1) How are Home Prices Still Rising??

Even though median home prices are near record highs, and mortgage rates are now above 7%, Zillow just predicted an increase in home prices through July 2024… Is this defying economics? What is happening here??

As we also mentioned last week, there is a massive supply issue in the housing market.

Here’s why housing prices could rise: 

• Inventories are still low! Last month saw a 3.3 month supply of housing inventory, still below the average 5-6 months in a healthy market

• After the great recession in 2008, home builders never fully recovered with new homes. Fannie Mae estimated the US is short 3.8 million homes!

• There’s still a strong buyer demand. The median sales price continues to rise, and 74% of homes are on the market for less than a month.

• Nearly 80% of all current homeowners still have mortgages below 5%. Those that do not need to move will probably not be trading up for a more expensive rate any time soon.

Key Insight→

More supply is needed for lower housing prices! With the majority of homebuyers locked in at rates below 5%, they’re going to hold on to those homes until forced to sell. It’s going to take a rise in sellers and/or new inventory to bring prices down, and Zillow believes it’s going to be a while.

2. Shopping Malls are Back.

While the death of shopping malls has been declared for years, research shows malls aren’t going anywhere. Top-tier mall occupancy is at 95% leased and traffic was up 12% in 2022, as compared to pre-pandemic times in 2019.

Why is there a sudden resurgence?

The digitally native Gen Z is leading the charge to physical shopping malls. 73% of Gen Z shoppers reported visiting a mall in the past month, as compared to 65% millennials and 48% Gen X.

Despite the claims, e-commerce has not killed in-person shopping.

95% of Gen Z shops online, and 97% also shop in person. Today’s mall shoppers are looking for experiences and a way to connect with their favorite brands in person.

Key Insight →

Gen Z is creating a shopping mall resurgence. While Gen Z loves shopping online, they are also proving that there’s nothing better than hanging out with your friends and having a slice of Sbarro pizza at the food court.

3. Cold Storage is So Hot Right Now.

An Atlanta startup, Envision Cold, recently raised $500M of capital to acquire and develop $1.5B of cold storage assets.

How does a cold storage startup raise $500M? It likely helps that Envision’s founder ran M&A at Americold, one of the leaders in the cold storage space. He probably knows a thing or two about the space.

Here’s what we know. Consumers today are demanding more fresh, healthy food options and ordering more online groceries.

Here are three fun frozen food facts:

• E-commerce grocery sales are expected to reach 21.5% by 2025.

• Frozen food sales reached $72B in 2022, and that number is expected to grow.

• Approximately 13% of frozen food is lost due to the lack of cold storage in the supply chain.

Key Insight →

Our love of fresh and frozen goods is accelerating demand for cold storage and logistics. With online grocery sales surging, there’s a need for cold storage and transportation. How else do you think your pint of Ben & Jerry’s travels across the country and stays frozen?