Leni’s Post

Time to consider adding some private real estate to your portfolio? Private real estate values have fallen by ~25% since the peak in 2022 and market indices suggest the market bottomed late last year...

We see a window of opportunity for property investors with a long-term focus right now. This window of opportunity is not because properties are cheap, but when you look back in 3 years' time the price you would pay for the property today will definitely look ‘cheap’. The opportunity arises because consumer confidence is low at present, with many prospective homebuyers and investors sitting on the sidelines. Sooner rather than later many prospective buyers will realise that interest rates are near their peak and that inflation has peaked as the RBA's efforts have brought it under control. And at that time pent-up demand will be released as greed (FOMO) overtakes fear (FOBE - Fear of buying early), as it always does as the property cycle moves on. We saw an opportunity like this in late 2018-early 2019 when fear of the upcoming Federal election stopped buyers from entering the market and look at what's happened to property prices since then. #australianproperty #powertothebuyer #buyersagent #invest #investing #realestateadvice #propertyexperts #propertyadvice #wealth #property #propertyinvesting #realestate #mindset #dreamhome #motivation #success #housingcrisis #inflation #affordabilitycrisis #marketanalysis #analytics #ai #realestateexperts

🤔 Why are Individual Investors Are Slowing Down in CRE? For two years, individual investors drove property prices higher, but that momentum is fading. 📉 Recent data shows that these small-dollar deals are slowing down, with price gains at their lowest in over a decade. Understanding why this shift is happening could be crucial for anyone navigating the current market. 👇🏾Here’s what you need to know about the changing landscape. ➪ Slowing Price Gains Small-dollar deals just saw the slowest price gains since 2012. • Year-over-year growth is down to 1.7%. • This is a significant drop from the 4% gains we’ve seen in previous months. • The trend indicates a cooling market for individual investors. What does this deceleration signal? ➪ Impact of High Interest Rates Rising interest rates are taking a toll on individual investors. • The Fed’s rate hikes have made financing more expensive. • Private investors were slow to adjust, but now they’re pulling back. • Properties are staying on the market longer as buyers become more cautious. Interest rates are reshaping the dynamics of small-scale investments. ➪ ➪ ➪ IMO - smaller investors are SMART. And here’s what they’re doing: 1️⃣ They know an interest rate pivot is coming, so they pulled back in July. 2️⃣ Working on getting any refinances they need to, ready to go. 3️⃣ Seeing what deals they can potentially dispose of, in this next wave of transactions. ⬇️ What do you think? Let’s get the conversation going. (Credit to Costar) #commercialrealestate #realestate #CRE

Recent market fluctuations and interest rate hikes have taught us a lot about our current real estate market. One major takeaway, as highlighted in our latest quarterly article, is the disconnect between public and private market real estate values. Findings show that public real estate values react to changes in the economy because they're influenced by market sentiment, while private real estate values take longer to adjust because they rely on past transactions to determine property worth. While this phenomenon isn't new historically, the Rosen Consulting Group offers a few solutions to address this disconnect through solving appraisal lags and redemption queues: - Encourage appraisers to use a broader toolkit and emphasize the discounted cash flow method to reduce appraisal lag by capturing market changes more effectively. - Follow the European model by granting US appraisers greater flexibility to determine an estimated "fair value" based on participant knowledge in the absence of comparable sales. - Make use of existing tools, like the band of investments method, which considers debt and equity components to calculate an overall cap rate. - Expedite portfolio value adjustments by utilizing opportunities to write down values outside of quarterly appraisals. Click the link below to access the full report, and stay tuned for a preview of another Quarterly article tomorrow, featuring a real-life investing case study from Texas! #PREA #RealEstateResearch #RealEstate #Research #IndustryLeaders #MultifamilyRealEstate #NewResearch https://lnkd.in/erBb9frJ

Crexi’s latest report reveals a CRE market at the edge of change. 💸 Fed’s Big Move: A 50 bps rate cut is sparking optimism, with borrowing costs easing and investors gearing up for opportunities. 📊 Mixed Signals: Optimism rises, but challenges like rising delinquencies and $2T in maturing loans demand creative solutions. 🏘️ Multifamily Shines: High demand, resilient pricing, and surging investor interest lead the way. Signs point to a market rebound. Get the full scoop: https://lnkd.in/gYd5izhr #CRE #RealEstateTrends #MarketInsights

#AltsInFocus Does the reduction in interest rates mark the bottom for commercial real estate values? Private real estate values have fallen meaningfully by ~25% since the peak in 2022. The pace of value depreciation has slowed significantly in recent quarters and has been more concentrated in certain markets and asset types. Additionally, transaction market indices (e.g., Greenstreet), show the market bottomed late last year, recovering by 3-5% since, led by the industrial and apartment sectors. The Federal Reserve’s interest rate policy pivot is expected to provide more stability for real estate values and yields, and potentially lead to appreciation for higher quality assets that might benefit from outsized tenant and investor demand. This should in turn fuel more capital flows and investment activity. Lower interest rates and the lag between transaction and appraisal indices suggests that core real estate should be forming a bottom and begin to appreciate later this year and next year, for preferred sectors and assets. It takes time for appraiser sentiment to shift and reflect market transactional evidence, which is one reason real estate tends to outperform on the other side of a price correction.

