Year of the Rabbit

It’s the Year of the Rabbit

• Housing starts came in at a seasonally-adjusted annual rate of about 1.382 million, down from 1.43 million in November, according to FactSet, Permits were slightly down, 1.6% or 1.33 million. 1.55 million was expected. The 10-year note is at 3.44%. (Barrons)
  
  
• In a recent survey of wealthy clients, 46% of the respondents said real estate was the top investment opportunity, whether “for its attributes as an inflation hedge or due to the benefits of diversification.” (PENTA)
  
  
• Kohler has a bath that promises a spa-like experience in the home. The freestanding Stillness Infinity Experience bath features chromotherapy lights, a mist that covers the surface of the water, automatic filling and temperature control, and a tower that dispenses essential oils. A smartphone app allows the bather to customize and program the light sequences, mist setting, aroma emission, and speed of the waterfall effect, where the bath overflows into a moat. There are also presets inspired by experiences such as watching the sunrise over the sea or a walk through a forest. (FT)
  
  
• Here is a great interview with Robert Reffkin on FORTUNE.
  
  
• Residential construction in Seattle hit a record high with over 13,000 units built in 2022. In 2022, an estimated 420,000 new rental apartments were built in the US, the highest amount for new multifamily construction in a half-century. (NY TIMES)
  
  
• September 2022, one Euro cost 96 cents in US currency. Today, just 4 months later, that has reversed by 13.5%! now it's $1.09. Bitcoin is up about 14% in the same period. The dollar is still strong, but this window shows just how volatile currency markets can be. Several of our clients were in Europe buying real estate this Summer while vacationing at a discount.
  
  
• The next TV revolution for the home? Yes, WIRELESS TV! Displace announced a 55-inch OLED television powered by a swappable rechargeable battery. Video signals are sent wirelessly from a separate unit and OLED claims the battery will last a month if used for 6 hours a day, eliminating the need for unsightly cables. LG launched a 97″ semi-wireless screen, the Signature M3 with a transmitter box that can be placed up to 30 feet away. LG has not dispensed with the mains power lead but the design still allows for a tidier look. (FT)
  
  
• Ken Rogoff, a professor at Harvard University and former top economist at the International Monetary Fund said home prices in both the US markets and abroad will fall “certainly another 10%” over a “couple of years.” (NY POST)
  
  
• A record amount of funds flowed into money market accounts as 2022 ended and those funds could fuel a major stock rally, and buying of assets like real estate. The Investment Company Institute said money market accounts held a record $4.814 trillion in the week ended January 4, eclipsing the prior peak of $4.79 trillion during May 2020. Strategists say investors may hold back from putting more money into stocks since sentiment is sour and money markets are now generating more return than they have been in years, over 3%. (CNBC)
  
  
• A modest drop in mortgage rates over the past month has helped home builder confidence improve in January, after 12 consecutive months of falling. (CNN)
  
  
• Retail Sales during November and December grew 5.3% year over year to $936.3 billion, below the major trade group’s prediction for growth of between 6% and 8% over the year prior. Sales at furniture and home furnishings stores declined 1.1% (CNN)
  
  
• In November 2022, the FHFA increased the limit for conforming loans — mortgage loans backed by Fannie Mae or Freddie Mac — to just over $1 million in some high-cost markets and by $79,000 in most other areas in 2023. In markets where 115% of the local median home value exceeds the baseline conforming loan limit for one-unit properties, home buyers are permitted to use the high-cost area loan limit. In other markets, the new baseline mortgage limit for conventional loans backed by Fannie Mae and Freddie Mac is $726,200 in 2023, up from $647,200 in 2022. The change means that an additional 2 million homes in those high-cost markets can now be financed by mortgages backed by Fannie Mae and Freddie Mac, Zillow said. Previously these homes would have to be financed by jumbo loans, which require additional fees and have higher qualification standards making them less affordable for most buyers.
  
  
• I was rather encouraged to see lots more positive press about the real estate sector recently, this article was hopeful that a turnaround is coming.
  
  
• * Russians were the biggest international buyers of Dubai real estate last year when the city emerged as a haven amid geopolitical and economic uncertainty elsewhere. (Bloomberg)
  
  
• 13 out of the 30 top global cities are forecast to record equal or even slightly enhanced growth in 2023. The top destinations are Dubai and Singapore, which are predicted to see price growth of between 6% and 7.9% in 2023, down from 12.4% and 6.8%, respectively, in 2022. Miami and Milan are next, with a forecast of 4% to 5.9% growth this year. For Miami, that’s a huge drop from the 25.4% recorded in 2022, but it’s on par with last year’s growth in Milan, which was the top-performing market in southern Europe last year. These cities have seen a significant migration of high-net-worth individuals, and are set to continue to do so. Wealthy individuals are not immune to economic headwinds, but a limited supply of quality inventory is protecting prices from falling too much. Hong Kong is expected to see the biggest drop in prices in 2023, between 6% and 7.9%, compared to an 8.5% decrease in 2022, yet it remains the world’s most expensive prime residential market. (Barrons)
  
  
• A 2020 National Association of Realtors analysis shows 28% of the people who moved to Florida came from Texas. HUH? From July 2021 to July 2022, Florida’s population grew to over 22 million people, according to Census Bureau data. The 1.9% increase was the largest of any US state over this period, just exceeding Idaho and South Carolina — which saw their populations grow by 1.8% and 1.7%, respectively. Florida’s population has grown every year since 1946, increasing ninefold from a population of roughly 2 million in 1946, around the time air conditioning became more prevalent. Nevada’s increases are even higher. Its 2022 population of 3,177 million is a stunning 22 times its 1946 population of 143,000. For 36 of the 76 years since 1946, Nevada has held the top spot. Arizona, Idaho, Utah, North Dakota, and Alaska are among the other fastest-growing in the postwar era.
  
  
• Of the 59 cities in the US with the highest violent crime per capita (up till September 2022), not one of the following cities – Los Angeles, Austin, Miami, Chicago, or New York City – appeared on the list, Rochester and Buffalo were the only New York State cities to make the list. (PopulationU)
  
  
• New York, Massachusetts, Rhode Island, New Jersey, Minnesota, Washington, Illinois, Hawaii, Connecticut, and Maryland are the Top 10 safest driving states in the US with the lowest automotive-related fatalities per capita. (NHTSA)