Weekly News Roundup 1.29.24

Big Decline in Real Estate Transactions, but not Prices
City of Tomorrow on Ballot in California
Home Sales Lowest in Almost 30 Years

Big Decline in Real Estate Transactions, but not Prices

There was just $374 billion of real estate sold in the U.S. last year, according to MSCI data released Wednesday, a 51% fall compared with 2022. The deal tally was also 14% lower than in 2020. According to the RCA CPPI National All-Property Index, which tracks the value of property deals that closed, U.S. commercial real estate prices are only down 11% from peaks seen around the time the Federal Reserve began raising interest rates in early 2022.

Some real estate has certainly become a lot cheaper, but only the riskiest type. Offices in oversupplied central business hubs such as San Francisco have fallen 40% in value since March 2022. But e-commerce warehouses haven’t lost any value at all. Hotels have barely budged either. High interest rates haven’t triggered many of the distressed sales that pushed prices down in the years around the 2008 financial crisis. As economic growth has been healthy in the U.S., most tenants are still paying the rent. Source: Wall Street Journal

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City of Tomorrow on Ballot in California

In 2017 California Forever started quietly buying up low-grade farmland in an area of Solano County, located between San Francisco and Sacramento. Now the company has gone public, submitting a ballot initiative to the county to establish a new city. The $800 million venture encompasses over 18,000 acres. The initiative would give the company great flexibility with regards to planning and zoning in that new city, meaning they will basically be able to design it from scratch.

The city would explicitly be zoned to encourage dense housing, public transit, mixed-use development, and walkable streets. They don’t actually know what their city is going to look like. They’re not going to plan every building’s architecture, like some fancy subdivision; instead, they’re going to simply set the rules and allow private developers to build what they want, within those rules. Source: www.noahpinion.blog

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Home Sales Lowest in Almost 30 Years

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