Highly Anticipated Event😱: The Job Report

Already Friday? Holiday weeks always seem to fly. Welcome to our first weekly market update. In this edition, we are covering general market updates and tackling what has taken over investors’ minds this week, sending the stock market on a little tumble: The Jobs Report which was released at 8:30 am this morning so fasten your seatbelts.

This newsletter is 875 words long, a 3.5-minute read.

Headliner: August Jobs Report

The August report indicates another cool-off only reporting an additional 142,000 jobs being added to the economy missing the expected 165,000. Meanwhile, the unemployment rate ticked lower from 4.3% to 4.2% contradicting the lackluster job additions. Payroll, often correlated with inflation pressure, increased by 0.4% month over month indicating increased consumer spending power.

Why is this important to Real Estate? It all relates to buying power. The more people with jobs, the more income in consumers’ hands to compete for rents/housing, and more people companies may need to accommodate for in office space or manufacturing facilities.

Pending Home Sales Indicator drops to lowest in history (-5.5%)

Last week, the NAR released the July Pending Home Sales Indicator which revealed a drop to the lowest number in the history of the index’s recorded history (since 2001). This is important as home sales typically take 1-2 months from contract to close meaning that this indicator forecasts home sale numbers for the next few months. Economists and financial analysts frequently utilize this indicator to assess the health and strength of the economy in the short term.

Realtor.com weekly housing trends 8/31🏠

Housing trends are showing an overall shift to a buyer’s market with listing prices falling and an increase in new listings. This has been consistent throughout the summer compared to 2023 marking a trend in residential real estate.

Active listings up ticked again providing increased supply and competitiveness to the market which can be linked to the decrease in listing prices.

This market also gives buyers a little more time with home purchasing compared to the frenzy they previously experienced due to homes sitting on the market 6 days longer than this time last year.

Mortgage Rates📈

Interest rates have mapped a steady decline for the past year and look to continue throughout 2024. Going into today, economists expected a 25 basis point reduction at each of the Fed’s remaining 3 meetings for the rest of 2024 link. With the jobs report, there was speculation that a subpar report for August could result in a 50 basis point reduction in September to correct.

CRE: Update on Industrial, Retail, and Hotel Markets

Industrial🏭

Industrial transactions during the first half of 2024 were down 2.2% from the same period of 2023. link

In August, the vacancy rate stood at 6.4%, up 30 basis points from last month, and 379 million sqft of industrial space was under construction compared to levels of 595 million a year ago marking a significant drop. link

Retail🛍️

Retail volume was down 22.9% compared to last year and sales were down 6% from the first quarter. Mall deals led the drop with -46% followed by net leases with -22%.

Hotel🛌🏻

Hotel sales have seen a small drop of 3% compared to last year. Corporate travel strengthened but has still not seen demand at pre-pandemic levels. Leisure travel has indicated tailwinds for hospitality markets with TSA reporting the 10 busiest travel days in history in May & June.

Construction is on the Rise👷🏻‍♀️

Since the pandemic, there has been a record level of construction activity which has resulted in lower rents and more inventory available to renters. Additionally, a rise in commercial construction has occurred to meet energy & data demands from AI’s tech boom.

This increase in construction and supply has forced landlords to offer rent concessions including discounts, free amenities, rebates, and more. About 1/3 of landlords offered concessions in July. This has also caused median rent prices to fall for the first time since the pandemic.

Leading the charge are key metro areas in Texas and Florida. Much of which is in response to the spikes in demand during Covid-era relocation. This has resulted in significant drops in rent prices in these areas.

First Timers!✅

Well, that wraps up the first edition! We have tons of ideas for newsletters we want to release, topics to cover, educational material and more so get excited because they will only get better from here! Long road ahead in regards to realizing this vision but as they say…Rome wasn’t built in a day🤷🏻‍♂️

With each subscriber, we are increasingly motivated to provide the best and most relevant information in Real Estate. Our most effective route for building this community is referrals so if you can share, it goes a long way! (Copy and paste this link)

The information provided in this newsletter is for informational and educational purposes only and does not constitute financial, investment, or real estate advice. The content is based on the opinions and research of the authors and may not reflect the most current market conditions or developments. The analysis of properties is done without consideration of each platform’s fees. Always conduct your own research and consult with a qualified financial advisor or real estate professional before making any investment decisions. The authors and publishers of this newsletter disclaim any responsibility for decisions made based on the information contained herein.