Appraiser News Online

Rep. Adam Smith, D-Wash., and Sen. Jeff Merkley, D-Ore., on Dec. 5 introduced legislation to ban hedge funds from buying and owning single-family homes in the U.S. Known as the End Hedge Fund Control of American Homes Act of 2023, the bill would require hedge funds to sell off all single-family homes in their portfolios over a 10-year phaseout period. The intent is to increase the availability and affordability of single-family homes for individual buyers.

Economic growth is expected to slow in 2024 and real estate transaction values should decline further, which could create compelling buying opportunities, although lending is expected to remain tight, CBRE reported Dec. 14 in its 2024 U.S. Real Estate Outlook. However, the firm also reported that it expects commercial real estate values to rebound during the second half of the year.

A wave of distress in the multifamily sector is predicted to hit during second half of 2024 when a large volume of variable-rate bank loans comes due, according to Origin Investments, GlobeSt.com reported Dec. 11. Further exacerbating the situation are falling multifamily valuations that seem likely to keep failing and a flood of new construction entering the market.

The median asking rent experienced a 2.1% year-over-year decline in November to $1,967, marking the most significant annual drop since February 2020, Redfin reported Dec. 13. The slowdown can be attributed to a surplus of apartments resulting from recent construction, economic uncertainty, slowing household formation and affordability challenges.

Miami was the nation’s top rental market this year, driven by a thriving tech scene and a business-friendly climate, RentCafe.com reported Dec. 11. The number of apartments for rent there increased 3.7% during the year, but the new units were still not enough to meet demand. Elsewhere, the Midwest emerged as a very competitive region, with three top rental markets: Milwaukee; Grand Rapids, Michigan; and suburban Chicago.

More apartments are being constructed in lower-rent suburbs than in higher-rent areas for the first time in at least a decade, according to RealPage Analytics, GlobeSt.com reported Dec. 14. This shift in historical trends is attributed to rising land prices in established, wealthier suburbs that’s pushing development to more affordable areas. Fifty-eight percent of housing in less affluent areas is rental compared with 27% in wealthier areas.

Mobile home values are on the rise, with the average sales price increasing 77.1% between 2017 and 2022, LendingTree reported Dec. 4. In contrast, single-family home prices rose 46.7% during the same period. Idaho has the highest average mobile home price at $168,500 while Kansas has the lowest at $100,800.

Around 4.71 million homes are expected to sell in 2024, a 13.5% increase from the 4.1 million projected to be sold this year, the National Association of Realtors reported Dec. 13. However, the median home price is anticipated to remain at around $389,500.

Toledo, Ohio, topped the list of housing markets expected to see the greatest activity in 2024 based on the city's relative affordability compared with the national median home price, Realtor.com reported Dec. 4. Oxnard, California, and Rochester, New York, were second and third on the hot list, respectively.

Home prices are expected to rise 2.4% in 2024 and 2.7% in 2025, according to real estate experts who participated in Fannie Mae’s Home Price Expectations Survey that was released Dec. 11. The experts also said they anticipate home prices to end this year up 5.9%. As for mortgage rates, they see them settling at around 5.7%.

Mortgage rates during the past week fell to their lowest level since August, Freddie Mac reported Dec. 14 in its Primary Mortgage Market Survey. Freddie sees a gradual thawing of the housing market in the new year amid slowing inflation and indications that the federal funds target rate will be lowered.