7 Home Types Expected to Gain Value

Good morning, Dwellers! Welcome to another edition of Dwellings Digest, a realtor and investor driven newsletter simplifying real estate, exploring the economy-stock-real estate link, adding a fun twist with niche topics and more. Enjoy!

Quote of the day - “Amid economic shifts, where labor markets tighten and inflation fears rise, real estate decisions—whether driven by affordability, investment, or sustainability—reflect a careful balance of opportunity and caution”

In today’s edition - November's job openings increased by 259,000, signaling steady labor demand, while hiring eased. In real estate, affordability challenges persist with rising mortgage payments, but several counties show improvements. Luxury homes and eco-friendly properties are expected to see value increases by 2025, while home flipping profits continue to drive regional markets. "The shifting economic landscape is influencing real estate decisions, from affordability concerns to luxury investments." Stay informed with today’s key market insights.

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Rates & Stocks

Average going rates as of Jan 7 2024

Numbers as of Jan 7 2024 closing

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🏛️ Economic & Market Sentiment

US labor market stable as job openings rise, hiring eases in November 

• Job Openings Rise Unexpectedly: November saw an increase of 259,000 job openings, bringing the total to 8.098 million, up from 7.839 million in October. The job openings-to-unemployed ratio edged up to 1.13, reflecting steady labor demand despite economic uncertainty.

• Hiring and Quitting Decline: Hiring dropped by 125,000 to 5.269 million, with notable declines in professional services and manufacturing. Quits fell by 218,000, signaling worker caution and easing wage pressures, critical for inflation trends.

• Layoffs Remain Low Amid Tariff Concerns: Layoffs stayed steady at 1.765 million, though job cuts in accommodation and food services rose by 102,000. Businesses across sectors are wary of potential tariff policies, leading to stockpiling and pricing uncertainties.

Nasdaq Drops 1.9% as Inflation Fears Mount

• Markets React to Robust Economic Data: The S&P 500 fell 1.11%, the Nasdaq dropped 1.89%, and the Dow declined 0.42% after reports showed job openings surged and services sector activity accelerated, fueling inflation fears.

• Bond Yields Surge, Pressuring Tech Stocks: Benchmark 10-year Treasury yields hit 4.677%, their highest in eight months, prompting sell-offs in technology stocks. Notably, Nvidia shares fell sharply, while Micron Technology gained on AI-related news.

• Fed Rate Cut Expectations Shift: Resilient economic indicators pushed traders to anticipate the next Fed rate cut in June 2025, delaying hopes for monetary easing amid persistent inflation risks tied to strong growth and potential tariffs.

🎢 Impact on Real Estate

Top 10 Counties with the Largest Quarterly Increase in Affordability Indexes in Q4 2024

• Affordability Challenges Persist: Median-priced homes consumed 34% of average wages in Q4 2024, exceeding the preferred 28% lender guideline, highlighting continued affordability pressures nationwide.

• Top 10 Counties with Rising Affordability: Mercer County, PA, leads with a Q4 Index of 86, improving from Q3's 107, while Grayson County, TX, and Mobile County, AL, show notable shifts despite historical affordability struggles.

• Historical Context: Since early 2021, affordability has sharply declined, with 98.2% of counties in Q4 2024 less affordable than historical norms, driven by a 6%+ mortgage rate environment and a median home price of $364,750.

Q4 2024 Home Affordability Report: Top 10 Counties with Index Improvements

🎙️ RE Spotlight

7 Types of Homes Expected To Soar in Value by the End of 2025

• Historic and Unique Homes: Demand for centrally-located, one-of-a-kind homes is expected to rise significantly, driven by their limited supply and high desirability. Owners of these properties could see values increase 5-10% annually over the next few years.

• Eco-Friendly and Sustainable Homes: As younger, eco-conscious buyers dominate the market, homes featuring carbon-neutral designs, passive solar technology, and sustainable materials may see values climb 5-8% annually, especially as affordability and environmental priorities merge.

• Multifamily and ADU-Equipped Homes: Multifamily units and properties with accessory dwelling units (ADUs) are in high demand for their income potential and affordability. Multifamily properties in urban hubs could grow 10-15% annually, while ADU-equipped homes will likely see strong appreciation as rental trends continue.

Rise of the ‘She-Elites’: Wealthy Women Emerge as Luxury Real Estate Market Leaders

• Women Driving Luxury Home Purchases: Women with a net worth of $5M+ now own 15.2% of high-priced residential properties, with millennials and Gen Z women making up 54% of luxury homeowners under 35. Married women increasingly dominate the decision-making process for high-end purchases.

• Single Women Gaining Market Influence: Single women homebuyers accounted for 20% of purchases in 2024, more than double the rate of single men (8%). These buyers, often free from child-rearing expenses, are investing in luxury vacation homes and income properties.

• Wealth Transfer and Future Growth: By 2030, women are expected to control the majority of the $30 trillion in assets held by baby boomers, positioning them as key players in the thriving luxury real estate market.

She-Elites: How Wealthy Women Are Shaping the U.S. Luxury Real Estate Market

🏕️ Niche-RE

Top 10 Counties with Highest Home Flipping Profit

• Decline in Flipping Activity: Home flipping represented 7.2% of all U.S. home sales in Q3 2024, a slight decline from 7.6% in Q2, reflecting seasonal shifts in the housing market.

• Gross Profits Under Pressure: Typical gross profit on flipped homes fell to $70,000, down $5,000 from Q2 and $10,000 from its peak two years ago, but remained slightly higher than Q3 2023.

• Top Profitable Markets: Queen Anne’s County, MD, led with a staggering $373,222 gross profit, followed by Wasatch County, UT, at $351,250, and Pitkin County, CO, at $350,000—highlighting premium opportunities in select regions.

Top Counties for Home Flipping Profits in Q3 2024

C-Store Growth Trends: Top Regional Performers in 2024

• Steady Post-Pandemic Traffic: C-store visits in November 2024 were 16.1% higher than pre-pandemic levels in November 2019, showcasing lasting consumer demand, despite a 0.9% YoY decline in November 2024 traffic.

• Chain Leaders Drive Growth: Top-performing chains like Circle K, Kwik Trip, Maverik, and Wawa continue to outpace the sector, bolstered by aggressive expansions and strategic acquisitions, such as Maverik’s Kum & Go rebranding.

• Regional Traffic Insights: Regional demand for c-stores remains strong, with Maverik dominating the Southwest, Kwik Trip excelling in the Midwest, and Wawa thriving in Florida and the Mid-Atlantic—highlighting opportunities for tailored regional strategies.

Convenience-Store Visits Well-Positioned For a Strong 2025 

Self Storage in 2024: Challenges, Resilience, and What’s Ahead for 2025

• Softening Fundamentals in 2024: Self storage street rates dropped 3.5% YoY to $16.55 per square foot in September, with occupancy and rent growth also declining due to reduced housing mobility caused by high interest rates.

• Overbuilding Challenges: A wave of post-pandemic developments led to oversaturation in some markets, pushing rents down and creating stress on newer projects. Experts anticipate distressed assets could rise in 2025.

• 2025 Outlook – Resilience and Recovery: Declining interest rates may reignite investment activity, with major institutional investors preparing to deploy capital. Stabilized occupancy, higher rental rates, and a strong lease-up season could restore momentum to this recession-resistant asset class.

How Will Self Storage Perform in 2025?

🖼️ Chart-Tastic

🌍 Interesting in Social

And…that's a wrap on this edition!

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