Pending Home Sales Crash - Will Commercial Follow?

Pending Home Sales Crash - Will Commercial Follow?

Author: Michael Zuber June 5, 2024 Duration: 21:57

In this episode, we discuss the surprising drop in pending home sales with Jonathan Twombly, a commercial real estate expert. Despite predictions, pending home sales have significantly declined, prompting a deeper look into both residential and commercial real estate markets. We explore the impact of rising interest rates, the behavior of cash buyers, and the significant differences between residential and commercial real estate transactions. Jonathan provides valuable insights into the current market conditions, potential future trends, and strategic advice for navigating this challenging environment.

  1. [00:00:00] Introduction to the significant drop in pending home sales: Expected -1%, actual -7.7%.
  2. [00:01:11] Impact of interest rates above 7% on residential demand and the broader market.
  3. [00:01:36] Comparison of interest rate impacts on residential versus commercial real estate.
  4. [00:03:03] Challenges in commercial real estate: Reduced buyer willingness and high seller price expectations.
  5. [00:05:05] Difference in cash transactions between residential (30%) and commercial real estate.
  6. [00:06:50] Importance of 30-year fixed-rate mortgages in residential versus short-term covenants in commercial.
  7. [00:07:42] Commercial real estate's dependency on NOI (Net Operating Income) and cap rates for valuation.
  8. [00:10:29] Current market conditions: Volume of sales at a four-year low, reflecting early COVID-19 levels.
  9. [00:14:00] Impact of new Class-A apartments on the rental market and the misconception about Class-B and C properties.
  10. [00:18:11] Discussion on the differences in market cycles between residential and commercial real estate.

Thank you for tuning into this insightful episode with Jonathan Twombly. If you enjoyed the discussion, please rate, follow, share, and leave a review. Your feedback helps us continue to provide valuable content. For more in-depth discussions and to stay updated on real estate trends, follow Jonathan on LinkedIn or visit the Apartment Investors Club. See you next time!



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Michael Zuber’s One Rental At A Time is for anyone who’s ever looked at real estate investing from a distance, intrigued by the possibility of financial independence but convinced their current schedule makes it impossible. This podcast dismantles that assumption by focusing on the steady, incremental approach that its title suggests. Instead of complex theories or get-rich-quick schemes, you’ll hear practical conversations about the tangible steps involved in acquiring and managing rental properties. The discussions stem from Michael’s own journey and the experiences of many others who have built a meaningful second income stream through this method. Each episode feels like a straightforward talk about turning a sidelined idea into a actionable plan, addressing the real balancing act between work, family, and building something for the future. Tuning into this podcast, you’ll find a grounded resource in the business and investing space, one that emphasizes how long-term holding and thoughtful acquisition can quietly reshape your financial landscape without demanding you upend your existing life overnight.
Author: Language: en-us Episodes: 100

One Rental At A Time
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