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From sheer jubilation to fears that a 50-basis-point cut in interest rates could portend a weakening economy, real estate had a lot to say about the Federal Reserve's latest move. The rate cut is welcome news for many sectors of the economy, and particularly for the real estate industry. If this initial cut is followed by additional cuts, and if we avoid a recession or other economic disruption, we will very likely see activity in 2025 that brings more supply to both the single-family and multifamily housing market. This will, in turn, help keep down single-family home prices and multifamily rents, helping the Fed get to its 2% inflation target. Shelter costs are a full one-third of the measure of inflation and high interest rates have helped to keep housing costs high in the past several years. While interest rates are not the only force affecting investment in the commercial real estate industry, this reduction is a positive move that will begin to reduce uncertainty and position owners and investors to meet long-term demand trends. Lower borrowing costs combined with a steady economic environment in the near- and mid-term will likely significantly increase investment activity, enabling industrial real estate developers to advance new facilities that have not been viable in the past two years based on the cost of financing. At the same time, lower rates could enable property owners to reinvest in existing facilities through additions, expansions or upgrades. This rate reduction and the signal that additional cuts may follow send a powerful positive message to real estate investors and developers. While there are a host of different forces affecting residential investment, from burdensome regulations to high insurance costs, the demand for new multifamily product continues to grow, and a more accommodative rate environment will significantly increase investment activity in 2025. #cre #Commercialrealestateadviser #creinvesting #crelending #commercialrealestate

🔥 Real Estate Markets: Economic Influences 🔥 Read full blog: https://lnkd.in/gWmqgiHh https://lnkd.in/gfRyamvb For those of us invested in the real estate market, understanding economic indicators is crucial. These indicators do more than reflect the economy's health—they directly influence local real estate markets. Let's dive into how you can analyze these trends to make well-informed property investment decisions. Key Economic Indicators and Their Impact on Real Estate ● GDP Growth: A robust GDP often signals a strong economy, which can bolster real estate demand. When the economy thrives, individuals and businesses are more likely to buy and invest in property. ● Employment Rates: Job stability increases housing demand. Areas with high employment rates usually see more people buying homes, as they have the financial stability to do so. ● Interest Rates: The cost of borrowing is critical in real estate. Lower interest rates make mortgages more affordable, encouraging buying and stimulating the market. ● Consumer Confidence: High confidence means people are more likely to make significant purchases like homes. This is a vital indicator of potential real estate growth. ● Inflation Rates: While high inflation can decrease purchasing power, real estate can serve as a protective investment since property values and rents may increase with inflation. Local Market Data Analysis To apply broader economic trends to the local level, focus on specific real estate data: ● Home Price Trends: Changes in home prices can indicate the local market's health and help predict future trends. ● Rental Market Conditions: The strength of the rental market can signal underlying real estate market conditions. Strong rental demand usually precedes an increase in property buying. ● Construction Activity: Increases in building permits and new constructions often suggest a growing market. ● Foreclosure Rates: A high rate of foreclosures might indicate economic stress in the local market, potentially driving property values down. Regional Factors Influencing Real Estate ● Local Industries: Thriving local industries can drive real estate demand by attracting a workforce that needs housing. ● Government Policies: Policies such as tax incentives for homebuyers or zoning laws can greatly affect property values. ● Demographic Trends: Changes in the local population, such as an influx of young professionals, can influence the types of housing in demand. Using Economic Insights for Real Estate Decisions By correlating economic indicators with real estate data, you can forecast market trends. For instance, if employment is increasing along with home sales, the market is likely robust and will continue to grow. Conclusion READ BLOG FOR FULL STORY

