Welcome to The Data Drop by TRD Data, a weekly look at the numbers shaping real estate.
This week, we explored how commercial real estate deal volume plunged 33 percent in April compared to the year before. But experts say not to read too much into one month’s worth of data, which can be noisy. For instance, year to date, deal volume is up by 14 percent year over year. MSCI’s commercial pricing index, which covers the office, retail, industrial and apartment sectors, also climbed year over year, by 1.1 percent.
The winning sector for the month, in terms of deal activity, was senior housing, which saw sales volume climb 13 percent year over year.
There are some red flags the industry is watching carefully. The war in the Middle East is dashing economic optimism, not to mention spiking interest rates and inflation. The yield on the 10-year Treasury also is higher than many in the industry would like, which can slow down deals.
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Here’s what else TRD Data covered this week:
🏗️The housing split: single-family down, apartments up
Single-family homebuilding is down across every market tracked by the National Association of Home Builders, which hasn’t happened since the third quarter of 2023. The sharpest drop — 16 percent year over year — happened in major cities with populations of more than 1 million.
High borrowing and construction costs, combined with affordability pressures, are contributing to the pullback in building, even in suburban and rural markets, which previously had helped to offset weakness in other parts of the country.
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📉As listings pile up, DFW home prices keep falling
There were more home sales in the 13-county Dallas-Forth Worth Metroplex last year — but they were at lower prices. The median sale clocked in at $399,900, down 1.7 percent year over year, per TRD Data’s analysis of on-market residential sales.
What this means: Demand is still there, but the market is continuing to balance out after prices soared in the immediate aftermath of the pandemic. There also is a lot of inventory in the region, which can help buyers negotiate.
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🏠Home ownership is a better financial move after six years
Deciding whether to rent or buy is a huge decision, but if a would-be buyer can commit to staying in a home for a solid chunk of time, it ultimately pays off to buy.
Zillow analyzed just how long a buyer would break even after purchasing a home compared to renting, assuming a 5 percent or 20 percent down payment for the median home valued at $368,720. The results? In about six years, it’s worth it, even amid other property-owning costs. And the savings get even better as time goes on.
There are definitely caveats: It’s still tough for many prospective homeowners, especially young ones, to come up with down payments, and interest rates are still high. It also matters — a lot — where a buyer chooses to put down roots. In New York, the break-even day would come after 12.5 years of ownership; in Columbus, Ohio, it would take a cool 4 years.
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🗺️Map of the Week
Gary Barnett’s Extell Development has been slowly piecing together a Park Avenue development site for the firm’s next big project. Explore Extell’s latest buys in the area in The Real Deal’s interactive map.
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🗣️ ICYMI
Real estate data giant CoStar is gobbling up another firm in the space: Zonda, which provides a proprietary, lot-level database and development activity to its 3,000 customers that range from large residential builders like Lennar and Toll Brothers to lenders. The price tag is $800 million for the all-cash deal, which is slated to close later this year.
💸Big Deals
The top NYC sales of the week
🏆 Commercial: The biggest commercial sale to hit records was a Columbus Circle office building at 250 West 57th Street for $275 million. An LLC of Empire State Realty Trust sold the property to Igal Namdar’s Namdar Realty Group. This 26-story building measures around 540,000 square feet. The mixed-use, retail-and-office building is about 85 percent leased, with T.J. Maxx as the main retail tenant.
🏆 Residential: The top recorded home sale in New York was on the Upper West Side. Kenneth and Susan Hahn scooped up a sponsor unit at Extell Development’s 50 West 66th Street for just under $24 million. The condo measures about 3,400 square feet, pricing the sale at roughly $7,100 per square foot.
🧠Stat of the Week
The FIFA World Cup is officially underway across North America, but for many fans in U.S. host cities, attending a match could cost a month’s housing payment.
A new PropertyShark analysis found that in five of the 11 host cities, the cheapest tickets — for games during the knockout stage — cost at least one month of mortgage or rent. By the final in New York on July 19, the cheapest ticket is $7,256 — equal to 1.8 months of the area’s average mortgage payment, or 1.5 months of rent.
Thoughts? Questions? What would you like to see us cover? Send us a message at mary.diduch@therealdeal.com.