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Gen Z is Turning to Real Estate Investing

March 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.

THE BIG SPLASH

Gen Z is Turning to Real Estate Investing

What you need to know:

  • Gen Zers are increasingly turning to real estate investing as a way to build wealth and escape the constraints of desk jobs.

  • Unlike millennials who faced economic turmoil during the Great Recession, Gen Zers have grown up in a period of economic stability and are keen to enter the real estate market as investors.

  • Gen Zers have access to advanced technology and a wealth of information through online resources such as podcasts, books, and online investing forums.

  • Gen Zers have a positive view of homeownership and view it as a way to build wealth. They have a rosier view of real-estate investing than their immediate predecessors, the millennials.

  • While Gen Z currently accounts for a small percentage of homebuyers, they are expected to enter the market in greater numbers as they scale corporate ladders and amass savings.

A SCOOP OF MARKET DATA

February Brings a Spike in Home Sales

  • Sales of previously owned homes rose 14.5% in February compared with January, marking the first monthly gain in 12 months and the largest increase since July 2020.

  • The median price of an existing home sold in February was $363,000, a 0.2% decline from February 2022.

  • Higher mortgage rates have been cooling home prices since last summer, and for the first time in a record 131 consecutive months, prices were lower on a year-over-year comparison.

  • There were just 980,000 homes for sale at the end of February, according to the Realtors, flat compared with January, representing a 2.6-month supply at the current sales pace, which is still considered historically low.

  • All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022, while individual investors returned, making up 18% of buyers, up from 16% in January but down from 19% in February 2022.

A SCOOP OF TECH

ReAlpha Launches AI-Powered Platform for Fractional Ownership of Vacation Homes

  • ReAlpha has launched a fractional ownership web platform that will use AI to bring a collection of property offerings to investors looking to add short-term vacation rentals to their portfolios.

  • Investors can buy shares in individual properties that have been sourced and authorized by reAlpha prior to being introduced into the market.

  • Unlike timeshares, investors in reAlpha's short-term vacation rentals can purchase passive equity interests and still receive quarterly dividends based on income flow and appreciation on the property's value.

  • ReAlpha plans to create a new property stock market that utilizes the inventory across the proptech landscape.

  • The firm will use its proprietary AI technology — reAlphaBRAIN — to score assets on various real estate attributes, ranging from area population growth and long-term rental projections to walkability and number of nearby restaurants.

A SCOOP OF POPSTAR

Taylor Swift's Real Estate Empire

Taylor Swift, the famous singer-songwriter, has various real-estate holdings worth at least $150 million. Journalist Candace Taylor breaks these assets down, estimating their values.

  • Nashville Penthouse: Swift's first property, bought at 20, for $1.99 million, with a quirky design that has a one-bedroom unit below it, priced at $387,000, which Swift designed herself. It is in Midtown, but the building's website's historical section could cause problems.

  • Nashville Mansion: Swift purchased this four-bed, four-bath mansion in 2011 for $2.5 million, located on the site of a former horse farm, and used to belong to a music executive. Its interior is not publicly accessible.

  • Primrose Hill Flat: Swift spent lockdown with her boyfriend, Joe Alwyn, in a Primrose Hill rental worth £7 million, which is believed to be located close to her exes, Harry Styles and Tom Hiddleston.

  • Kennedy Compound-Adjacent Mansion: During her "dating a Kennedy" era, Swift bought a Hyannis Port mansion across the street from the Kennedy Compound but sold it shortly thereafter.

  • Tribeca, Various: Swift bought her first two penthouse units in Tribeca's Sugar Loaf Building in 2014 for $19.95 million. She continued buying more units and rearranged walls to create one massive downtown home, with the Journal estimating the value of her Tribeca holdings at $45 million.

  • Beverly Hills, Various: Swift sold a second four-bedroom home she owned in Beverly Hills in 2018 for $4 million (after buying it for $3.55 million in 2011).

  • Watch Hill Mansion: Swift bought this Rhode Island mansion for $17.75 million in 2013, has eight bedrooms, ten bathrooms, and is said to have been the inspiration behind her 2014 album 1989.

  • Rhode Island Bungalows: These are Swift's most private properties, consisting of a main bungalow and a beach bungalow, purchased for $17.75 million in 2013. They are located on a private beach, where Swift has hosted multiple July Fourth parties.

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