Fed's indecision stalls housing market 🏡

Today’s top stories…

• The housing market's stuck in limbo as the Fed plays "will they, won't they" with rate cuts

• Immigration's impact on real estate: a $5.4 trillion elephant in the room

• Airbnb alums bring their data protection A-game with Teleskope

• 💰 Deal of the Day!: 2 bd | 2 ba | Mountain City, TN

Today’s mortgage rate (30 Yr. Fixed): 7.51%

The Fed's Rate Cut Tango

The Fed's been playing "will they, won't they" with rate cuts, leaving the housing market in limbo. Mortgage rates are climbing, with 30-year fixed-rate loans hitting 7.17% in late April because the Fed's been dragging its feet on rate cuts until inflation improves. If rates stay high, expect a gridlocked resale market. New construction might fare better, with builders buying down rates to keep things moving.

High prices and borrowing costs are stretching first-time buyers thin. In March, the median home list price was a whopping $424,900. But it's not all doom and gloom. More homes are hitting the market, which could boost sales as buyers have more options.

Experts predict the Fed will cut rates twice this year, but likely not until September at the earliest. It all depends on inflation data. So, what's an investor to do? Keep an eye on those inflation numbers. When they start trending in the right direction, expect mortgage rates to follow suit. In the meantime, get creative with your strategies. Look for deals where you can buy down rates or find motivated sellers willing to negotiate. And don't forget about the long game - even if the market's in a holding pattern now, the right investment could pay off big down the line.

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⏰ Quick Tips

You asked. I answered.

Should I invest in my local market or out-of-state?

The decision to invest in your local market or out-of-state depends on several factors, including your investment goals, risk tolerance, and familiarity with the market. Investing locally allows for easier property management and a better understanding of market conditions but may limit your investment opportunities. Out-of-state investing can provide access to higher-yielding markets and greater diversification but comes with challenges such as distance management and unfamiliarity with local laws and regulations. Consider partnering with a local property manager or investing in turnkey properties to mitigate some of the risks associated with out-of-state investing.

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Immigration's $5.4 Trillion Impact on Real Estate: Embrace the Change

With record numbers of migrants entering the U.S., it's a hot-button issue that could have big implications for your bottom line.

First, the facts: immigrants living in the U.S. hold a collective $5.4 trillion in housing wealth. When they move into a community, demand for housing goes up, driving home values and rents higher. A 1% increase in a metro's population due to immigration correlates with a 0.8% increase in both rent prices and home values. And in surrounding metros, the effect is even more pronounced, with a 1.6% increase in rents and a whopping 9.6% increase in home prices.

But it's not just about the numbers. Immigrants also stabilize prices in areas of decline, revitalizing communities that were once deemed undesirable. From the Bronx to the suburbs of Atlanta, immigration has prevented population decline and kept housing markets afloat.

Of course, there are valid concerns about the strain on taxpayer-funded resources. Cities like Denver and New York are struggling to provide services for the influx of new arrivals. But studies show that immigrant tax contributions often exceed their consumption of benefit programs. And given the upward mobility rates for children of immigrant families, many see the cost as an investment in the future.

Then there's the myth that immigrants steal jobs from U.S.-born workers. In reality, immigrants are more likely to start businesses and create job opportunities. They also fill critical labor shortages, particularly in the construction industry. Without immigrant workers, we could see even higher housing prices in supply-constrained areas.

So, what does all this mean for real estate investors? Keep an eye on immigration trends when making investment decisions. Look for opportunities in areas experiencing an influx of new arrivals, particularly in surrounding metros. And don't buy into the fear-mongering about the economic impact of immigration. The evidence shows that it's ultimately a net positive for the housing market and the economy as a whole.

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Airbnb Alums Bring Data Protection Magic with Teleskope

Teleskope, a startup founded by Airbnb alums Julie Trias and Elizabeth Nammour, recently announced a $5 million seed investment led by Primary Venture Partners, with participation from Lerer Hippeau, Plug and Play Ventures, and Essence VC. The company aims to bring intelligence and automation to data protection, addressing the challenges Trias and Nammour experienced firsthand while working on Airbnb's data team.

Existing data protection solutions, such as data classification tools, often generated false positives and had scaling issues. Teleskope's solution enables customers to connect to various data sources, identify sensitive data across multiple data stores automatically, and isolate or delete it when necessary. The company currently caters to data teams, including data governance engineers, who need to clean up entire datasets in their data warehouse, prepare datasets for model training, or delete user data for compliance purposes.

Teleskope's solution relies on "a pipeline of models," with different models tailored to specific data types, such as natural language, structured tabular formats, code base files, and log files. Despite their background and expertise, Trias and Nammour initially struggled with pitching to venture capitalists, as they were unfamiliar with the VC world and its terminology. However, they refined their presentation over time and found investors who understood their vision.

The seed funding will help Teleskope further develop its automated data protection tool and expand its customer base. As data sprawl continues to grow, solutions like Teleskope's will become increasingly essential for businesses to maintain data safety and compliance.

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💰 Deal of the Day!

Price: $373,000

Address: 110 Arney Ln, Mountain City, TN 37683

This cabin would make an excellent vacation rental due to its peaceful mountain setting, cozy and inviting interior, and convenient location near popular outdoor destinations, offering guests a comfortable and memorable getaway experience while providing the owner with a turnkey investment opportunity.

Airdna data:

Estimated monthly payment: $2,716/month (if financed)

Estimated monthly revenue: $2,243/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

Thanks and see you tomorrow!

✍️ Brett