March 07 2025

Reef Daily

Reef Daily | March 07 2025

Housing Market Update

Latest Market Data (March 7, 2025) The U.S. labor market showed signs of cooling in February, with nonfarm payrolls increasing by 151,000, slightly below the expected 159,000. This represents the first jobs report during President Trump's second term. The unemployment rate ticked up to 4.1%, higher than the anticipated 4.0%, while hourly earnings rose by 0.3% month-over-month, aligning with estimates. January's payroll figures were revised downward to 125,000 from the previously reported 143,000, indicating a slowing employment trend that could impact housing demand in coming months.

Mortgage applications surged dramatically this past week, with total application volume rising 20.4% compared to the previous week, according to the Mortgage Bankers Association. The MBA Mortgage Market Index climbed to 242.2 from 212.3, while the refinance index jumped substantially to 784.2 from 572.5, reaching the highest refinance share since mid-December. This significant increase in mortgage activity suggests homebuyers and homeowners are responding quickly to the recent favorable shift in interest rates.

Mortgage Rates

Current rates as of March 7, 2025:

Type	Today's Rate	Last Week's Rate
30-year fixed	6.66%	6.75%
15-year fixed	5.94%	6.04%
5/1 ARM	6.05%	6.17%

Future Forecasts The mortgage rate environment is experiencing volatility heading into the spring homebuying season. While Freddie Mac reported the 30-year fixed rate at 6.63% as of March 6 (representing the largest weekly decline since mid-September), there are indications of a potential reversal, with some sources reporting rates surged by 15 basis points on March 7. This fluctuation is likely influenced by recent economic data and policy uncertainties, creating both opportunities and challenges for buyers and sellers entering the spring market.

Notable Transactions

Commercial Highlights CADC VA-1 LLC purchased 523 acres at the intersection of Ladysmith and Bull Church roads in Caroline for $8.2 million from Ladysmith Investors, marking one of the largest land transactions reported in the past 24 hours. The same buyer also acquired 97 acres at 18188 Bazaar Ave. in Caroline for $7.3 million from The Virginia Bazaar.

Mid Eastern Co. completed the purchase of 6,000 square feet at 2395 Lanier Road in Goochland for $2,387,500 from North Park Lanier LLC.

In a significant industrial leasing transaction, Easy Stones subleased 38,145 square feet at 11900-11990 Northlake Pkwy., Building A, in Ashland. Brian Felton with Cushman & Wakefield | Thalhimer represented the tenant in this substantial space commitment.

Regional Activity A commercial building at 3115 KY HWY 698, Stanford, Kentucky is being auctioned today (March 7, 2025) by the US Department of the Treasury. The property consists of 28,396 square feet of vacant commercial buildings/flex space on a 21.12-acre lot with parking and frontage on Kentucky Highway 698.

Market Indicators

Inventory Trends The NAIOP Industrial Space Demand Forecast released today projects that industrial net absorption will slow to 52.2 million square feet in the first half of 2025 before accelerating in the second half to end the year at 156.4 million square feet of positive absorption. This forecast reflects increased uncertainty surrounding U.S. trade and fiscal policy changes and their potential impact on industrial real estate demand.

The industrial real estate sector is cooling following an intense expansion period driven by pandemic-induced demand for warehousing and e-commerce distribution. Despite this slowdown, demand for industrial space continues to grow, albeit at a more moderate pace than during the pandemic surge.

Regional Developments

Northeast In the Berkshire region, several notable transactions were completed recently, including the sale of a property at 46 Bow Wow Road for $3,024,000, representing one of the highest-value residential transactions in the area.

West The luxury market in Montecito, California is showing signs of significant strength. A seven-bedroom, 12.5-bathroom mansion in the area's coveted Riven Rock was listed for $36,500,000 on February 27, representing a substantial price increase from its previous sale at $19,100,000 in 2021.

South The report released today regarding industrial space demand specifically highlights that the South experienced a 6.8% year-over-year increase in sales in 2024 compared to 2023, demonstrating stronger growth than other regions of the country.

The commercial real estate market in Richmond, Virginia remains active, with TTT Investment Group leasing 2,832 square feet at 5114 Richmond Henrico Tpke. in Henrico, and Jungle Smoke leasing 1,700 square feet at 7340 Forest Hill Ave. in Richmond.

Midwest A commercial building at 2809 W. Court Street in Flint, Michigan is scheduled for online auction on March 27, 2025. The 3,324 square-foot general market/commercial building sits on a 0.28-acre lot with parking and was built in 1954.

Sources

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