, and weak demand weigh heavily on performance.

• Hurricanes Helene and Milton boosted demand temporarily in Q1, but the impact is fading fast—expect a noticeable drop in Q4 performance comparisons in storm-affected regions.

• Luxury hotels are still seeing demand and ADR growth, but select service hotels are taking the biggest hit as middle-income travel weakens and international visitors decline.

The affordability gap: home ownership trends link

• A first-time buyer in 2024 must spend 58% of their take-home pay on a mortgage, up from 40% in 2019, even though incomes only rose 41%—far below the doubling of monthly mortgage costs. This is the biggest affordability gap since the early 1980s.

• Lower-income individuals aged 25–44 missed out on most of the pandemic stock market boom; just 35% of middle-income earners in this group invested in stocks, compared to 70% of the top 5%—limiting their ability to meet rising down payment needs.

• Suburbs, small metros, and rural areas saw the sharpest affordability declines from 2019 to 2024. In contrast, urban cores in large cities had better income growth and smaller home price increases, flipping the traditional affordability narrative.

Luxury Homes Under $1M? Only 7 U.S. Cities Left—Detroit Tops the List link

• Only 7 U.S. metro areas still offer luxury homes for under $1M, down from 30 in 2020 and 35 in 2013–2017. Detroit leads with a median luxury price of $753,851—44% lower than the national luxury median of $1.35M.

• Luxury prices in these affordable metros have surged since 2015, with increases like 81.2% in Detroit, 70.2% in Cincinnati, and 68.7% in San Antonio. Even these “bargain” markets are catching up fast.

• These cities have avoided explosive investor demand and speculative buying, which has kept prices more stable. Buyers can still find walkable neighborhoods with charm and upscale finishes—something nearly impossible under $1M in places like SF or NYC.

Houston Leads as Texas Sees Apartment Demand Outrun Supply link

• Houston posted a demand surplus of 8,034 apartment units over the past year—second only to New York nationwide. It was the only Texas city to break into the national top five for net apartment demand.

• Dallas absorbed 3,500 more units than were delivered, narrowly missing the top five for demand surplus. Austin, by contrast, saw slightly more supply than demand, with just a 50-unit gap.

• Dallas, Austin, and Houston all ranked in the top five U.S. markets for apartment deliveries, showing that high supply hasn't yet outpaced absorption—except marginally in Austin.

AI Is Taking Over Real Estate—Here’s What’s Changing Fast link

• AI-driven analytics now help investors assess market trends, risks, and optimize portfolios in real time by analyzing everything from crime rates to social media signals. This means faster decisions with fewer mistakes.

• Virtual property tours powered by AI and VR offer 360-degree views, personalized recommendations, and live chatbot support—cutting down in-person showings and boosting buyer engagement.

• Predictive pricing models use big data and machine learning to generate real-time valuations, reducing appraisal delays and making negotiations more transparent and data-backed.

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How Long It Takes To Save for A Home by State 

• In Hawaii, the median home price hit $846,400 in 2023, and residents are only able to save $489/month—meaning it takes nearly 29 years to afford a home. It's the longest timeline in the country due to extreme home prices and low leftover income.

• California buyers need over 10 years to save for a median-priced home at $725,800, with just $1,150 in monthly savings available after expenses. High prices and zoning limits are pushing locals out of the market.

• Nearly 1 in 4 millennials still plan to buy within 6 months despite affordability issues and 6.81% mortgage rates. Renting remains the more viable path for saving in many high-cost states.

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Mapped: Average Salary by State in 2025

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Vidit

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