Fed Holds Rates Steady,Starter Homes Are Now 70 Years Old

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Immigration Crackdown Is Slashing Labor and Housing Demand link

• If deportations continue at 3,000 per day, the U.S. labor force will shrink by around 1 million workers in 2025—cutting job growth sharply across key sectors. With no illegal immigration, projected monthly job growth drops to just 72,000.

• Sectors like agriculture, construction, and hospitality will likely face labor shortages, pushing wages higher as immigration restrictions bite into their workforce supply.

• Housing demand is expected to fall as immigration slows, adding another headwind to housing markets already facing affordability and rate pressures.

How Real Estate Investors Are Using Property Data link

• Investors are targeting areas with under 4 months of housing supply and decreasing Days on Market (DOM) — early signs that inventory is tightening and demand is rising. These metrics suggest prices could jump soon.

• A spike in building permits—especially for renovations and upgrades—often signals rising confidence among homeowners. If prices are still low, this combo may flag undervalued neighborhoods about to surge.

• New branches of real estate agencies and banks are a strong tell: firms only expand into areas with research-backed growth potential. Seeing 3+ real estate offices pop up nearby often means price hikes are coming.

Fed Holds Rates Steady—Trump Slams, Dissenters Push Back link

• The Fed kept rates unchanged at 4.25%–4.5% despite rare dissent from two governors—first time since 1993 that multiple no-votes were recorded on a rate decision. Both dissenters favored cuts, citing softening labor markets and cooling inflation.

• Traders had expected a rate cut in September, but odds dropped from 64% to 46% after Powell said no decision had been made. Inflation came in at 2.1% in Q2, close to the Fed’s 2% target, while GDP surprised with a 3% annualized gain.

• Trump wants a 3-point rate cut to ease debt and revive housing, but the Fed signaled it won’t be swayed by political pressure. Two Fed buildings' renovation overruns also became a flashpoint in the ongoing spat.

Office Demand Shifts: Class A Absorption Surges While Gateway Markets Stumble link

• Office leasing fell 2.2% in Q2 to 49.2M sq. ft., but demand (measured by active requirements) rose 5.8%, hitting its highest point since late 2021. Tertiary markets outpaced big cities, with leasing up 16% vs. a 6% drop in gateway markets.

• Class A office space recorded nearly 5M sq. ft. of positive net absorption—no longer limited to new builds for the first time in 6 years. Meanwhile, overall office inventory shrank by 700,000 sq. ft. due to heavy demolitions and conversions.

• Downsizing is slowing: tenants with expiring leases only reduced space by 2.8% this year, compared to 11% last year. Asking rents in new projects soared 27% year-over-year to $92.38 per sq. ft.—a new record.

Starter Homes Are Now 70 Years Old—Why First-Time Buyers Are Choosing Fixer-Uppers Instead link

• Median prices for new homes under 1,500 sq. ft. hit $320,000 in April 2025, up from $310,000 in 2019—pricing many first-time buyers out of new builds. Many are now turning to older homes under $300K that are smaller but more affordable.

• Roughly 70% of existing homes are under 2,000 sq. ft., and many under 1,500—making them the new default “starter” home despite age. Buyers prefer bigger lots, character, and less maintenance than new builds offer.

• A 70-year-old Syracuse fixer-upper listed at $129,900 sold for nearly $50,000 over asking in a week. Agents say well-priced older homes under $300K are flying off the market, even with outdated interiors.

Industrial leasing booms in NYC—rents drop 8% as Class A space sits empty link

• Leasing velocity surged to 1.5 million sq. ft. in Q2—an 82.5% increase over the three-year median—driven largely by small- and mid-size tenants like Spectrum and the NYC DOT.

• Rents dropped 8% to $29.34/sq. ft. as cheaper inventory hit the market, especially in Queens and Brooklyn, raising concerns about oversupply and pricing pressure.

• Class A industrial space is at 23.6% availability, and with 1.4 million sq. ft. still under construction, CBRE warns new deliveries could worsen the glut.

Tool of the day - Turbohome

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These Digital Tools Are Quietly Reshaping CRE Investing – link

AI-driven platforms are helping investors underwrite faster, find off-market deals, and automate portfolio tracking — giving early adopters a sharp competitive edge.

3 Real Estate Niches Where AI Is Already Delivering Returns – link

Morgan Stanley highlights logistics, data centers, and CRE underwriting as AI-led sectors seeing tangible ROI — proving the tech’s value beyond speculation.

Predictive AI Maintenance Is Becoming a Must-Have for Building Owners – link

Landlords are adopting AI tools that forecast equipment failures before they happen — cutting downtime, repair costs, and tenant complaints.

The Future of AI in Appraisals Is Closer Than You Think – link

AI is reshaping valuation standards by analyzing comps, market trends, and property data at scale — pushing the industry toward faster, more consistent appraisals.

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