Is the Housing Market Stuck? Here’s Why You Can’t Afford to Be The U.S. real estate market is facing an unusual situation—it appears to be at a standstill. Despite deliberate reductions in interest rates, real estate activity has not gained momentum as expected. The Wall Street Journal even commented that the anticipated market revival “ended before it started.” Both buyers and sellers often wait for optimal conditions before participating in the real estate market, which is understandable. However, it’s crucial to emphasize this point: investors cannot afford to delay. Time is a critical factor in real estate investing, and waiting passively—even in an inactive market—can mean missed opportunities. Projections suggest it could take until 2026, or beyond, for the market to stabilize, but savvy investors understand that waiting is not a luxury they can afford. While many aim to “time the market” perfectly, experienced rental property investors know that “time in the market” is far more critical. The longer investments are held, the greater the potential for passive income and property appreciation. Five Strategies for Investors in a Sluggish Market In a slow-moving real estate market, how can investors continue to make progress? Here are five actionable steps: Analyze Your Portfolio Start by thoroughly reviewing your existing assets. Whether you’re an active or passive investor, it’s essential to ensure your portfolio aligns with your long-term goals and remains efficient and profitable. Awareness is key to making informed decisions. Key metrics for evaluation include: Net Operating Income (NOI): The income generated after operating expenses. Identify ways to improve NOI by increasing revenue or reducing costs. Cash Flow Analysis: Evaluate cash flow after all expenses, including debt service and taxes, to measure wealth-building potential. Return on Investment (ROI): Consider both cash-on-cash returns and total ROI, factoring in appreciation and tax benefits. Cap Rate: This helps compare the expected rate of return on properties. Debt-to-Equity Ratio: Assess leverage and financial stability by analyzing the ratio of debt to equity. Vacancy and Occupancy Rates: High occupancy rates indicate stability, while vacancy rates signal potential property or market issues. Appreciation and Equity Growth: Monitor long-term property value trends. Operating Expense Ratios: Identify whether operating costs are eating into profits. Tax Efficiency: Ensure you’re maximizing benefits like depreciation and interest deductions. Diversification: Spreading investments across various markets and asset types reduces risk. Market Comparisons: Benchmark your portfolio against similar assets to stay competitive. Economic Sensitivity: Test how your portfolio would perform under changing market conditions. Exit Strategies: Assess your readiness to sell, refinance, or reposition assets when necessary.

Real Estate's Impact on the Economy by the Numbers: A State-by-State Analysis The housing sector is a significant contributor to gross domestic product (GDP) through construction, home sales, and renovations. 𝗪𝗵𝗮𝘁'𝘀 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝘁𝗼𝗽𝗶𝗰 𝘆𝗼𝘂'𝗱 𝗹𝗶𝗸𝗲 𝘂𝘀 𝘁𝗼 𝗰𝗼𝘃𝗲𝗿? 𝗖𝗼𝗺𝗺𝗲𝗻𝘁! @nardotrealtor

