5 at 5: Your Daily Digest for Real Estate Investing, 12/30/2020

5 at 5: Your Daily Digest for Real Estate Investing, 12/30/2020

Home sales slide but still soar while prices go in one direction, office space woes continue, commercial space below residential living also in question, and hotel REIT hosts an investor’s object lesson.

In Today’s News

Pending Home Sales Slide 2.6{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} in November

The National Association of Realtors (NAR) says that pending home sales declined in November across the country, but sales are still well above this point last year.

Why it matters: It’s the third-straight month this measure of sales activity has dipped, but the NAR says inventory has a lot to do with the decline. Record-low interest rates are driving demand, which doesn’t appear to be changing anytime soon.

Redfin Says Home Prices Soar, Inventory at Record Low

Redfin (NASDAQ: RDFN) says the national median home sale price soared 14{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} in a year to $320,714, inventory is at an all-time low, and 39{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} of listed homes had an accepted offer within two weeks, compared with 26{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} at this point last year.

Why it matters: Again, by all measures, this is a very hot housing market, despite the pandemic. How long it will last is anyone’s guess, but now is a great time to sell and maybe a good time to buy if you can find an investor’s bargain right now.

COVID-19 Vaccine Has Some Dusting Off the Return-to-Office Plans

The Wall Street Journal [subscription required] says commercial landlords are hoping the vaccination campaign launched in the U.S. this month will lead to millions of people returning to workplaces in 2021 after spending most of the pandemic working from home.

Why it matters: It’ll be well into 2021 before herd immunity is close enough to allow reoccupation, and even then, that reoccupation will look quite different. But it’s a start.

Today on Millionacres

What’s Happening to Residential Buildings With Retail Space?

Millionacres’ Maurie Backman takes a look at a segment of the CRE business that’s being hurt in its own unique way: residential buildings that have first-floor retail space.

Why it matters: Those empty retail spaces can make it more difficult to rent or sell the living space above them, which could compound woes for investors in such space in many central cities.

Where Will Host Hotels & Resorts Be in 3 Years?

As one of the largest lodging real estate investment trusts (REITs) in the world, Host Hotels & Resorts (NYSE: HST) is a good way to play a recovery in the hotel sector. However, investors need to understand the risks here before buying this stock.

Why it matters: Millionacres’ Reuben Gregg Brewer points out how a lasting drop in business travel and a slow recovery from the pandemic will keep things tough for Host and other hospitality property owners — and this malaise may well not be temporary. Investors should realize that while a turnaround is likely, it’s not imminent.

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