Billionaire Grant Cardone says Investors Will Save the Day

February 21, 2023

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What you should know:

High home prices and mortgage rates have sparked a downturn in the US real estate market, with some experts warning of a potential housing crash.
Billionaire real estate fund manager, Grant Cardone, claims that investors such as himself will prevent a housing crash from occurring.
As a result of a decline in home sales and prices, institutional real-estate investors have invested over $110 billion to purchase or build single-family rental homes.
Experts predict that as home prices decline, this could draw investors back into the market.
Housing affordability is at a record low, with home sales and prices decreasing nationwide, particularly in pandemic hotspots such as Austin, Texas, and Phoenix.

U.S. Mortgage Rates Are On The Rise Again

The US housing market is showing signs of life, as a mild home price correction and falling mortgage rates make homes more affordable, just in time for the busy season.
However, mortgage rates are on the rise again, with the average 30-year fixed mortgage rate back up to 6.8% in February, the highest reading since early November. This means affordability is once again deteriorating.
Housing affordability is as bad now as it was before the housing bubble burst in 2007, according to the Federal Reserve Bank of Atlanta. This could make it hard to sustain a strong recovery in home sales.
Economists say that rising incomes, falling home prices, and falling mortgage rates are the three levers that can improve housing affordability, with mortgage rates having the biggest impact in the short term.
Predicting future mortgage rates during an inflationary period can be challenging, but some leading research firms have provided forecasts. The Mortgage Bankers Association projects the 30-year fixed mortgage rate to average 5.2% in 2023, while Realtor.com predicts an average rate of 7.4%.

Last week's unseasonably warm weather positively impacted Manhattan's luxury residential real estate market.
A total of 31 properties priced at $4 million or more were sold in the week ending Sunday, six more than the previous week.
The No. 1 deal of the week was a 27th-floor unit at Hampshire House on Central Park South, which was sold in less than two weeks for $30 million.
The No. 2 deal of the week was a downtown penthouse on Park Place, priced at $19.75 million, with four bedrooms, four-and-a-half bathrooms, and two terraces.
Building amenities are an important part of the sale for high-end properties, and the Hampshire House includes a health club, laundry service, safety deposit boxes, a doorman, bell captain, and concierge, while the Park Place penthouse is in an 80-story tower with a Four Seasons Hotel on the lower floors and a 75-foot pool, a fitness center, and a children's playroom.

Construction of multifamily housing with five or more units in the U.S. dropped by 5.4% to a rate of 457,000 units in January, reflecting a disappearance of financing rather than a lack of demand.
Property management opportunities have grown significantly amid a national housing shortage, attracting small and large regional and national entities.
Demand for property management companies is driven by an increase in the number of small multifamily owners who have grown tired of handling the management of their own properties.
The growth of the property management space is expected to continue as there is more work than can be handled right now.
Companies are starting to offer tenants new technology options, with Charter Communications Inc. teaming up with Quext to build intelligent home offerings for new and existing customers.

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