U.S Inflation = Rising Rents

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 - Buying a house is about more than square footage—it’s about finding a place to belong.

In today’s edition - Canada’s recent labor dispute, marked by the Trudeau administration’s swift intervention at the nation’s largest ports, has sparked intense debate over workers’ rights and economic stability. As markets adjust and inflation continues to impact housing, from rising rents to regional disparities, the repercussions stretch beyond borders. From the latest trends in affordable housing to a slowdown in multifamily construction, 2024 is shaping up to be a year of significant shifts in both global and local real estate. Discover how these developments are shaping investment opportunities and the broader economy.

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Rates & REITS

Average going rates as of Nov 12 2024

Numbers as of Nov 12 2024 closing

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🏛️ Economic & Market Sentiment

Economic Stability vs. Workers’ Rights: Analyzing Canada’s Labor Standoff Amid Market Shifts

• Labor Action and Economic Impact: The Trudeau administration took decisive action to end lockouts at Canada’s largest ports, invoking rarely-used authority under the Canada Labor Code. This intervention, aimed at maintaining economic stability, impacts a supply chain that handles over C$1.2 billion in goods daily.

• Market Ripple Effects: With recession risks now seen as lower, Trudeau's move mirrors global trends to maintain economic flow amid labor disputes, much like the US bond market’s reaction post-election. Similar to how markets react to the Trump administration's policies, this action focuses on supporting sectors vital to economic stability—while raising labor rights concerns.

• Worker Rights and Legal Challenges: The unusual federal intervention has sparked backlash from unions, with the Montreal Longshoremen’s Union calling it a "dark day" for labor rights. Meanwhile, Canada’s Teamsters Rail Conference challenges the legality, arguing it risks setting a dangerous precedent for workers’ rights in future disputes.

Stock Market on Nov 12 2024 - Nasdaq, S&P 500, Dow Industrials

🎢 Impact on Real Estate

Where Has Inflation Hit the Hardest? Rising Rent Prices the Most

• Rents Have Surged Beyond Other Goods: Rent prices have risen by 50% more than the overall Consumer Price Index (CPI), significantly outpacing inflation across the board, with home prices growing even faster. This highlights how inflation has been disproportionately concentrated in the housing sector.

• Regional Disparities in Inflation: Regional inflation varies drastically, with Miami, Atlanta, Dallas, and Tampa experiencing over 25% inflation, compared to lower inflation rates in cities like Minneapolis (18%) and Seattle (26%). These differences show that inflation's impact is felt most intensely in the South and in high-demand urban centers.

• Renters Bear the Brunt: For renters and first-time homebuyers, housing inflation is a major driver of the cost of living, amplifying the overall inflation rate in many metros. Conversely, homeowners with fixed-rate mortgages are insulated from these spikes, making their inflation experience closer to the national average for non-housing goods.

🎙️ RE Spotlight

Opportunity Zones Show Steady Growth in Home Prices Despite Challenges - Click to Read

1. Median Prices Rising Across Opportunity Zones: 53% of Opportunity Zones saw home prices rise in Q3 2024, continuing a trend of growth in underserved neighborhoods, with 61% seeing annual increases.

2. 10% Annual Price Surge in Nearly Half of Zones: 43% of Opportunity Zones saw a 10%+ rise in home prices from Q3 2023 to Q3 2024, outperforming broader national trends and signaling strong economic revival.

3. Price Volatility Highlights Regional Disparities: While some Opportunity Zones experienced significant price growth, 48% of low-priced zones saw flat or decreasing values, revealing challenges in the most distressed areas.

Landlord-Built Leases Surge: Why Pre-Built Office Spaces Are the Future

1. Landlord-Built Leases on the Rise: Landlord-built office spaces now make up 46.6% of leases, reflecting a growing demand for move-in-ready environments, up from 11.6% in 2019.

2. Faster Move-In Times Boost Landlords: Tenant turnover is quicker with landlord-built spaces, reducing vacancies by 33% and accelerating rent payments, especially for offices between 10,000 and 24,000 sq ft.

3. Landlord-Built Spaces Command Higher Rent Premium: Office spaces built by landlords continue to command an 18.9% rent premium, with notable gains in high-value leases post-pandemic.

🏰 RE State Zone

Affordable Housing in the Midwest: Top 3 Hottest Markets for Budget-Conscious Buyers

• Budget-Friendly Markets in the Midwest: Rockford, IL, Akron, OH, and Canton, OH are drawing homebuyers with median home prices around $250,000—well below the national average of $424,950, making these areas prime targets for affordable living. Buyers can expect typical monthly mortgage payments under $1,500, significantly lower than in many larger cities.

• Rockford Offers More Than Just Low Prices: With a median list price of $242,000, Rockford stands out due to its unique incentives like free college tuition and a thriving aerospace and manufacturing industry. Buyers are also attracted to its proximity to major cities like Chicago and Milwaukee, making it an appealing option for suburban migrants.

• Akron and Canton Show Steady Demand: Akron, OH ($228,000 median price) benefits from natural beauty and climate resilience, with homes selling 22 days faster than the national average. Canton, OH ($252,000 median price), ranked No. 1 in the Wall Street Journal/Realtor.com® Housing Market Ranking, offers low living costs and a strong return on investment for real estate buyers, particularly those migrating from larger nearby metros.

🏕️ Niche-RE

Multifamily Construction Trends and Forecast 2024–2029 - Full Forecast Q4 2024

• Multifamily Construction Decline: New multifamily construction starts have dropped over 50% since 2022, with 2024 projected to see approximately 325,000 units begin construction, reflecting a slowdown in the sector's growth.

• Elevated Under-Construction Pipeline: Despite a slowdown in new starts, over 1.16 million units remain under construction, with completions expected to peak in 2025 before significantly declining by 2026 and 2027.

• Future Rebound in 2026-2029: The multifamily development market is expected to rebound by 2026, with construction activity gradually increasing to around 405,000–426,000 units by 2028–2029 as capital conditions improve and development pipelines expand.

How Generative AI is Revolutionizing Property Management - Click to Read

• Streamlining Operations with AI: Automate tasks like resident communication, virtual tours, and lease generation, saving property managers up to 42 hours per week per property, as reported by Apartment List’s Lea Pro.

• Enhanced Resident Experience: Provide 24/7 personalized support, reducing after-hours staffing needs by 53%, and improving response times for maintenance requests and inquiries.

• Cost & Efficiency Gains: Cut operational costs by 25-40% through predictive maintenance, AI-driven market analysis, and optimized rent pricing, leading to smarter budget allocation and improved ROI.

🖼️ Chart-Tastic

Reported Q3 2024 TransUnion Credit Industry Insights Report

🌍 Dwelling of the Day

A beautiful home for sale in Sweden!

Currently for sale for $75,100!

It has 4 bedrooms and 2 bathrooms!

Link to Listing

And…that's a wrap on this edition!

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