Choose your path
Federal Reserve Chair, Jerome Powell, told a bi-partisan group of legislators July 14 that it is too early to pull back on the central bank’s support of the U.S. economy, noting that substantial further progress is a ways off, Bloomberg reported. Powell acknowledged that inflation has increased faster than expected, but overall economic progress is being made.
Market sentiment concerning commercial real estate has significantly improved since June 2020, reaching a level of optimism not seen in six years, according to the National Market Sentiment Survey from consulting firm RCLCO, MBA NewsLink reported July 12. Three-quarters of respondents said they believe real estate conditions will improve during the next 12 months, but they were less sure about cap rate performance.
Remote work & mobility and how it affects commercial buildings was named the most significant issue affecting real estate, the Counselors of Real Estate reported June 23 in its report 2021-2022 Top Ten Issues Affecting Real Estate. Other major issues: technology acceleration and innovation and environmental, social, and governance initiatives.
The average price per square foot in all commercial real estate asset classes held steady in June, which suggests that market growth will stay on a consistent trajectory and continue to recover during the second half of the year, commercial real estate firm Crexi reported July 12. The average asking price in June was down just 1.52% compared with May.
The retail real estate sector has captured an 11% share of transaction volume so far this year, nearly where volume was before the coronavirus pandemic caused a worldwide lockdown in March 2020, according to commercial real estate firm JLL, MBA NewsLink reported July 12. Investor interest is returning to the sector now that consumers are returning to the stores.
Apartment property prices accelerated in June, increasing 10.1% from the same point a year ago and overtaking the hot industrial sector, which grew 9.5% during the same period, according to data firm Real Capital Analytics, MBA NewsLink reported July 13. The apartment sector has seen the greatest amount of sales activity this year.
The high price of building materials has led to decreased residential construction activity in many Fed districts, according to the latest Beige Book released by the Federal Reserve on July 14. Commercial activity was mixed, but up slightly on balance.
So-called urban flight is a myth, with housing prices and sales in urban areas reaching pre-pandemic levels as of May, Freddie Mac reported in a study released July 12. The coronavirus pandemic accelerated the existing migration out of big cities, but it didn’t create an exodus. Now, buyer demand is shifting to urban areas in more affordable cities.
Home sales fell 1.2% between May and June, marking the largest May-to-June drop since at least 2012, online real estate marketplace Redfin reported July 15. Despite the overall sales drop, homes still sold at a record pace and for record prices.
Demand for vacation homes in June was down 11.1% from the same point a year ago, possibly marking the end of the pandemic-driven surge in second-home purchases, online real estate marketplace Redfin reported July 14. This decline in vacation-home sales is the first since April 2020, and it comes after months of double- and triple-digit increases in the demand for second mortgages.
Pop up content here.