What’s in The Shaker today:

• 📈 Office-to-Apartment Conversion Has Surged

• 🔥 Home Prices to Climb?

• 💰NYC Moves: A Pricey Proposition For Renters

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Office-to-apartment conversion has surged

The office-to-apartment conversion rate has surged by 357% in three years, driven by pandemic-induced lifestyle changes and the rise of remote work, raising questions about the future of the rental market and commercial real estate.

• Conversion Boom: Over 55 office buildings are being transformed into residential spaces across the U.S., with significant activity in Washington D.C., New York, Dallas, Chicago, and Los Angeles.

• Slow Rollout: Despite the increase, the total number of conversions is still a small fraction of the overall market, with projects like the 25 Water Street in Manhattan highlighting the slow pace of such transformations.

• Challenges Ahead: Converting commercial buildings to residential use involves substantial structural changes and costs, and the influx of multifamily supply could impact these conversion plans, despite federal incentives.

Home Prices to Climb?

The spring home buying season might defy earlier flat forecasts and potentially boost home prices by up to 5%, fueled by a stronger-than-expected market rebound.

• Revised Predictions: Contrary to Redfin's initial expectation of a stagnant market with a slight 1% decline, the anticipated spring surge could elevate home prices significantly.

• Market Thawing: Lower mortgage rates, dipping from an 8% peak to around 6.6%, are enticing buyers back, hinting at a market revival after a sluggish 2023.

• Cautious Optimism: Despite the positive outlook, experts like Zillow's chief economist caution that a full market recovery is unlikely, with sales still trailing pre-pandemic levels and mortgage rates expected to stabilize around 6.5%.

NYC Moves: A Pricey Proposition For Renters

Skyrocketing upfront costs are making NYC apartment moves a financial nightmare, with renters shelling out over $10,000 just to get their foot in the door.

• Sticker Shock: Renters like Hannah Brooks face jaw-dropping upfront costs, including first month's rent, security deposit, and broker's fees, totaling upwards of $14,441.

• Market Squeeze: With the average move-in cost hitting a decade high of over $10,400, nearly a quarter of NYC renters say these fees are barricading their moving plans.

• Broker Fee Blues: The contentious broker's fees, often the heftiest chunk of upfront costs, remain a hot topic, with debates swirling around who should foot the bill.

How was today's shake?

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