THE WEEK IN REVIEW

Welcome to my weekly newsletter featuring a personal note on the ever-evolving world of real estate along with a few news-worthy updates. Enjoy!

Wait-And-See Market

What a crazy market we are in.... predictions, summaries and recommendations are awfully precarious. Everyone reacts differently to what this moment means for real estate. To over-simplify things, right now I am seeing three basic buyer profiles:

1.  The buyer who has been compelled to stop the buying process as they have lost too much: wealth in the markets, margin calls, fear of losing a job, or business slowdown.

2.  The buyer who sees this as an opportunity to buy now before prices (and possibly interest rates) rise again. They know inflation remains sticky and may head higher. They may feel more comfortable placing their capital in a hard 'safe haven' asset like real estate, recognizing that real estate remains a great hedge against inflation.

3. The buyer who simply wants to press the pause button to see how all of this market turbulence plays out. They may be unwilling to liquidate stocks that have dropped dramatically in value in order to buy. And some may prefer to put their capital into the markets where they see buying opportunities and potential upside.

I know how to handle a buyer's market and I know how to handle a seller's market. But the 'wait-and-see market' may be the trickiest to handle. I know of buyers pressing the pause button to see if the turbulence snowballs, tapers or recovers. Often wealthier buyers have the luxury of waiting, while others have to or want to keep moving.

I encourage my buyers to look at the long term, to be reminded of  real estate as a hard 'safe haven' asset, and that you need a place to live. Moreover, higher inflation also raises replacement costs, rents and interest rates. I'm not dismissing the concerns many have as unfounded. Sometimes a bit of a breather works better for some. We all have a different threshold for risk!  

real estate & the news

• Bridgewater founder Ray Dalio is concerned that the global monetary system could break down.  New tariff policies and growing U.S. debt are contributing to a new unilateral world order, and the fallout from turmoil in bonds could be a more severe shock to the monetary system than the 2008 financial crisis. (CNBC)

• 17% of buyers purchased homes suitable for multigenerational living in order to cut costs, tend to aging parents, or house adult children..... up from 14% a year ago.

  (NY TIMES)

• Baby boomers accounted for 42% of U.S. home sales between July 2023 and July 2024, topping millennials, who accounted for 29%. The share of Gen-Xers (ages 46 to 60) remained steady at 24%, while Gen Z-ers (ages 14 to 25) made up just 3% of buyers. (NAR)

• The US's goods trade deficit swelled to a record $1.21 trillion by 2024. At the same time, the U.S. services trade surplus grew to $295 billion last year, up from $77 billion in 2000, a stark reversal from the mid-20th century, when the U.S. was a manufacturing giant and had a goods export surplus, but had a services trade deficit. Software and financial products became major U.S. exports. (WSJ)

around dc

ANNIE

AT THE NATIONAL THEATRE

Classical musical Annie makes a National Theatre return this spring. Annie, directed by Jenn Thompson, features the iconic book and score, written by Tony Award®-winners Thomas Meehan, Charles Strouse and Martin Charnin. This celebration of family, optimism and the American spirit remains the ultimate cure for all the hard knocks life throws your way. Shows conclude on Easter Sunday! Get tickets here.

Lee Arrowood

Principal, Arrowood Advisory at Compass

M: 202.251.3175

O: 202.448.9002

lee.arrowood@compass.com

+$173M Sold In 2023

#3 Team Lead 2022