CRE Rising: 20 Metro Areas to Watch in 2024
Plus, a look at a California real estate Ponzi scam, the astonishing rise of e-commerce facilities, and a look at industrial optimism in The Windy City.
Welcome to today's edition of Unreal Assets, where we spotlight the latest insights and must-read stories in the commercial real estate landscape.
In our lead story, CoreLogic's 2024 forecast shines a light on twenty metro areas poised for growth, offering invaluable information for discerning investors and market participants.
We’ll also take you into the dark underbelly of a California real estate Ponzi scam, examine the explosive growth of e-commerce facilities, and capture a snapshot of industrial optimism sweeping through Chicago, as well as cover all of the other stories you (should have) read yesterday.
CORELOGIC’S 2024 REAL ESTATE FORECAST
Industry observers, investors, and potential homebuyers are keeping a close eye on CoreLogic's latest predictions., with these 20 metro areas likely to see significant gains this year.
With mortgage rates expected to stabilize and these metro areas poised for significant appreciation, we might finally be seeing an uptick in the overall health of American commercial real estate markets.
Steady Mortgage Rates, Slowing Home Price Appreciation Predicted
🏡 Price Persistence: Despite a year that saw mortgage rates hitting a 23-year peak, CoreLogic's chief economist Selma Hepp projects continued growth in home prices. A forecasted year-over-year increase of 2.5% suggests that the climb in property values isn't over just yet.
🔍 Inventory Intrigue: While newly built homes promise some relief to tight inventory levels, it seems unlikely they will fully satisfy the pent-up demand from prospective buyers. This imbalance keeps the upward pressure on prices, challenging those waiting for a market cooldown.
⚖️ Rate Predictions: Although homeownership dreams persist, many are wary of mortgage rates. Hepp indicates a potential slight uptick early in the year but also hints at possible rate cuts by the Fed if inflation remains under control—a scenario that could lead to more favorable borrowing terms later on.
🌐 Affordability Exodus: Buyers are being drawn to regions offering affordable living and job growth—factors contributing to higher real estate appreciation in these areas. The post-pandemic recovery has spotlighted certain metros as hotspots for both investors and residents.
💰 Metro Movers: CoreLogic's data highlights twenty metro areas with promising real estate prospects, while also flagging five metros that may see price declines in 2024.
👀Looking Ahead: As CoreLogic's analysis suggests, real estate market participants can expect continued price appreciation in 2024, with a forecasted average increase of 2.5% across the US. While mortgage rates are predicted to remain relatively stable, the persistent low inventory and high demand will likely keep home values on an upward trajectory, particularly in metro areas that offer affordability and job growth.
Links of the Day
🧑🏫️Our Picks
Commercial Comeback: 🌐 Global real estate market eyes revival with deals on the rise and debt maturity pressures pushing $570 billion equity needs.
Buyer's Market Emerges in NYC: 🤝 Discounts deepen to 4.2% amid high mortgage rates, but spring could bring a seller's rebound.
Decades of Deception: 🕰️ California scammer pleads guilty to swindling investors in a $24M real estate Ponzi scheme that preyed on the retired and elderly.
Midtown's Moral Gamble: 🚫 Over 800 residents voice opposition to Stefan Soloviev's proposed casino, fearing exploitation and the lure of "blood money" at a contentious community meeting.
🏭Industrial
New Heights in Distribution: 📈 As e-commerce thrives, multistory warehouses expand, promising proximity to bustling city populations.
Industrial optimism in the Windy City: 🌬️ Chicago's market experts anticipate a smoother 2024 after last year's challenges, focusing on strategic development and tenant demand.
Prologis poised for profit: 🏗️ Industrial REIT giant set for Q4 earnings reveal with a forecasted 12.19% revenue jump amid robust real estate demand.
👪 Multifamily
Hotlanta heats up housing buzz: 🔥 Atlanta sizzles as RentCafe's most-watched city for rentals, dominating the charts with unmatched online interactions and search saves in 2023.
Crisis in The Windy City: 🌆 With soaring rents and scarce supply, Chicago faces an uphill battle against a 120,000-unit affordable housing deficit – a challenge calling for urgent action.
🏷 Retail
Brick Beats Click: 🏬 Celebrating the shapers of retail's revival—submit nominations for Globe St.'s retail real estate recognition by Feb 7
Outdoor Appeal: 🌳 Shoppers' love for fresh air drives retail giants to strip centers, spelling more woes for traditional malls.
💼 Office
Vacancy crisis peaks: 📊 Record-high office vacancies contribute to a spike in loan delinquencies, raising alarms across the commercial real estate world.
Q4 Commercial Mortgage Stress: 🏢 Office property loan delinquencies leap to 6.5%, signaling turbulence in the commercial real estate sector.
🛍Grab Bag
Neumann's New Gamble: 🏗️ Adam Neumann's venture into apartment buildings with Flow faces headwinds as interest rates climb and cash shortages loom, putting investor returns at risk.
Space Available: 🚀 Glassdoor & Waystar propel 63k sf of office space onto Fulton Market's secondary lease listings as remote work reshapes demand.
Retail Wreck: 🛍️ SF's prime shopping destination, San Francisco Centre, sees its worth crumble by $1 billion as occupancy dives and lenders push for property sale.
📊Daily Data Visualization
We all know that it has not exactly been a great year for real estate agents. NAR, the industry’s largest trade group, lost a massive $1.78 billion lawsuit brought by plaintiffs in Missouri, Kansas, and Illinois for allegedly conspiring to artificially inflate commissions for home sales.
Not soon after, NAR CEO Bob Goldberg announced his resignation amid the fallout from the lawsuit and a harassment scandal. We’re already seeing the blowback from these events, with agents across the country beginning to leave the group.
New data shows an industry in flux, with agents moving from brokerage to brokerage at a steadily rising rate.
The Agent Movement Index from Relitix indicates that following several years of decreasing transitions among brokerages, there was a noticeable stabilization in early autumn of 2023, with a subsequent uptick in real estate agent transfers as we head into 2024.
Rob Keefe, the founder and president of Relitix, has affirmed that the period of decline in agent movement has come to an end. He predicts an uptick in agents transitioning between brokerages starting in 2024 as the market starts to stabilize.
Despite this anticipated increase in movement, he notes that due to a reduction in the active agent count from its high point towards the end of 2022, there will be fewer seasoned agents available for recruitment compared to previous years.
For December, the Agent Movement Index (AMI) stood at 70.4 with an adjustment for seasonal factors bringing it to 92.2. Meanwhile, November's figures were corrected upwards, ending at 81.2 and 91.6 after adjustments.
The pattern of experienced real estate agents switching brokerages is a critical factor for leaders managing brokerages and franchises to consider. The degree of this movement varies seasonally and also shows long-term shifts. 2024 is likely to bring a massive shift in how we buy and sell properties, both residential and commercial.
That’s all for today, but we’ll be back tomorrow with your daily dose of the commercial real estate stories you need to read. See you soon.
