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Multifamily is the most favored investment sector among global investors in 2024

Plus, Housing Markets Most at Risk for a Price Correction and 6 more RE insights

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A Quote

“Somebody once told me the definition of hell: On your last day on earth, the person you became will meet the person you could have become.”

― Unknown

Today’s Rates

Macro Trends

Weekly Housing Trends —Data Week Ending March 16, 2024 link

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  • The pace of new home listings surged by 17.8% from last year, offering more options for buyers in the spring homebuying season. This marks the highest year-over-year growth rate in new listings since May 2021, indicating a significant increase in seller activity.

  • Median listing prices remained stable compared to last year, with a recent trend of price reductions. The inventory share of homes with price reductions in February increased by 1.4 percentage points year-over-year, suggesting sellers are adjusting prices to stay competitive.

  • Active housing inventory is up 23.8% from the previous year, but homes are still selling relatively quickly. Homes spent two days less on the market compared to last year, demonstrating continued high demand amidst the growing inventory.

Real Estate Trends

Multifamily is the most favored investment sector among global investors in 2024 link

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  • Multifamily real estate remains the most favored investment sector among global investors in 2024, with 42% of the survey respondents indicating their preference. This marks the first time multifamily has been the top choice in all major global regions (Americas, Europe, and Asia-Pacific).

  • Despite challenges such as high interest rates and tight credit availability, investor sentiment remains positive. Nearly 60% of investors expect small or no price discounts for multifamily assets this year, reflecting confidence in the sector's resilience.

  • The shift towards more conservative investment strategies is evident, with 47% of multifamily investors now favoring high-risk strategies, down from 50% in 2023. There is a notable increase in preference for lower-risk strategies, from 27% to 33% of respondents, signaling a cautious approach amidst market uncertainties.

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Since COVID, Apartment Rents Have Grown Least in West Region link

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  • Since the pandemic, the West region has seen the slowest rent growth in the U.S., with a 20% increase from $1,831 in February 2020 to $2,204 in February 2024. This growth is significantly lower compared to the national average increase of 25.5%.

  • In a surprising turn, as of February 2024, the Northeast has become the priciest region for apartment rents, overtaking the West with average rents at $2,221 versus the West's $2,204. This marks the first time since mid-2015 that the West's rents have fallen below the Northeast's.

  • Despite the lower overall rent growth, the West still leads in rent per square foot (RPSF), charging $2.53 as of February 2024, the highest among all regions. This is attributed to the West having the smallest average apartment unit size at about 871 square feet, compared to the Northeast's 911 square feet and a national average unit size of about 909 square feet.

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Off Topic

A Map of Global Happiness By Country in 2024

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Something I found Interesting

10 Cities and States that will Pay You to Move There  link

  • In the era of remote work, cities and states offer innovative incentives to attract new residents. These incentives include tax breaks, cash bonuses reaching up to five figures, free recreational equipment, or down payment assistance.

  • Remote workers are the primary target for these relocation incentives. However, certain states also provide financial incentives for individuals taking up local, in-person job opportunities.

  • Among the locations offering incentives are three states: Alaska, West Virginia, Vermont, and seven cities including Hamilton, Ohio; Lincoln, Kansas; Newton, Iowa; Rochester, New York; The Shoals area in Alabama; Topeka, Kansas; and Tulsa, Oklahoma.

Location Specific

Salinas, CA Rent Growth Ranks Among Top in Nation link

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  • Salinas, California, saw a significant rent increase of 7.1% year-over-year as of February, placing it third nationally for rent growth. This contrasts sharply with the national average, which was nearly stagnant at 0.2%.

  • Despite a slight decline in occupancy, down 60 basis points year-over-year to 96.8%, Salinas's rental market remains strong. This is due in part to the extremely limited supply, with virtually no new units being developed as of the end of 2023.

  • Salinas remains an affordable option in the Bay Area, with average rents at $2,460, substantially lower than San Francisco ($3,243) and San Jose ($3,051). This affordability, combined with robust rent growth, underscores its unique position in the rental market landscape.

Pro Member Only Content Below

These Are the Housing Markets Most at Risk for a Price Correction 

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Yesterday Was A Good Day for Industrial Real Estate 

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The Best Time to List a Home in 2024.

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That's all, folks.

Cheers,

Vidit

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