So Cal Multifamily Sales Pulse - November 3, 2024 - November 9, 2024
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Here's What's Happening In The Market, Here’s What This Means For You
| Economic Indicators Remain Positive Despite Record Household Debt If people get too far out over their skis by borrowing too much money, the economy could hit a wall. |
CRE Posts Sizeable Gains in Q3 Sales volume for office and multifamily grew, unlike retail and industrial. |
| Freddie Mac and Fannie Mae See Higher Delinquency Rates in Q3 The change for Freddie Mac was moderate; Fannie Mae saw higher increases. |
Foreclosures Pick Up, Starting With The Largest Landlords As more loans approach maturity and liquidity returns to the market, foreclosure actions are on the rise. |
| Fed Cuts Haven’t Trickled Down To Real Estate. Some Investors Aren’t Waiting Home mortgage rates are rising and commercial debt rates are stagnant, hovering around 4% at the end of October. |
West Coast Cap Rates Fall Demand for well-located properties is rising, but inventory remains low. |
| Office, Multifamily Sectors Lead CRE’s Q3 Growth U.S. CRE enjoyed a notable Q3 recovery, thanks to higher sales volumes in office and multifamily, while industrial and hospitality were mixed. |
Multifamily Absorption Hits Second-Highest Level on Record However, apartment rents remain flat. |
| El-Erian Warns: Don't Expect Prices to Fall, Despite Cooling Inflation If they did, it could be a bigger economic problem than people realize. |
CMBS Delinquency Rate Nears 6% The delinquency rate for office jumps by more than 100 basis points. |
| Politics Aside, the US Economy Is Holding Strong Real GDP will grow regardless of which party is in charge in D.C., writes economist Peter Linneman. |
Apartment Demand Rebounds, Vacancies Finally Fall After years of rising vacancies and record construction, apartment demand is growing—and it could grant landlords more pricing power by 2025. |
| Banks Expect More CRE Lending in 2025 as Rates Fall With interest rates falling, banks are eyeing a potential return to form for CRE lending in 2025 after two years of reduced activity. |
CRE Readies For Realignment As Trump Surges Back To White House Based on his tariffs, immigration position and tax cuts — those could potentially be inflationary pressures that the market clearly doesn't have. |
| Apartment Vacancy Dips As Demand For Rental Housing Outpaces Record Supply For the first time in more than two years, U.S. apartments are filling up again. |
California Proposition 33 Rent-Control Measure Defeated at the Polls It would have overturned the longstanding Costa-Hawkins law, which bars localities from capping rent on vacant units, single-family homes and apartments built after Feb. 1, 1995. |
| Fed Cuts Rates for 2nd Time Multifamily execs saw the move coming, but its impact may take time to emerge. |
USC Casden Forecast Calls for SoCal Rent Increases to Continue Forecast predicts rent increases for the next two years throughout the region. |
| Interest Rate Uncertainty Grows After Election Much depends on what a Trump White House does. |
CRE Loan Re-Defaults Hit Decade-High Levels "They are kicking the can down the road." |
| Banks Under Pressure as CRE Double Defaults Rise As “extend and pretend” loan modifications increase, U.S. banks face more exposure to defaults in their commercial real estate loans. |
Store Closures Surge, But Retail Demand Remains Strong U.S. store closures hit their highest level since 2020, driven by rising bankruptcies and operational pressures, yet demand is still high. |
| How Will Trump’s Victory Affect The Multifamily Industry? President-elect Donald Trump has said he aims to cut housing regulations and reduce mortgage rates, but details are scarce. |
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