RealEstateNews 7.22.24
Weekly News Roundup
- Migration Driving Real Estate
- Manhattan Office Rebounding
- Foreign Home Buyers Paying More
Migration Driving Real Estate
Many homeowners have decided to relocate, with a Stateline analysis of U.S. Census Bureau finding this month that a growing number of Americans are ditching cities for suburbs in search of lower taxes and more affordable real estate prices. There are places around the country where a home can be purchased for $250,000 to $300,000. For the younger generation we might see a lot of migration.
Some markets where homes are $200,000 or less include Lauderdale Lakes and Lauderhill, Florida, and others across the country, such as Akron, Ohio; Detroit; Rochester, New York; Niagara Falls, New York; Albany, Georgia; Lansing, Michigan; Rockford, Illinois; and Cleveland. Most homeowners say they are nearly twice as willing to sell their home if their mortgage rate is 5% or higher, one Zillow survey found. Currently, about 80% of mortgage holders have a rate below 5%.
Earlier this week, data from Redfin reported that the cost of buying a new house just hit another all-time high. The median U.S. home sale price soared to $397,954 in June — a nearly 5% increase from a year earlier and marking the highest level on record and the biggest annual increase since March. Available home supply also remains down a stunning 34.3% from the typical amount before the COVID-19 pandemic began in early 2020, according to a separate report published by Realtor.com. Source: Fox Business
Click below for YouTube commentary
Manhattan Office Rebounding
It’s becoming a little clearer which buildings and districts will survive New York’s office meltdown. Some pockets of the city are proving more resilient than others. Class A buildings built since 2000 have a lower-than-average 13% availability rate. The amount of empty space in Midtown is ticking down from recent peaks, particularly in the Plaza District. Asking rents in Hudson Yards, Greenwich Village and Chelsea were above their prepandemic averages in the second quarter of this year. Downtown isn’t faring as well, with emptier offices than the city average and falling rents.
Finding tenants remains a slog, though. Franklin Wallach, an executive managing director at Colliers, points out that Manhattan has been flooded with an additional 42.8 million square feet of office space since March 2020. This is about the size of the city’s financial district in lower Manhattan. The torrent of supply has pushed Manhattan’s office availability rate to 17.9% by the end of June, according to Colliers data—down a fraction from the 18.1% all-time-high recorded in the first quarter.
Converting old offices into residential properties, as is happening with the Flatiron Building, will nibble away at excess space. But demand for offices needs to pick up significantly to really make a dent in the availability rate. Tenants want top-notch properties as they encourage workers to return to the office. This means so-called Class A buildings are capturing more than their fair share of leasing activity. But having a portfolio of mostly shiny new towers isn’t as much of an advantage in New York as it would be in other major cities, where supply is tighter. Almost two-thirds of Manhattan’s total office stock is Class A, so companies looking for good-quality space are spoiled for choice. Source: Wall Street Journal
Click below for YouTube commentary
Foreign Home Buyers Paying More
High prices and limited supply are dulling foreign appetite for U.S. homes. International buyers still in the market are now paying more than ever. For the year that ended in March, foreign home buyers spent 20% more on a median home versus the period before, according to a report from the National Association of Realtors. Domestic home buyers spent only 2% more. Foreign buyers paid a record-high median price of $475,000, exceeding domestic buyers by roughly $80,000.
Canadians bought the largest share of homes among all foreign buyers at 13%. Many sought pricier homes in resort areas in states such as Florida, one reason why the median sale price was higher among foreign buyers. Chinese buyers, who ranked No. 1 the previous year, bought 45% fewer homes in the past year as the yuan weakened. They ranked second this year with 11% of foreign sales. Buyers from India, meanwhile, increased their purchases and were responsible for 10% of foreign sales. They spent around $700 million more than last year on U.S. home purchases. They also purchased some of the most expensive homes, at a median $625,000, drawn most often to Florida and Texas.
Foreign buying has always been a small share of the U.S. market, and it fell to 1.3% this year from 1.8%. But foreign buyers are concentrated in a handful of states, including Florida, California, Texas and Arizona, and their influence can be disproportionate to their number in certain cities there. In Los Angeles, demand is strong in pricey, historic neighborhoods such as Venice Beach and Hollywood Hills. They attract crowds of affluent international buyers, including many creatives and entertainers drawn to the coast and mountains, said Brian Ades, a real-estate agent in Beverly Hills. Source: Wall Street Journal
Click below for YouTube commentary
