Secret Mortgage Blacklist of 5,000 Condo Developments - Homeowners

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!

In today’s edition - Markets brace for Trump’s April 2 tariff hike, with “effective tariff rates” possibly reaching 50%. Despite economic uncertainty, U.S. housing starts jumped 11.2% in February 2025, signaling builder optimism. “Inventory growth is opening doors for savvy buyers this spring,” said Redfin’s Chief Economist. Meanwhile, condo sales collapse under Fannie Mae’s growing blacklist, and retirees flee high-tax states for affordable regions. Stay updated with expert insights on real estate trends, housing market shifts, and economic developments shaping today’s property landscape.

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Average going rates as of Mar 18 2025

Numbers as of Mar 18 2025 closing

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🏛️ Economic & Market Sentiment

Trump’s April 2 Tariff Deadline Looms: Markets Brace for Possible 50% “Effective Tariff Rate”

• Markets Brace for “Effective Tariff Rate” Up to 50%
  Trump’s April 2 tariff plan may deliver eye-popping rates — possibly up to 50%, according to Yardeni Research, as the White House calculates retaliatory tariffs by factoring in non-tariff barriers like VAT and other costs.

• Market Volatility Persists Ahead of Deadline
  The S&P 500 recovered 3% after a 10% drop, but Deutsche Bank’s Bankim Chadha warns of further declines unless tariff uncertainty is resolved. Trump’s unpredictability has already exceeded the economic toll of his first term in weeks.

• April 2 Called “Liberation Day” by Trump
  Trump brands the deadline as “Liberation Day for America,” promising to retaliate with up to 200% tariffs on EU wine and spirits, while eliminating many exemptions for industries like autos and metals.

🎢 Impact on Real Estate

U.S. Housing Starts Jump 11.2% in February 2025 Despite Year-over-Year Decline in Permits and Completions

• Housing Starts Surge: Privately-owned housing starts rose to 1.501 million SAAR in February 2025, an 11.2% increase from January’s revised 1.35 million, signaling builder optimism amid a fluctuating housing market.

• Permits and Completions Down: Building permits dropped 1.2% MoM and 6.8% YoY to 1.456 million, while housing completions fell 4.0% MoM and 6.2% YoY to 1.592 million, indicating potential supply-side pressures.

• Single-Family Growth: Single-family housing starts rose 11.4% MoM to 1.108 million, while completions surged 7.1% MoM to 1.066 million, suggesting continued demand for detached homes despite broader economic uncertainties.

🎙️ RE Spotlight

U.S. Home Prices Grew 0.4% in February, the Slowest Pace Since July

• Slowing Price Growth: U.S. home prices rose 0.4% month-over-month in February 2025—the slowest increase since July 2024—while year-over-year growth dipped to 5.1%, marking the 10th straight month of deceleration.

• Regional Price Drops in Sunbelt Metros: 8 of the 50 largest metros, mainly in Florida and Texas, saw year-over-year price declines, led by Tampa (-6%), Austin (-3.5%), and Fort Worth (-2.4%), indicating a shift to buyer-friendly markets.

• Opportunities for Buyers: Lower mortgage rates and rising inventory have spurred buyer activity, with some homes selling below list price in over-supplied markets—creating prime negotiation conditions for house hunters this spring.

A Secret Mortgage Blacklist Is Leaving Homeowners Stuck With Unsellable Condos

• 5,175 Condos Blacklisted: Fannie Mae has blacklisted over 5,000 condo developments, up from just a few hundred before the 2021 Surfside collapse, due to inadequate insurance or needed repairs—crippling sales nationwide.

• Sales Falling Through: Deals are collapsing at the last minute when lenders discover a property is blacklisted. Some owners are forced to slash prices or sell for cash.

• Skyrocketing Insurance Costs: Natural disaster risks and rising premiums make it nearly impossible for associations to meet Fannie’s insurance requirements. For example, a California complex saw quotes spike from $260,000 to $2.6 million/year for compliant coverage.

• Cash Buyers Only: Without Fannie or Freddie loans, many condos can only sell to cash buyers, shrinking the buyer pool and depressing property values.

• Policy Standoff: Insurers vs. Fannie/Freddie: Insurers want looser rules, while Fannie/Freddie argue strict standards protect homeowners and markets from risk.

Is Now the Best Time to Buy a Home?

• Home Prices Still Climbing: The median U.S. home sale price has reached $426,000, marking a 3.3% year-over-year increase and sustaining 20 consecutive months of gains—pushing affordability to its limits for many buyers.

• Mortgage Rates Hover Below 7%: With 30-year fixed mortgage rates at 6.8%, near four-month lows, buyers can save over $170/month compared to 7% rates, making now the best time in two years to lock in a rate, according to Redfin’s Chief Economist.

• Rising Inventory in Key Markets: Housing starts jumped 11.2% in February to 1.5 million units, while inventory spikes in Texas and Florida are creating buyer’s market conditions, enabling buyers to negotiate better prices and terms.

🏕️ Niche-RE

Older Americans Are Moving Out of These States as Property Taxes Soar

• High Taxes Fuel Migration: Retirees are fleeing high-tax metros like New York City, Philadelphia, and Chicago, where property tax rates exceed 2%, in search of lower-cost housing markets.

• Top Low-Tax Destinations: Nevada, Arizona, Utah, Colorado, and the Carolinas have some of the lowest property tax rates (<0.5%), drawing older Americans seeking affordability and warmer climates.

• Hotspots for Retirees: Florida remains #1 for retiree moves, while Texas (#2) and Arizona (#3) continue to attract the 65+ crowd. Rising stars include Myrtle Beach, SC, and Wilmington, NC, thanks to low taxes and booming retiree populations.

• Younger Generations Influence Moves: Many retirees are following their adult children out of expensive regions like Illinois and New York, amplifying the outmigration trend.

Americold Launches $127M Metro Houston Expansion

• $127 Million Investment: Americold Realty Trust is acquiring and upgrading a cold storage warehouse in Baytown, TX, with plans for expansion and equipment upgrades totaling $127 million.

• Strategic Location: The facility sits in Cedar Port Industrial Park, the largest rail-and-barge-served industrial campus in the U.S., just 27 miles from the Port of Houston.

• Portfolio Growth: The acquisition adds 35,700 pallet positions to Americold’s U.S. holdings, boosting its 4.5 million pallet position portfolio and 1.2 billion cubic feet of nationwide cold storage space.

• Future Development Potential: Includes 16 acres of land for future expansion to support a recent contract with one of the world’s largest retailers.

• Houston Industrial Market Stats: In 2024, $724 million in industrial assets changed hands in metro Houston with a 7.9% cap rate. Rental rates hit a record $0.79/SF/month, up 2.6% YoY.

🖼️ Chart-Tastic

🌍 Dwelling of the Day

Magical Dream Property Considered one of AD's top 50 houses

And…that's a wrap on this edition!

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