When Elon Musk follows Jeff Bezos’ play in real estate

February 22, 2023

Rise and shine! It's a new day and The Shaker is here to serve you the best mix of residential real estate news. Yummy yummy.

What you should know:

Real estate has been the source of wealth for some of the richest people on the planet, and most millionaires and billionaires allocate a significant portion of their portfolios to this asset class for its stability, cash flow and substantial tax benefits.
Jeff Bezos invested in the real estate startup Arrived Homes, which acquires single-family rentals across the U.S., securitizes them, then allows retail investors to buy shares of individual properties for as little as $100.
Elon Musk acquired a Texas-based startup called Enclave, which creates customizable, energy-efficient homes that can be delivered in just a few months. The company uses 3D printing and modular construction techniques to reduce costs and speed up the construction process.

Will Wall Street's investments leave Americans perpetually renting?

Institutional investors may own over 40% of single-family rental homes in the US by 2030.
Lawmakers are calling for Wall Street to back away from the market, and the Stop Wall Street Landlords Act of 2022 has been proposed.
The industry began with government backing after the 2008 financial crisis, and companies like Tricon Residential and American Homes 4 Rent have bought thousands of homes since the early 2010s.
Fierce housing inflation in Sun Belt states, like Texas, Florida, and Georgia, is leading to rent increases of up to 44%, which has raised concerns.
Forecasts suggest that by 2030, institutional investors may own over 40% of all single-family rentals on the market, while some companies may retreat from the real estate market as correction concerns mount.

US existing home sales fell 0.7% to a seasonally adjusted annual rate of 4.00 million units last month, the lowest level since October 2010, marking the 12th consecutive monthly decline.
The US housing market has been the biggest casualty of the Federal Reserve's aggressive monetary policy tightening. Residential investment has contracted for seven consecutive quarters, the longest such stretch since 2009.
The median existing house price increased 1.3% from a year earlier to $359,000 in January, which was the smallest annual gain since February 2012. However, properties typically remained on the market for 33 days last month, up from 26 days in December.
At January’s sales pace, it would take 2.9 months to exhaust the current inventory of existing homes, up from 1.6 months a year ago. Fifty-four percent of homes sold in January were on the market for less than a month.
While the housing market is still searching for a floor, business activity rebounded in February, reaching its highest level in eight months, according to a survey on Tuesday.

The sale of an oceanfront trailer in Montauk Shores for $3.75 million has set a new record in the area, selling for $5,000 per square foot.
The two-bedroom, two-bathroom mobile home was custom-built by John Hummel and features high-end finishes with a modern beach vibe, including 180-degree views of the ocean from the living room and back deck.
The Ditch Plains area in Montauk Shores has become an unusual status symbol for the ultra-wealthy, with several billionaires investing in trailers in the community.
The sale of this trailer is indicative of a trend where individuals and families have realized the value of oceanfront communities and are paying a premium for them, particularly since COVID.
Despite the high price tag, the Montauk Shores community offers a classic throwback to a summer community that is relaxed, low-key, and safe for kids, making it an appealing destination for families seeking a high-quality lifestyle.

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