Home sales’ November decline was largest in 10 years
The evidence keeps pouring in: Fewer sales. More days on the market. Fewer bidding wars. Fewer offers above the asking price. Yes, the housing market is continuing its about-face. Home sales dropped 35.1 percent year-over-year in November, according to Redfin — the largest drop recorded by the brokerage since it began tracking sales in 2012. There were other signs of a cooling housing market in Redfin’s report. The median home sale price increased by only 2.6 percent from a year earlier, the smallest gain since May 2020, when several pandemic-related factors set the market ablaze. New listings dropped precipitously, falling 28.4 percent year-over-year. Outside of April 2020, when the market paused during pandemic shutdowns, it was the largest decline in new listings ever recorded by Redfin. Redfin attributed the decline in sales to a mortgage rate surge, which has reversed a bit, giving hope to prospective buyers and sellers. The average 30-year fixed mortgage rate exceeded 7 percent in November, but has sunk back to about 6.5 percent. The Federal Reserve slowed interest rate hikes in December, but the inflation battle isn’t over, which could keep mortgage rates swinging wildly depending on the Fed’s actions, bond yields and various economic indicators. “We have a ways to go until we reach recovery mode, and we may see sales continue to ebb in the short term,” Redfin’s Chen Zhao stated. Among U.S. markets, year-over-year home sales dropped the most in Las Vegas. San Jose, in the notoriously tight Silicon Valley housing market, was the only other city where sales fell by more than 50 percent. San Jose was also one of 11 metros with year-over-year declines in median sale price; San Francisco’s fell the furthest. Sales in which a Redfin agent reported at least two competing bids accounted for 40.4 percent of the total, a steep decline of 27 percentage points year-over-year. The share of homes sold above the listing price fell 18 percentage points to 26.4 percent. And buyers in November had more time to act, as homes’ median number of days on the market rose to 37 from just 22 a year ago. A separate report from House Method calculated the median number of days on the market for major metro areas. Sales were slowest in Greenville, South Carolina, in October: 85 days. Other markets in the top 10 included Palm Bay, Florida (67), Chicago (61), New York City (57) and Miami (54).
RXR abandons plan for $345M proptech SPAC
One group of proptech investors is getting a refund before the holidays. After nearly two years, Scott Rechler’s RXR has pulled the plug on plans for a SPAC to merge with a proptech company and will return $345 million to would-be shareholders. RXR Acquisition Corp. will cancel its public shares on Dec. 20, ahead of the March 8 deadline to either merge with a target company, or return shareholders’ investment, the company disclosed in a filing with the Securities and Exchange Commission. The real estate firm framed the outcome as a positive, saying it had resisted acquiring startups that seemed promising but whose valuations subsequently collapsed. Last week, a shareholder vote expedited the liquidation of RXR’s special purpose acquisition company, which had searched for a proptech company to turn into a publicly traded company. An RXR spokesperson said by email that it had “several opportunities to acquire various startups with strong business models and momentum,” but considered their valuations to be too high. “RXR will continue investing in and partnering with innovative protech companies,” the spokesperson said. The developer and landlord is an investor in the parking startup Metropolis, lease management platform VTS, ghost kitchen startup Kitchen United, office management firm Eden and smart-glass maker View. Shareholders whose funds are held in RXR Acquisition’s trust account “will not need to take any action in order to receive the redemption amount” of $10 per share, according to a company press release. The company’s investors may be glad no merger took place. The stock prices of various proptech startups have fallen dramatically Opendoor stock is down 90 percent this year. Digital title insurer Doma recently laid off 40 percent of its workforce. RXR’s SPAC proptech reversal is not the first. Last summer, the Chera family failed to raise enough cash to merge with proptech firm Brivo. For a time, however, there was plenty of enthusiasm. After RXR Realty, which controls 26 million square feet of office space in New York City, announced in early 2021 that it would seek $250 million for a SPAC, that amount grew to $345 million. While SPACs have largely fallen out of favor and many proptech startups have struggled this year, some investors still have an appetite for the sector. Venture capital firm Fifth Wall recently announced it had raised $866 million for its latest proptech fund, the largest-ever dedicated venture fund of its kind.
Eric Adams eyes big changes for Fifth Avenue corridor
Adams announced a “major new visioning process” to make Fifth Avenue between Bryant Park and Central Park more pedestrian friendly, Gothamist reported. The mayor called the plan for the stretch from around 42nd to 59th streets an “unmissable opportunity” to “help create vibrant central business districts.” The announcement came on the heels of an Open Street holiday program, which opened up part of the avenue to pedestrians each of the past few Sundays. The upper portion of the Fifth Avenue corridor — 49th Street to 60th Street — recently reclaimed its No. 1 spot on Cushman & Wakefield’s list of the world’s most expensive retail districts. Annual rents in the district averaged $2,000 per square foot, up 14 percent from pre-pandemic levels. Rents among prime retail districts across the globe declined by a cumulative 13 percent at the height of the pandemic and remain 6 percent below pre-pandemic levels. Adams’ stated goals announced with the plan include expanding green space, planting trees, enhancing lighting, increasing pedestrian space, improving street safety and prioritizing sustainable and mass transit options. Community leaders will contribute as part of a vision plan steering group. The city’s Economic Development Corporation and Department of Transportation will tap a design firm to kick off the reimagining of Fifth Avenue next year. The construction plan is expected to take two years.
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