😨Feds Fear Commercial Chaos
Office loan defaults surge, raising alarm bells.
While the housing market cools, the Federal Reserve has its own worries.
Office loans are giving them sleepless nights as commercial real estate delinquencies hit a ten-year high.
Moody's even downgraded Blackstone Mortgage Trust because over half of its investments are tied up in office spaces that aren't exactly in demand these days.
On the flip side, some people are finding new ways to navigate the market.
Passive Cash-Flowing Properties
Buy shares of investment properties, earn rental income & appreciation for anywhere from $100 to $20k — let Arrived take care of the rest.
Instead of selling, homeowners are becoming landlords, renting out their places and avoiding the tough selling conditions.
Renters get a home without the headaches of ownership, and owners earn steady income.
In construction news, things are a bit mixed.
Housing starts are up a bit, but building permits have dipped, leaving builders cautiously optimistic.
Over in the industrial real estate world, construction has slowed down by 50%, and vacancies are expected to peak by mid-2025.
Rising costs and economic jitters are putting new projects on pause
In this edition of the AltReports:
😰 Fed's Fears
🏚️ Housing Halt
📉Portfolio Plummet
⚖️ Price Paradox
🎢 Market Mysteries
Video of the Week: From Distressed Property to $50 Million Asset
Chart of the Week: Distress in Commercial Real Estate Bonds Hits All-Time High
Podcast of the Week: Financial Freedom in 8 Years by Investing for Equity (NOT Cash Flow)
Office Loans Are The Fed’s ‘Top Concern’ As CRE Delinquencies Reach 10-Year High
Guess what's keeping the Federal Reserve tossing and turning? Office loans!
With commercial real estate delinquencies hitting a decade high, the Fed's stress test report reads more like a horror story.
So, the Fed is on high alert, making sure banks have enough cushion to survive this mess.
Demand Destruction for Existing Homes: Sales in 2024 Track Lowest since 1995
Existing home sales have plummeted to levels not seen since 1995.
Who would've thought that sky-high mortgage rates and bloated home prices would scare off buyers? Shocking, really.
Meanwhile, unsold homes are stacking up like unread emails, hitting a six-year high for October.
Moody’s Downgrades Blackstone Mortgage Trust On Office Concerns
In a plot twist everyone saw coming, Moody's downgraded Blackstone Mortgage Trust from Baa3 to Ba1. Why?
Because betting big on office properties in the era of Zoom meetings isn't the smartest move.
Over half of their assets are tied up in office spaces nobody wants.
More People Profit from Arbitraging between Renting and Buying
Why own a money pit when you can rent and let someone else deal with leaky roofs and property taxes?
Investors are laughing all the way to the bank, turning would-be sellers into landlords overnight.
Owners get steady income without the hassle of selling in a saturated market, and renters avoid the financial black hole of homeownership.
Is Home Construction Entering a Slowdown?
Is the home construction market coming or going?
Housing starts are up 3.2%, but building permits are down 2.4%.
Builders are "cautiously optimistic," which is industry-speak for "we're hopeful but not stupid."