Why There Won’t Be A Recession That Tanks The Housing Market There’s been a lot of recession talk over the past couple of years. And that may leave you worried we’re headed for a repeat of what we saw back in 2008. Here’s a look at the latest expert projections to show you why that isn’t going to happen.  According to Jacob Channel, Senior Economist at LendingTree, the economy’s pretty strong: “At least right now, the fundamentals of the economy, despite some hiccups, are doing pretty good. While things are far from perfect, the economy is probably doing better than people want to give it credit for.” Full Article: https://lnkd.in/g4HrBivN #Sellers #Buyers #Foreclosures #EconomicPredictions #RealEstate #WA #PNW #PierceCounty #Puyallup #BonneyLake #Tacoma #Graham #GigHarbor #IslandLife #KingCounty #KitsapCounty #MasonCounty #ThurstonCounty #AltitudeHomes #AltitudeHomesTeam

Talking with my partner this morning about when U.S. real estate will really loosen up. As two investors that have seen a few full market cycles over the past 25 years, we believe it will likely be a while until serious behavioral biases are overcome which we can all see plain as day right now: 1.   Anchoring: 40 years of rates moving lower has created a generation of humongous wealth (that’s a technical term) in fixed income and quasi-fixed income assets like Real Estate. This is particularly true for the huge (again, technical term) amount of the population that was levered long these assets. The realization that a cap rate has to at least yield over treasuries in any medium term time frame - and historically has averaged 2.25% higher than 10 Year Treasuries - is finally dawning on investors, albeit slowly. The market never cares what you could have sold for two years ago! 2.   Confirmation Bias: As transaction volume picks up over the coming quarters, sellers’ focus on highlighting a single comp that supports their higher-than-market ask will also fade away. In greed-driven cycles, confirmation bias drives prices up. In fear-driven cycles, it backfires. 3.   Loss Aversion: Probably the most powerful of the three behavioral biases listed in this post. Fortunately for the optimists, (and rather unfortunately for the real estate "is going to zero" crowd) so much of the real estate stock is so deeply in the money at this point that the last couple years of overpaying entrants taking their bag and going home shouldn’t blow up most investors’ portfolios.

“The Fed's first rate cut in four years is a critical step for the commercial real estate market, which has been paralyzed for too long. While it’s not a cure-all, it’s a powerful psychological signal that could break the market's stagnation. Investors have been hesitant, holding back due to uncertainty, but today’s decision might finally shift that mindset. The hope is that we’re turning a corner, where deals can start moving again, helping to restart the real estate recovery and stabilize our broader economy. There’s an estimated $324 billion in dry powder sitting on the sidelines, waiting to be deployed in real estate. This rate cut could be the push investors need to start putting that capital to work, unlocking significant potential for growth and recovery.”

🏦 Potential Fed Rate Cuts in September: What It Means for Real Estate Investors 🏠📉 The buzz around potential Fed rate cuts in September has the financial world on edge, and real estate investors are paying close attention! Lower interest rates could have a significant impact on the real estate market, and savvy investors know that timing is everything. Here’s how these potential cuts could shape the landscape and how Pocket Properties is here to help you seize the opportunity! 🚀✨ 🔹 Lower Borrowing Costs: If the Fed decides to cut rates, borrowing costs for real estate investments could drop, making it cheaper to finance new properties or refinance existing ones. Pocket Properties offers our users a seamless way to capitalize on these lower rates, allowing you to get more bang for your buck and enhance your real estate portfolio. 💼📉 🔹 Increased Demand for Real Estate: With lower interest rates, more buyers could enter the market, driving up demand for properties. This could lead to quicker sales and potential price increases in certain markets. Pocket Properties makes it easy to access a variety of investment opportunities, so you can strategically position yourself in high-demand areas and maximize your returns. 🌍🏘️ 🔹 Opportunities for Passive Income: Rate cuts can also benefit rental property investments by lowering mortgage payments and increasing cash flow. With Pocket Properties, you can explore a range of real estate crowdfunding opportunities that provide passive income potential, all while navigating the changing interest rate environment. 💵🔄 🔹 Long-Term Growth Potential: Even as rates fluctuate, real estate remains a strong long-term investment. Pocket Properties allows you to diversify your portfolio, access exclusive deals, and leverage market conditions to build wealth over time. Whether you're a seasoned investor or just getting started, our platform is designed to help you succeed. 📈🏠 Why Choose Pocket Properties? At Pocket Properties, we’re committed to empowering investors like you with the tools and opportunities to thrive, no matter what the market brings. With the potential Fed rate cuts on the horizon, now is the time to explore how our platform can help you take advantage of the changing real estate landscape. Let’s connect and discuss how Pocket Properties can support your real estate investment journey in these dynamic times! 🤝💬 #PocketProperties #RealEstate #Investing #FedRateCut #PassiveIncome #WealthBuilding #InterestRates #InvestmentOpportunities #Growth #GrowthMindset #Mindset