March 25 2025

Reef Daily

Reef Daily | March 25 2025

Housing Market Update

Latest Market Data (March 25, 2025) The U.S. Census Bureau and Department of Housing and Urban Development jointly released new residential sales data today showing February 2025 new home sales reached a seasonally adjusted annual rate of 676,000, representing a 1.8% increase above January's revised rate of 664,000 and a 5.1% rise from February 2024. The median sales price of new houses sold in February stood at $414,500, with an average sales price of $487,100.

Yesterday, NAR data revealed existing-home sales rebounded in February, increasing 4.2% from January to a seasonally adjusted annual rate of 4.26 million, though remaining 1.2% below February 2024 levels. Inventory levels continued to improve with available homes rising 5.1% from January and standing 17% higher than a year ago, though supply remains tight at just 1.24 million units nationwide (3.5-month supply). The median existing-home sales price reached $398,400 in February, up 3.8% year-over-year, marking the 20th straight month of annual gains.

First-time buyers are showing increased market participation, accounting for 31% of February's transactions, up from 28% in January and 26% in February 2024.

Mortgage Rates

Current rates as of March 25, 2025:

Type	Today's Rate	Last Week's Rate
30-year fixed	6.58%	6.74%
15-year fixed	5.77%	6.00%
5/1 ARM	6.55%	6.13%

Notable Transactions

Commercial Highlights MSD Partners acquired the 36-story One Lincoln office tower in downtown Boston for $400 million in a foreclosure auction after the property attracted no bidders. The 1.1 million-square-foot tower is anchored by HarbourVest Partners.

Berkeley Partners and Invesco Real Estate launched a new joint venture targeting industrial assets, seeding it with a $45 million acquisition of four properties in Greater Boston's Route 128 belt. The portfolio consists of 217,000 square feet across properties in Norwood, Woburn, and Billerica.

UMH Properties acquired two age-restricted manufactured home communities in Mantua, New Jersey for $24.6 million. The properties, Cedar Grove Park and Maplewood Village, feature 266 developed homesites with 100% occupancy across approximately 38 acres and are strategically located near Philadelphia.

Regional Activity South Korea's Hyundai is set to announce a $20 billion investment in the United States, including a new steel plant. This major investment follows their previous commitment of $10 billion in U.S. investments announced in 2022.

Biogen signed a significant 585,000-square-foot lease at 75 Broadway St. in Cambridge, establishing their global headquarters in the first building of the 10-acre Kendall Common mixed-use project being developed by BioMed and MIT Investment Management Co.

Market Indicators

Inventory Trends The Census Bureau reported today that the seasonally-adjusted estimate of new houses for sale at the end of February was 500,000, representing a supply of 8.9 months at the current sales rate. This substantial inventory in the new home market contrasts with the tighter existing home market.

Investment Sentiment The Burns CRE Fear and Greed Index for Q1 2025, released yesterday, examines commercial real estate investor sentiment across multifamily, industrial, retail, and office sectors based on 1,064 market ratings. The report highlights location quality becoming increasingly critical, with one investor noting: "Never before have I observed location being more critical than now. Buyers/tenants only have so much dry powder, and they're only going to deploy it for A+ locations".

A new report released today indicates the U.S. Real Estate Appraisal Market is projected to grow at an estimated CAGR of 4.5% from 2025 to 2034, rising from $16.5 billion in 2024 to $25 billion by 2034.

Regional Developments

Northeast Boston's commercial market saw significant activity in the past 24 hours with major transactions totaling over $450 million, primarily in the office and industrial sectors. Additionally, several large lease signings indicate continued demand for quality office space despite broader market challenges.

Midwest Chicago's real estate market is experiencing a bifurcation between high-quality office space, which remains in demand, and lower-quality properties facing significant challenges. Top properties featuring advanced technology, premium workout facilities, and unique amenities are successfully attracting tenants while much of the rest of the market struggles with excess space.

South UMH Properties' $24.6 million acquisition of two fully occupied manufactured housing communities in New Jersey represents the company's strategic growth in the affordable housing sector. Following this acquisition, UMH's portfolio now encompasses 141 manufactured home communities with approximately 26,500 developed homesites across 12 states.

West The Los Angeles commercial real estate market saw equity REITs trade positively yesterday, with retail and industrial REITs showing particular strength following indications that upcoming tariffs may be more targeted than initially feared. The positive market sentiment helped lift the Equity REIT Index by 1.5% with 16 of 18 property sectors posting gains.

Sources

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