The ratio of money banks lent out compared to property value dropped to 51% LTV this spring, a 30-year low in commercial mortgages.
Home Prices
On a year-over-year basis, the home price index rose 0.7% in March, down from a 2.1% annual rate the prior month. The annual increase was the smallest since May 2012.
Office REITs
Office REIT stock prices posted a 48% decline since the start of 2020. Over that same period, the S&P 500 index is up 37%.
Extended Stay
Extended stay hotels remain an enduring bright spot for a hospitality industry that was rocked by the pandemic. These properties had an occupancy rate of 74.7% last year, significantly higher than overall hotel occupancy in the U.S., which reached 62.6% in 2022.
Share Buybacks
Companies in the Russell 3000 have unveiled plans to buy back more than $600 billion in shares this year, in line with last year’s record pace. In all, they announced $1.27 trillion of share repurchases and completed $1.05 trillion in buybacks in 2022, both all-time highs.
Small Bank CRE
Banks with less than $250 billion in assets account for 29.9% of the nearly $1.5 trillion in commercial real estate debt is maturing by the end of 2025.
SBA Lending
The Federal Reserve’s rate-raising campaign has put a notable crimp in financing for companies with smaller payrolls and valuations. The average rate for a loan from the U.S. Small Business Administration, which historically costs less than a bank loan, has reached double-digits, driving many small firms to borrow less.
Home Prices
The national median existing-home price fell 1.7% in April from a year earlier to $388,800, the biggest year-over-year price decline in eleven years. Median prices were down 6% from a record $413,800 in June.
Office Transactions
The total value of office property bought by investors in the first quarter of this year was $10.7 billion, down 68% from the same period last year.
Office Leasing
U.S. office leasing volume fell to 38.5 million square feet in the first three months of 2023, the third consecutive quarter of slowing demand and a 9.8% decline from Q4 2020. Leasing activity was also 10.7% less than was recorded in Q4 2022.