The real estate market is currently navigating a complex landscape influenced by significant immigration patterns depleting the housing inventory, fluctuating interest rates, and supply chain challenges. As one of the most dynamic sectors of the economy, real estate is reflecting a myriad of factors that go beyond traditional market indicators. Moisés Agami, CEO of Valor Capital, sheds light on these multifaceted influences, offering a unique perspective on how these elements intertwine to shape the current and future state of the market.
CLEARWATER, Fla., Feb. 5, 2024 /PRNewswire-PRWeb/ -- In September 2023 U.S. Customs and Border Protection (CBP) reported a 40 percent immigrant population increase compared to September 2021 and 18 percent compared to September 2022. (1) "Our country was founded on immigration, and it remains a key thread in the fabric of the country," notes Moises Agami, CEO of Valor Capital Real Estate Development. "Unfortunately," he continues, "The estimated statistical flow of an additional 7.5 million people through the U.S. borders has displaced Americans already scrambling for available affordable housing—that's more than the population of 33 U.S. states." Agami, acknowledges that there are factors that the public may not have considered. "What is affecting real estate today is the fact that there are not sufficient homes in the U.S. to satisfy current needs. One cause is illegal and legal immigration."
Impact of Immigration on Housing
Immigration plays a crucial role in the real estate market, particularly in regions experiencing a significant influx of new residents. In these areas heightened immigration contributes to a tighter housing inventory, leading to increased prices.(1) "Immigration is putting pressure on the need for housing, starting at the bottom of the housing pyramid, and will then displace housing going up the pyramid, increasing housing costs," notes Agami. When the population influx crowds into available housing inventory, the result is less housing, homelessness and vagrancy, he notes. "The homelessness problem we have is mostly a houselessness problem."
Interest Rates and Questionable Unemployment Reporting
The real estate market is significantly influenced by the fluctuation of interest rates, directly impacting housing affordability. Agami has noted that after comparing historical trends, mortgage rates are healthy, having been at 10% in the past and as low as 3% in recent years.(2) He questions if it's coincidental that the Federal Reserve, after previously printing a substantial amount of money and declaring an excess of cash, is now raising interest rates, leading to higher mortgage rates, increased unemployment, and reduced market liquidity.
Agami highlights that current reports suggest a low unemployment rate, yet the reporting methods appear to have evolved. Criticisms of the Bureau of Labor Statistics (BLS) data have emerged over time, raising concerns about the precision of survey results due to sample sizes, the methodology for seasonal adjustments, and the criteria used to classify someone as unemployed as opposed to no longer searching for work. Individuals who are technically without employment may not be included in the statistics if they do not fulfill all the specified conditions.(3)
"The temporary and seasonal jobs fluctuations as well as the [BLS] survey sizes and scopes seem to have changed and so the BLS reports may not be comparable to reports in previous years," notes Agami. "So, the reporting shows employment to be very strong and the Fed is using this to maintain high interest rates. But the job market is weaker than is being reported."
Florida Heating up the Market
Amidst the conflicting economic and political policy predictions, Orlando and Tampa are poised to heat up the real estate scene in 2024, according to Zillow's latest report.(4) The influx of new residents stimulating job growth has led to fast-moving new construction. The elevated property values in Florida stem from a burgeoning population and the scarcity of coastal land. In contrast, Texas, which is also experiencing a population influx, is maintaining lower property prices.(3) Agami highlights that Florida's surge in population is fueled by retirees and tax-friendly policies.
Economics and the Supply Chain
Economic policies wield major influence on the real estate market, capable of either bolstering or disrupting housing trends. "As interest rates remain up, the supply chain must use more expensive financing. Subcontractors, contractors and developers must borrow money at higher rates which affects selling prices and yields a slow-down of construction and new development. This aggravates the supply problem of homes on the market and the supply needs of a growing population," notes Agami.
Luxury Market Resilience
"The resilience of the luxury real estate markets is surprising. People that have more money are more willing to accept higher rates and payments; and they have confidence in long-term investments. They are floating mortgages now at higher rates and will refinance when the rates drop. They are taking a hit early to gain later," asserts Agami.
The current real estate market is a study of fluctuating tides, and each of these factors are intertwined with market fundamentals, influencing consumer confidence, investment strategies, and the overall health of the real estate sector. As for a crystal ball, the fact remains that the real estate market will need to adjust.
"It's a mixed bag. There is no one blanket answer for investment. If you cannot surf the turbulent seas, stay out of the water. If you know what you are doing, like Valor Capital, sail on and stay in the market – and deliver meaningful products that meet the needs of families desiring an improved lifestyle."
Valor Capital has six luxury real estate projects in its portfolio, with two already completed and four more underway at different phases of development. These projects include:
- The SkyView in Clearwater, Florida
- Serena By the Sea, located in Clearwater, Florida
- Serena By the Sea Residences, also in Clearwater, Florida
- A forthcoming development in Clearwater, Florida
- An upcoming project in St. Petersburg, Florida
- A new development planned for Daytona Beach Shores.
About Valor Capital
Valor Capital is a team of entrepreneurs passionate about creating world-class real estate experiences. They are an affiliate: a new venture spinoff of international development firm, Terra Capital Partners S.A. de CV (Terra Capital Partners). With a four-decade history of real estate developments in office, hospitality, medical, commercial, and luxury residential product offerings — and a multi-billion-dollar portfolio and tens of millions of square feet already developed and sold — Valor's developments are always on the cutting-edge, with proprietary antiviral engineering design used throughout the firm's newest developments. Visit http://www.valorc.com.
About Moisés Agami, CEO, Valor Capital
Entrepreneur Moisés Agami took his first company public at the age of 25. His global businesses are built on cutting-edge technology, like Valor Capital that was formed in 2010, when Agami incorporated his technological and quality-assurance acumen to team up with a group of entrepreneurs who have a four-decade history of real estate developments with tens of millions of square feet in office, hospitality, medical, commercial and luxury residential product offerings. Valor Capital has truly revolutionized the industry with its "safety and wellness-based" engineering, focusing on building design features that maximize personal well-being. Agami enjoys finding real estate "gems" that are not currently on the monetizing radar of the average real estate mogul. He has facilitated several high-profile luxury projects along the Gulf Coast of Florida with future sights set on North Carolina, and Texas, where he can lead the way for other developers and entrepreneurs. https://valorc.com/
References:
1. Staff Writer. "Final FY23 Numbers Show Worst Year at America's Borders – Ever", US Department of Homeland Security, 26 October 2023, homeland.house.gov/2023/10/26/factsheet-final-fy23-numbers-show-worst-year-at-americas-borders-ever/.
2. Saphir, Ann. "US 30-Year Mortgage Rate Drops to 6.83%, its Lowest Since June", Reuters, 20 December 2023, reuters.com/markets/us/us-30-year-mortgage-rate-drops-683-its-lowest-since-june-2023-12-20/.
3. "How Does the US Government Gather the Monthly Jobs Report?" USAFacts, USAFacts, 7 Apr. 2023, usafacts.org/articles/how-does-the-us-government-gather-the-monthly-jobs-report/
4. Torres, Jennifer. "Two Florida Cities Among the Hottest Real Estate Markets for 2024", Gulf Live, 12 January 2024, gulflive.com/news/2024/01/two-florida-cities-among-the-hottest-real-estate-markets-for-2024.html#:~:text=Orlando%20and%20Tampa%20are%20poised,according%20to%20Zillow's%20latest%20report.
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SOURCE Valor Capital
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