👋👋 Good morning real estate watchers! Today, we are going to talk about...

1. Imagine touring your new affordable apartment, only to find a confessional in the closet. 'Oh, don’t worry, that’s just a throwback feature! Great for privacy...and for hiding from the landlord when the rent’s due.

2. Why prospective buyers are passing on today’s housing market faster than someone offered tickets to a Nickelback concert.

3. Rising mortgage rates aren't cooling the market, mostly because everyone has equity now, like some sort of bizarre Oprah giveaway: “You get equity! You get equity! But no one’s actually moving!”

Let’s go!

TOP STORY

HOLY HOMES

So, the Catholic Church wants to convert empty convents into housing. Makes sense—if they can turn water into wine, surely they can turn a chapel into a charming studio with utilities included, right?

In North America’s housing crisis, one unexpected player holds the key to a potential solution: the Catholic Church, the world’s largest real estate holder. With a portfolio spanning convents, churches, and other properties—many abandoned or underutilized—this institution has quietly become a pivotal player in the drive to expand affordable housing. As local governments scramble for solutions, church-owned properties are increasingly repurposed for much-needed shelter, underscoring the massive potential of this conversion trend.

Ottawa's recent example illustrates the trend well. The city recently acquired a former convent in Orleans and an expansive seminary property in Alta Vista, originally owned by religious organizations. These properties will soon house hundreds of asylum seekers and other individuals in need, offering a tangible response to the city’s staggering affordable housing shortfall.

Ottawa’s housing waitlist has climbed above 10,500, while rental prices have surged past $2,000 for a one-bedroom unit. According to the city council, securing these religious properties at reasonable rates was a rare opportunity. "It's a unique moment to repurpose spaces that already possess the infrastructure for housing,” said Marty Carr, Alta Vista’s councilor. “This initiative allows us to address urgent needs while preserving historical structures.”

This is far from an isolated example. Across the United States, the trend is accelerating as the number of religiously affiliated Americans has fallen, with church memberships declining from 70% to around 47% over the last two decades.

According to Eric Knowles, a real estate broker specializing in religious properties, many smaller churches cannot sustain their operations. “There are roughly 1,100 former churches currently on the market in the U.S.,” Knowles noted, emphasizing that while many are sold to other congregations, a growing portion is being eyed for housing. Often sold at favorable rates and with robust structural layouts, these buildings present unique opportunities despite challenges like rezoning and costly renovations.

Repurposing religious properties comes with hurdles, especially since many structures like kitchens and bathrooms lack basic amenities. “You’re often dealing with buildings that are 100 years old and not exactly designed for modern living,” said Mike Messier, a Michigan-based realtor who has seen increasing interest in transforming church properties into residences, schools, or community centers.

Beyond just a roof over people’s heads, these conversions bring new life to communities. The Cahills, a couple who purchased a North Carolina church to turn into their home, have restored the bell tower and invited local residents to ring it—a small but heartfelt gesture reflecting these buildings' emotional pull. “There’s something about hearing that bell ring that connects people back to the community,” said Louis Cahill.

With the Catholic Church and other religious organizations reassessing their real estate, a steady stream of properties may become available, allowing affordable housing advocates to repurpose spaces once central to North American communities. As these conversions gain traction, the housing market may see divine intervention in easing America’s real estate woes—one convent and church at a time.

SNIPPETS

1️⃣ Midwest's Mortgage Mecca: The Fall 2024 housing market sees a shift towards more affordable Midwest and Northeast locales, with Canton-Massillon, Ohio, topping the Wall Street Journal/Realtor.com Housing Market Ranking. Despite falling mortgage rates and increasing inventory nationwide, buyers focus on areas with lower living costs and robust local economies. The top 20 markets offer a combination of affordability, climate resilience, and ample amenities, with most priced below the national median. Canton-Massillon, OH, the top-ranked market, boasts a median listing price of $259,000, significantly lower than the national average, while also experiencing strong buyer demand and rapid price growth. (Realtor.com)

2️⃣ No Crash, Just Cash: Despite rising mortgage rates, home prices in the US continue to climb, defying predictions of a market crash. The National Association of Realtors reports that while home sales have declined slightly, inventory remains low, and foreclosure rates are at historic lows. The absence of distressed sellers and the substantial equity homeowners hold are key factors preventing a price crash. Unlike the 2008 housing crisis, current market conditions lack the combination of a weak economy, forced selling, and high levels of underwater mortgages necessary to trigger a significant downturn in home prices. (HW)

3️⃣ Home Sweet Nope: The National Association of Realtors reported a 3.5% year-over-year decline in existing home sales for September, attributing the downturn to the combined effects of sustained high housing prices and increased mortgage rates. This economic climate has effectively deterred many prospective homebuyers from entering the market, leading to a notable slowdown in real estate transactions. The data underscores the ongoing challenges in the housing sector as affordability concerns continue to impact buyer behavior and market dynamics. (WSJ)

4️⃣ Great Rental Divide: A recent Redfin survey reveals a significant economic divide between young homeowners and renters. 69% of millennials and Gen Z homeowners report being better off financially than four years ago, while only 52% of renters in the same age group share this sentiment. The disparity is attributed to the surge in home values during the pandemic, allowing young homeowners to build substantial equity. In contrast, baby boomers were the only generation where most homeowners and renters reported being worse off financially. The findings highlight the growing economic inequality between young people who have managed to enter homeownership and those who have not. (Redfin)

5️⃣ Apartment Boom Busts: The U.S. multifamily housing market is experiencing a significant slowdown, with annualized starts down 15.7% from last September and permits falling 17.4% year-over-year. This trend is evident across all four Census regions, with the West seeing the steepest decline in permitting at 26.7%. Despite this downturn in the apartment sector, single-family home starts have shown resilience, increasing 5.5% annually. New York remains the top multifamily market, while other major metros like Houston and Dallas have seen substantial decreases in permitting. This shift in the housing market reflects changing economic conditions and may impact future housing availability and affordability. (RealPage)

6️⃣ Politics Meets Property: A recent survey reveals distinct differences in how supporters of presidential candidates Donald Trump and Kamala Harris approach the home-buying process. While both groups generally have positive opinions of real estate agents, Harris supporters tend to be more trusting and traditional in their approach. Trump supporters are slightly more skeptical of agents and the real estate system, requiring more convincing effort. The survey also highlights differences in commission negotiations, awareness of industry changes, and motivations for moving. Despite these variations, both groups share many commonalities in their overall approach to the housing market, emphasizing the importance of agents bridging gaps in a polarized real estate environment. (Inman)