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Happy Friday! Today’s top stories…
Brr-ctic blast drives January STR occupancy down
What $1M buys you in top cities
Crypto real estate platform parlays points into $160M payout
🔥 Deal of the Day! 🔥: 3 bd | 3 ba | Shandaken, NY
Today’s mortgage rate (30 Yr. Fixed): 7.10%
Chilly Temps Put January Bookings On Ice
A blast of arctic air put the freeze on US short-term rental demand in January, leading key performance metrics to decline against the same period last year. Revenue per available room dipped 6.6% while occupancy fell by a wider 7% margin as frosty temperatures kept travelers huddled at home.
The pullback comes even as the broader jobs market continues running hot. Employers added a stronger-than-expected 353,000 positions in January, while the unemployment rate held at 3.7% for the third straight month. However, inflation data proved less favorable as consumer prices jumped 6.1% from last year, dashing hopes for near-term Fed rate relief.
Nationwide supply took a significant hit as well, contracting by nearly 73,000 units between December and January. Many owners likely pulled listings due to the weather impacts on demand. Mountain and lake area availability saw especially sharp declines, nearly triple the same period last year. Slowing performance combined with rising mortgage rates also continues deterring new investors, as new listings posted the lowest monthly tally since February 2022.
With supply seeing an uncommonly large winter contraction, investors should watch for potential value plays on solid assets in temporarily slowed seasonal markets. The outsized January decline could signal that the annual low point for listings has simply started a month early this year.
$1M Global Homes Could Fit Inside A Parking Spot
Prime property prices in top global cities are leaving even wealthy luxury buyers stretched thin. In the tiny but ritzy Mediterranean country of Monaco, $1 million only affords 16 square meters of prime real estate. For context, a typical one-bedroom apartment spans around 46 square meters. So a million dollars basically buys you a bedroom by Monaco standards. Over the past decade, resale transactions above $10.8 million in the principality have jumped by over 300%. And last year, more than half of all sales exceeded that rarified price threshold.
Other Asian hubs like Hong Kong and Singapore deliver nearly as little bang for the million buck as well. $1 million only secures 22 (~235 sq/ft) and 32 square meters respectively in those cities. Yet crossing the Pacific, New York and Los Angeles provide relatively better value among top-tier US luxury markets. The same $1 million fetches 34 and 38 square meters in those two cities.
As the global wealth gap continues widening, prime property is becoming ever more concentrated in the hands of elites. The top 1% of US households now boast a minimum net worth of $5.8 million. With liquid luxury assets in increasingly short supply, opportunistic real estate investors should watch for off-market deal flow in up-and-coming luxury markets before appreciation pricing spreads more broadly.
Parcl Points Become $160 Million Token Pile
WARNING: This one is a bit technical for those of you who are interested in learning more about the intersection between crypto and real estate…
A Solana-based real estate trading platform called Parcl plans to convert user-earned points into tokens this April, setting the stage for a potential $160 million payday. The protocol lets traders bet on residential price movements across 10 US markets with up to 10x leverage. It has already seen $210 million in volume since upgrading its platform last November.
Parcl launched a points program in mid-December, drawing a swell of interest from airdrop farmers seeking the token payout. Crypto deposits on the site jumped from $7,000 to $73 million over that span. And when the team finally confirmed the April conversion, another $25 million flowed in overnight.
The platform also provides a clever tool for homeowners to hedge their property value. By shorting their local market, they could offset any price declines on their primary residence. To enable the leverage trading, liquidity providers play the role of bank - taking fees but risking losses if traders win out over time. Current rates sit at a modest 0.07%.
The PRCL governance token supply will total 1 billion, with 7-8% set aside for the airdrop. With the token already trading at $2 privately, Parcl floats a fully diluted value over $2 billion. Supply will likely land around 10-12% of that figure at launch, priming the protocol to be the next overnight DeFi darling.
Not investment advice. Invest at your own risk. :)
🔥 Deal of the Day! 🔥
Price: $545,000
This chalet makes an ideal vacation rental due to its unique blend of seclusion next to over 2,200 acres of protected land, providing direct access to the natural beauty of the Shandaken Wild Forest and the Catskills, along with modern upgrades, fully furnished turnkey convenience, and proximity to dining, skiing, and hiking amenities, offering both a serene retreat and an adventurous escape.
Airdna data:
Estimated monthly payment: $3,809/month (if financed)
Estimated monthly revenue: $3,841/month
Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.
See you Monday! Have a great weekend!
✍️ Brett