"𝐑𝐞𝐬𝐮𝐥𝐭𝐬 We find little evidence of direct pass-through from interest costs to rents. On average, we find that for every dollar increase in their mortgage interest costs, investors increase their rents by one cent (see Appendix A for detailed results). To put this effect in context, the median monthly interest payment for leveraged investors increased by around A$850 between April 2022 and January 2024.5 Our estimate suggests that this A$850 increase in interest costs would have raised rents by less than A$10 per month, or just over A$2 per week (Graph 5, left panel). This increase in rent equates to around 0.4 per cent of the median monthly rent in January 2024." (page 4) (words in bold in original) (references omitted) "𝐂𝐨𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘢𝘭𝘭, 𝘸𝘦 𝘧𝘪𝘯𝘥 𝘭𝘪𝘮𝘪𝘵𝘦𝘥 𝘦𝘷𝘪𝘥𝘦𝘯𝘤𝘦 𝘵𝘩𝘢𝘵 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘱𝘢𝘴𝘴-𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 𝘪𝘯 𝘵𝘩𝘦𝘪𝘳 𝘪𝘯𝘵𝘦𝘳𝘦𝘴𝘵 𝘤𝘰𝘴𝘵𝘴 𝘵𝘰 𝘵𝘩𝘦𝘪𝘳 𝘳𝘦𝘯𝘵𝘴. 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘤𝘰𝘯𝘴𝘪𝘴𝘵𝘦𝘯𝘵 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘴𝘵𝘢𝘯𝘥𝘢𝘳𝘥 𝘷𝘪𝘦𝘸 𝘵𝘩𝘢𝘵 𝘵𝘩𝘦 𝘭𝘦𝘷𝘦𝘭 𝘰𝘧 𝘩𝘰𝘶𝘴𝘪𝘯𝘨 𝘥𝘦𝘮𝘢𝘯𝘥 𝘳𝘦𝘭𝘢𝘵𝘪𝘷𝘦 𝘵𝘰 𝘵𝘩𝘦 𝘴𝘵𝘰𝘤𝘬 𝘰𝘧 𝘱𝘳𝘰𝘱𝘦𝘳𝘵𝘪𝘦𝘴 𝘢𝘷𝘢𝘪𝘭𝘢𝘣𝘭𝘦 𝘪𝘴 𝘵𝘩𝘦 𝘬𝘦𝘺 𝘥𝘳𝘪𝘷𝘦𝘳 𝘰𝘧 𝘳𝘦𝘯𝘵𝘴 (𝘏𝘶𝘯𝘵𝘦𝘳 2024). 𝘐𝘯𝘥𝘦𝘦𝘥, 𝘵𝘩𝘦 𝘙𝘉𝘈’𝘴 𝘢𝘴𝘴𝘦𝘴𝘴𝘮𝘦𝘯𝘵 𝘪𝘴 𝘵𝘩𝘢𝘵 𝘩𝘪𝘨𝘩 𝘳𝘦𝘯𝘵 𝘨𝘳𝘰𝘸𝘵𝘩 𝘪𝘯 𝘳𝘦𝘤𝘦𝘯𝘵 𝘺𝘦𝘢𝘳𝘴 𝘳𝘦𝘧𝘭𝘦𝘤𝘵𝘴 𝘵𝘩𝘪𝘴 𝘧𝘶𝘯𝘥𝘢𝘮𝘦𝘯𝘵𝘢𝘭 𝘧𝘰𝘳𝘤𝘦. Housing demand has been strong, supported by high population growth and increased preference for more space, while supply has been hampered by ongoing capacity constraints and increases in construction costs." (page 5) (words in bold in original, emphasis using italics added) Declan Twohig, Anirudh Yadav and Jonathan Hambur, Do Housing Investors Pass-through Changes in their Interest Costs to Rents?, 17 October 2024, https://lnkd.in/gHsQB46z, in Reserve Bank of Australia Bulletin—Insights into the economy and financial system from teams throughout the Reserve Bank of Australia, 17 October 2024, https://lnkd.in/gHR6DJ4a

If you're a homeowner, you may not feel richer, but you might be surprised to know that your personal wealth has likely surged thanks to soaring property values. Despite a cost of living crunch and higher interest rates, national home prices have somehow ploughed on over the last year and a bit. CoreLogic says home values nationally are up $71,832 since January 2023 – a jump of 10.2% in just 14 months – which averages out to an increase of $5,130 per month. To put that into perspective, last financial year the average full-time Australian worker earned $6,565 per month after tax. The exciting thing about home equity is that it’s not just a number on a page. It can be a valuable resource that helps you forge ahead financially So if you’d like to make your home equity work harder, call me today for a clearer picture of how much equity you have – and how you can tap into it to potentially grow your wealth. Jovana@financia.com.au 0414894147

Do property investors just pass on their higher interest rate costs onto tenants? Spoiler alert, no. I've seen some data on this, and it's clearly evidenced that during the last historic rise in interest rates, investors didn't and indeed couldn't, pass on ALL of their increased costs onto tenants. The Reserve Bank of Australia just released an academic paper analysing this question. Their conclusion? "Overall, we find limited evidence that investors pass-through changes in their interest costs to their rents." They go even further in crunching the numbers: "We find little evidence of direct pass-through from interest costs to rents. On average, we find that for every dollar increase in their mortgage interest costs, investors increase their rents by one cent. To put this effect in context, the median monthly interest payment for leveraged investors increased by around $850 between April 2022 and January 2024. Our estimate suggests that this $850 increase in interest costs would have raised rents by less than $10 per month, or just over $2 per week (Graph 5, left panel). This increase in rent equates to around 0.4 per cent of the median monthly rent in January 2024." Hopefully we can now put this idea to bed. #propertyinvesting #rents #propertymanagement #realestate #mcgqs

