What I’m Reading
Running on Empty: Construction of entry level homes has been trailing off since the mid-1970s. In the early 1980s, the percentage of new homes constructed below 1,400 sf was roughly 40%. Today it sits below 10%. The combination of low supply and high demand in the space is causing entry level prices to increase at a rate exceeding that of the general housing market, a problem that is likely to continue. Freddie Mac
Fire Watch: Attorneys in Bloomberg Law’s 2021 Commercial Real Estate Bankruptcy Survey see office defaults catching up with retail and hospitality despite currently having little actual distress. This is consistent with our view that office headwinds will continue as harder hit sectors rebound, thanks largely to the longer term nature of leases and the more permanent headwinds of work from home. Bloomberg Law
Land Grab: Venture capital is pouring into single family property management, with investment targets often claiming to be tech, rather than real estate companies. The space has attracted at least $260MM in the past six years. Peter Lohmann
Slowdown: An increase in rates will lead to less refinancing’s this year for mortgage lenders. 2021 will still probably be a good year but off the torrid pace set in 2020. This is why non-bank lenders rushed to go public in 2020 – that was likely as good as it gets. The Real Deal
Healing: Sublease space is entering the office market this year at a much slower rate than in 2020, according to a new report from Cushman & Wakefield, and all signs are pointing toward a continued decline in growth. Globe Street
Chart of the Day
Treasuries have risen in yield but muni’s have barely budged. 
Source: Wall Street Journal
WTF
Shitty Aesthetic: A dispute between neighbors resulted in a front yard where several toilets are being used as planters because Florida. Wink News
Getaway Car: A man called a taxi to take him to a bank, had the driver wait outside while he allegedly robbed the place, then took the cab home from the scene of the crime because Florida. The Daily Beast
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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