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Above the Line is a weekly digest of the most important stories in real estate, accounting and finance.  




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Adapting to Change: Real Estate Resilience

July 10, 2024



In this edition of Above the Line, we explore how the real estate and finance sectors are demonstrating resilience and adaptability in the face of new challenges. From enhanced national security measures to evolving commercial real estate strategies and shifting residential construction patterns, we see industries positioning themselves for future stability and growth.

Let's dive in. 




US to Expand Scrutiny of Foreign Investments Near Military Bases
Bloomberg
The U.S. Treasury Department's expansion of oversight for foreign investments near military installations signals a proactive approach to national security. This move could enhance long-term investor confidence by creating a more stable and secure investment environment.

Big Banks Demonstrate Foresight in Commercial Real Estate
Wall Street Journal
Large U.S. banks are showcasing their adaptability in navigating the commercial real estate market. With substantial provisions already in place for potential office-loan losses, these institutions are demonstrating prudent risk management and forward-thinking strategies.

Residential Construction Shifts Signal Market Responsiveness
Redfin
The slowdown in multifamily building permits reflects the industry's ability to respond to market conditions. This adjustment could lead to a more balanced rental market in the future, potentially benefiting both property owners and renters in the long term.


REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.







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The Presidential Election is Impacting Mortgage Pricing

July 3, 2024


In this edition of Above the Line, the ramp-up to the presidential election, tepid home sales, and the U.S. economy's continued strength are all keeping mortgage rates above 7%. We also see unexpected dips in construction spending and slowing home price growth. 

Let's dive in.




Resilient Economy Keeps Mortgage Rates Above 7%
HousingWireThe 30-year conforming rate stood at 7.11% on Tuesday, while the 15-year rate saw a steep rise to 6.99%. With the Federal Reserve unlikely to lower rates soon, little change is expected in the short term.

U.S. Construction Spending Unexpectedly Falls in May
Reuters
U.S. construction spending dipped 0.1% in May, contrary to economists' expectations. The decline was primarily driven by a decrease in single-family homebuilding, influenced by higher mortgage rates. While overall construction spending increased 6.4% year-on-year, the recovery may be tempered by improving housing supply.

Home Price Growth Slows to Lowest Level Since October
HousingWire
CoreLogic's latest report shows U.S. home prices grew by 4.9% year-over-year in May, the lowest rate since October 2023. While limited inventory and high mortgage rates continue to push prices up, the pace of growth is decelerating. The Northeast continues to lead in price appreciation, with New Hampshire posting the highest annualized growth among states at 12%.



REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.







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Yellen Announces Efforts to Boost Housing Supply Amid Affordability Crisis

June 26, 2024


In this edition of Above the Line, we highlight new federal initiatives to increase affordable housing, the resilience of Dubai's real estate market, and a new Freddie Mac pilot program for second mortgages.

Enhancing the supply of cost-effective housing through fresh federal investments has the potential to consolidate housing prices, foster economic activity, and generate employment opportunities. Such a measure would undoubtedly contribute to the overall stability of the economy, while simultaneously posing the risk of exacerbating our existing budget deficit and elevating interest rates.

Let's dive in. 




Yellen Announces Efforts to Boost the Housing Supply as High Prices Create a Crunch
Associated Press
The Biden administration is rolling out new initiatives to address the affordable housing crisis. Treasury Secretary Janet Yellen announced $100 million in new funding and other measures aimed at increasing housing supply and alleviating affordability pressures. 

Dubai Real Estate’s Resilience May Signal End of Boom-Bust Cycle
Yahoo Finance
Dubai’s real estate market continues to defy predictions of a slowdown. Home values and rents are rising steadily, signaling a potential end to the city's historical boom-bust cycles. Analysts cite a stable influx of foreign buyers and robust demand for luxury properties.

US Approves Freddie Mac Pilot Program to Buy Second Mortgages
Bloomberg
Freddie Mac has been authorized to buy up to $2.5 billion in second mortgages over an 18-month trial period. This pilot program aims to make it cheaper for households to borrow against their home equity, particularly benefiting rural and low-income homeowners.


REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.







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U.S. Home Sales Hit Near Record Lows in May

June 19, 2024


In this edition of Above the Line, we look at the latest downturn in U.S. home sales, the ongoing legal clash between the DOJ and NAR, and the heated bidding war for Mexican industrial real estate.

Let's dive in. 




U.S. Homes Sales Fell to One of Lowest Levels on Record in May
World Property Journal
U.S. home sales dropped 1.7% month over month and 2.9% year over year in May 2024, marking one of the lowest levels on record. High mortgage rates and low inventory are driving up prices and causing sluggish sales.

DOJ Pushes Back on NAR’s Rehearing Request
Real Estate News
The DOJ has pushed back on NAR's request for a rehearing regarding the reopening of an antitrust investigation. The ongoing legal battle could have significant implications for the real estate industry.

Bidding War for Mexican Industrial Real Estate Fund Heats Up
Yahoo Finance
Blackstone and other rivals have increased their bids for the Mexican industrial REIT Terrafina, spurred by recent election results and the devaluation of the peso. The competition reflects the strong demand for industrial real estate in Mexico.


REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.







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Hotel Executives Eye Empty Office Buildings for Conversion Amid Strong Demand

June 12, 2024


In this edition of Above the Line, we explore the innovative strategies hotel executives are adopting to meet rising demand, the uptick in U.S. asking rents, and the ongoing legal battle over Los Angeles' Measure ULA.

Let's dive in. 




Hotel Executives Eye Empty Office Buildings for Conversion Amid Strong Demand
Reuters
Hotel executives are looking to convert vacant office and residential buildings into hotels to meet the high demand in the hospitality industry, despite challenges in financing new constructions.

U.S. Asking Rents Ticked Up for Second Straight Month in May, Hitting Highest Level Since 2022
Redfin
The median U.S. asking rent rose 0.8% year over year in May to $1,653, marking the highest level since October 2022. This increase is driven by high demand from young renters and a steady influx of new apartment units.

Measure ULA Gets Another Day in Court
The Real Deal
The U.S. Court of Appeals for the Ninth Circuit will review the legality of Los Angeles' Measure ULA, which imposes a substantial tax on high-value real estate transactions to fund affordable housing and tenant assistance.


REDD Accounting is a global firm specializing in property accounting and bookkeeping services for real estate companies. Whether you are a small-scale operation or managing a large portfolio of properties, we have the expertise and resources to support your unique needs.







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