🏡📰 Property prices have been soaring while wages struggle to keep up, creating a significant gap that is only expected to widen. According to a recent article from The Sydney Morning Herald, home prices have risen much faster than wages over the long term, leaving many potential buyers struggling to afford a home. This trend is concerning for both current homeowners and those looking to enter the market. To learn more about this issue and its potential impact on the real estate market, click the link below to read the full story. Don't forget to connect with us for more up-to-date real estate news! 📚🔗 Read the full story here: [insert link] Connect with us for more up-to-date Real Estate News! 📰🏠

Real Estate's Impact on the Economy by the Numbers: A State-by-State Analysis The housing sector not only provides shelter—a basic human need—but also plays an integral role in both global and local economic growth. Beyond its primary function, the housing sector initiates a series of activities that propel economic growth. Specifically, the housing sector is a significant contributor to gross domestic product (GDP) through construction, home sales, and renovations. While these activities require labor and materials, they also stimulate production and job creation across multiple industries, including construction, manufacturing, and retail. Furthermore, home purchases, particularly older ones, typically trigger additional consumer expenditures. These new homeowners often invest in home improvement projects, furniture, appliances, and services to personalize and update their living spaces. However, the economic impact of the housing sector extends even further. The construction of new homes and the renovation of existing ones require labor, creating a wide range of jobs, from architects and builders to interior designers. Moreover, the real estate sector—encompassing agents, brokers, and mortgage lenders—also employs a significant number of professionals. The ripple effects of a booming housing market, therefore, can be substantial in reducing unemployment and boosting people’s income. To better understand the housing market's importance to the local economy, the National Association of REALTORS® computes the income generated from each home sale, considering the activities mentioned above, for each state. https://lnkd.in/gWuq9fvv

Top 10 Housing Markets In The US The Housing Market is TIGHT and the supply of homes is even tighter. Check out this list of real estate markets that were graded on AFFORDABILITY and VALUE. CNBC took a look at price appreciation and seller gains, as well as affordability, inventory, and housing starts. They also ensured to add signs of stress like foreclosure activity and underwater mortgages in their grading.   Comment Below With What Market You Are In!   10. Delaware Appreciation: 4.73% Inventory (July): 2 months Affordability score (0 to 2, with 2 being most affordable): 0.56 Effective property tax rate: 0.43% Median sales price: $360,700   9. Indiana Appreciation: 8.02% Inventory (July): 2 months Affordability score: 0.81 Effective property tax rate: 0.86% Median sales price: $265,300   8. Georgia Appreciation: 7.16% Inventory (July): 3 months Affordability score: 0.59 Effective property tax rate: 0.82% Median sales price: $385,600   7. Tennessee Appreciation: 6.24% Inventory (July): 3 months Affordability score: 0.49 Effective property tax rate: 0.44% Median sales price: $393,000   6. Nevada Appreciation: 3.39% Inventory (July): 2 months Affordability score: 0.43% Effective property tax rate: 0.48% Median sales price: $458,300   5. New Jersey Appreciation: 11.38% Inventory (July): 2 months Affordability score: 0.56 Effective property tax rate: 1.64% Median sales price: $532,400   4. North Carolina Appreciation: 6.98% Inventory (July): 2 months Affordability score: 0.52 Effective property tax rate: 0.6% Median sales price: $383,700   3. Arizona Appreciation: 6.63% Inventory (July): 3 months Affordability score: 0.44 Effective property tax rate: 0.41% Median sales price: $450,800   2. South Carolina Appreciation: 9.42% Inventory (July): 3 months Affordability score: 0.61 Effective property tax rate: 0.5% Median sales price: $387,700   1. Florida Appreciation: 6.85% Inventory (July): 4 months Affordability score: 0.44 Effective property tax rate: 0.76% Median sales price: $420,100   Link to article: https://lnkd.in/egTgFeG9   #HousingMarket #RealEstate #HomeBuying #Mortgage