- America Faces a Housing Bust “America’s housing market still had a lot going for it at the start of this year. It wasn’t enough to surmount a doubling in mortgage rates in combination with persistently high prices. The National Association of Realtors’ measure of home affordability, based on mortgage rates, home prices and household income, showed that as of April existing homes were at their least affordable level since July 2007. They are even less affordable now. On Tuesday, the NAR said the median price on an existing home rose to $407,600 in May from $395,500 in April, while Freddie Mac reported last week that the average rate on a 30-year fixed mortgage was 5.78%, up from 5.23% a week earlier and from an April average of 4.98%.” (The Wall Street Journal)
- Empty Wall Street Offices to Be Revived as Apartments “A venture of two New York developers has purchased a one-third empty office building in the city’s financial district with plans to convert it into apartments, one of the largest such conversion schemes to be launched during the pandemic. The venture, which includes Silverstein Properties and Metro Loft, has agreed to pay $180 million for the 30-story building that opened in 1967 and has housed numerous technology and financial-services tenants over the decades. The new owners plan to convert it into 571 market-rate apartments, ranging from studios to three bedrooms, during the next three to four years.” (The Wall Street Journal)
- Should Proptech Panic About Funding? “Seasoned real estate professionals tend to be relentlessly optimistic folk, having experienced the cyclical nature of the industry over long periods of time. Even in the face of current inflation spikes, rising interest rates, SPACs cratering, and a looming recession, they favor rose-colored glasses over sackcloth and ashes. No surprise then that a number of proptech entrepreneurs and venture capitalists, while not blind to the challenges of the U.S. and global economies, are taking a patient view of the macro economics and how they might affect the sector’s ability to raise capital and grow companies.” (Commercial Observer)
- Commercial Construction Starts, Plans Increase Despite Recession Warning Signs “CRE development is a long game, and developers don't see short-term headwinds like inflation and interest rates as any reason to stop building.” (Bisnow)
- Apartment Players Are ‘Holding Their Breath’ Despite Suring Rents “Even with the recent, steady rise in rents—by double-digits in many markets—that degree of revenue gains is unsustainable, apartment operator Mike Brewer, COO, RADCO Companies, Atlanta, recently said. That brings the focus to expenses. And there’s not a lot of hope that prices will come down, or even what might bring them down, commented a vice president for one leading apartment maintenance and construction distributor last week.” (GlobeSt.com)
- 4th Florida Property Insurance Company Has Gone Bankrupt “Nearly 80,000 Florida homeowners will have to find new insurance, after Southern Fidelity declared bankruptcy. The Tallahassee based company is the fourth insurer to declare insolvency since February. Southern Fidelity’s bankruptcy filing is concerning because, according to insurance agents, a large portion of those dropped customers will likely have to reinsure their homes using Citizens Property Insurance -- the state-owned property insurance company. Insurance agents say Citizens has ballooned as a private company, and just one hurricane could detrimentally affect homeowners across the state.” (News4Jax)
- Double Whammy Coming for LA Affordable Housing in Next 5 Years “A ‘double whammy’ is coming for the low-income housing inventory in Los Angeles as 11,000 affordable residences flip over to market-rate units.” (Bisnow)
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