February 18 2025

Reef Daily

Reef Daily | February 18 2025

Housing Market Update

Latest Market Data (February 18, 2025)
National home price growth slowed to its weakest pace since June 2023, with year-over-year appreciation at 3.3% as of January 2025, according to the First American Data & Analytics Home Price Index. Month-over-month growth remained stagnant at 0.1%, reflecting continued pressure from elevated mortgage rates and rising inventory levels. Despite this slowdown, home prices remain 54.8% above pre-pandemic (February 2020) levels.

Builder confidence plummeted to a five-month low, with the NAHB/Wells Fargo Housing Market Index dropping to 42 in February from 47 in January. All subcomponents declined sharply: current sales conditions fell to 46, buyer traffic dipped to 29, and six-month sales expectations collapsed to 46. This marks the first time since September 2024 that the index has fallen below the expansion-contraction threshold of 50.

Inventory Trends
Housing supply showed renewed momentum, with Realtor.com reporting a 25% year-over-year increase in active listings as of February 2025. Weekly data indicates new listings grew at double-digit rates nationally, particularly in major metros like Washington D.C., where economic uncertainty is prompting earlier-than-normal seller activity. The national months’ supply of homes edged up to 3.2, creating more balanced conditions compared to 2024’s record-low inventories.

Mortgage Rates

Type	Today's Rate	Last Week's Rate
30-year fixed	6.97%	6.94%
15-year fixed	6.27%	6.23%
5/1 ARM	6.26%	6.31%

Note: Rates reflect minor week-over-week improvements following January’s inflation data, though market expectations now price in fewer Fed cuts for 2025.

Notable Transactions

Commercial Highlights
While no nine-figure transactions closed in the past 24 hours, portfolio sales dominated regional markets:

N B G Investments LLC acquired a six-property portfolio in Owensboro, KY, for $400,000 total consideration across 15 parcels, including former church properties at 320 Clay St and 420 E 3rd St.
REC Hopkinton LLC purchased 73 West Main St in Hopkinton, MA, for $500,000, adding to its New England retail portfolio.

Regional Activity

Northeast: 343 Wood Street in Hopkinton, MA, sold for $790,000, reflecting continued demand in Boston-adjacent suburbs.
South: Louisville saw multiple mid-tier transactions, including 2204 Belmont Dr ($168,900) and 5124 Diamond Dr ($275,000), signaling stable demand in Kentucky’s urban corridors.
West: Irvine’s luxury market remained active with The Royce Park Place (520 units) trading hands in December 2024 for $247.5 million, though no new major deals closed yesterday.

Market Indicators

Pricing Dynamics
Zillow’s analysis of 10 million transactions revealed homes sold off-MLS underperformed by 1.5% nationally ($4,975 median loss), with California sellers leaving $30,075 (3.7%) unrealized. The study confirmed lower-priced homes suffered most, with 44 states showing statistically significant discounts for non-MLS listings.

Luxury Market Resilience
First American’s tiered analysis showed luxury home prices (+4.8% YoY) outpaced starter (+2.0%) and mid-tier (+3.9%) segments in 25 of 28 tracked metros. Cambridge, MA, led with 9.1% annual luxury price growth, while St. Louis saw balanced gains across all tiers.

Regional Developments

Canada Exception
Canadian markets showed early volatility, with January 2025 MLS new listings surging 11% month-over-month—the largest seasonal adjustment increase since the 1980s. Sales fell 3.3% amid U.S. tariff uncertainty, particularly impacting British Columbia and Ontario markets.

West Coast Listings Surge
San Francisco Bay Area inventory jumped 18% year-over-year, driven by tech sector relocations and hybrid work policies. Ethos Real Estate’s $252.4 million acquisition of Hillsdale Garden (697 units) in San Mateo closed yesterday, marking 2025’s largest West Coast multifamily deal.

Sources

This newsletter is for informational purposes only and should not be considered as financial advice.