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

1. Picture this: A Zillow listing for a ‘cozy, modern 2-bed, 1-bath Sentinel’ includes the words 'bioluminescent mood lighting’ and 'minor risk of deep-sea implosion' in the same sentence. Which, I have to say, is a real buyer deterrent. Right up there with ‘next to a nuclear plant’ or ‘previously owned by the Manson family.’

2. Millions are now balancing full-time jobs with also being full-time caregivers—because apparently, aging parents and unpaid internships have a lot in common: both require 31 hours a week, neither comes with benefits, and both involve excessive amounts of guilt.

3. Look at the Foreclosure Slowdown, which sounds like great news—unless you’re a vulture investor who was really hoping 2025 would be your year to scoop up distressed properties. Turns out, with housing demand still sky-high, the only real estate crisis right now is the emotional one you have every time you check Zillow.

Let’s go!

TOP STORY

DEEP VALUE

In a quiet corner of the Welsh border, behind a turnoff most drivers would miss, a construction crew is hard at work. Trucks rumble, cranes sway, and the steady hum of machinery compete with birdsong. At first glance, this looks like any other development site. But the project unfolding here is anything but ordinary. This isn’t another suburban subdivision or a high-rise condo tower—it’s a gateway to underwater real estate.

Meet Deep, a venture-backed by an anonymous investor with a checkbook as deep as the ocean itself. Their mission? To establish a permanent human presence beneath the waves, where people can live, work, and—perhaps someday—own property. The team behind Deep envisions a future where real estate isn’t just about oceanfront views but ocean-floor addresses.

This begs an almost absurd question: Will underwater housing become the next frontier in real estate? Or is this another billionaire’s fever dream, destined to sink under its own weight?

A Deep Dive Into the Vision

Deep’s headquarters—a flooded former limestone quarry—may not seem like the most glamorous proving ground for an undersea metropolis, but it offers the perfect training ground.

Here, engineers, marine biologists, and technology specialists are building the first underwater living units—the Sentinels—which can be lowered 200 meters below the surface and sustained for weeks at a time. The ultimate goal? An undersea city.

Deep’s chief operating officer, Mike Shackleford, lays out the vision.

Each underwater Sentinel, essentially a self-contained pod, features bedrooms, a kitchen, and a bathroom with full running water—an upgrade from past underwater habitats, where “plumbing” often meant a shared curtain around a shower-toilet hybrid.

The plan is ambitious. The project is already well beyond the drawing board phase, and with over £100 million already invested, the first occupants could live below the waves as early as 2027.

But for all the grand ideas, one simple question remains: Why?

Underwater Living: The Next Real Estate Boom?

At first glance, the idea of underwater real estate seems about as realistic as selling vacation homes on the moon. But is it?

Consider the housing market pressures on land. Real estate in many urban centers is unaffordable, climate change threatens coastal properties, and rising mortgage rates have left many homebuyers gasping for air. Could the next great land grab be beneath the ocean’s surface?

It’s not as far-fetched as it sounds.

Jacques Cousteau experimented with underwater habitats as early as the 1960s. NASA has trained astronauts in subaquatic environments for decades. And in a world where private islands sell for tens of millions, could luxury underwater villas be the next ultra-wealthy status symbol?

There’s even precedent in today’s luxury real estate market. Dubai has already built partially submerged villas, with the $3 million “Floating Seahorse” homes featuring underwater bedrooms with floor-to-ceiling views of marine life.

If people are willing to pay a premium for a glass wall in a fish tank, it’s not inconceivable that they might one day pay to live inside the aquarium itself.

The Risks: Real Estate or Sunken Costs?

Of course, this raises a whole new category of real estate risks—ones that no traditional homebuyer or developer has had to consider before.

• Financing: Will banks even issue mortgages for underwater homes? What’s the resale value if your property is literally underwater?

• Regulations: Who governs the ocean floor? Maritime law is a patchwork of agreements, and no country has a legal framework for personal homeownership beneath the sea.

• Safety: The Titan submersible disaster in 2023 was a tragic reminder that deep-sea technology can fail catastrophically. Deep insists its structures will be fully certified by safety regulators, but history has taught us that pressure at 200 meters is unforgiving.

And let’s not forget the simple but very human question: What if you just really want to go outside?

A Future Below the Waves?

For now, Deep remains an experiment, not a market trend. But every great real estate movement starts somewhere. Beachfront property was once considered a liability—now it’s the most coveted land in the world. Skyscrapers were seen as absurd, yet now dominate our cities.

Could subaquatic condos become the next frontier for high-net-worth individuals seeking exclusivity? Perhaps. But for the average homebuyer struggling with today’s rising mortgage rates and affordability crisis, the thought of a new Atlantis probably isn’t the solution they’re looking for.

Until then, underwater real estate remains what it is today: a billionaire’s dream, a scientist’s experiment, and a real estate lawyer’s nightmare.

SNIPPETS

1️⃣ Caregiver Crunch: The number of family caregivers supporting older relatives surged 32% between 2011 and 2022, jumping from 18.2 million to 24.1 million people. Notably, caregiving hours have increased by 50%, now averaging 31 hours per week—nearly a full-time job. The shift suggests a growing demand for accessible, age-friendly housing and home modification solutions, particularly as caregivers are becoming younger, more educated, and more diverse. (HW)

2️⃣ Boomer Housing Bonanza: The sector presents compelling investment opportunities, with 18.8 million Americans expected to be 80+ by 2030 and a projected shortage of 369,000 senior housing units. While development has stalled due to high construction costs and interest rates, the market is seeing strategic pivots, with major players like Welltower and Ventas focusing on acquisitions of existing properties at prices 20-30% below 2019 levels. The most promising segment appears to be luxury senior housing targeting wealthy baby boomers, who can increasingly afford premium living arrangements. Occupancy rates have recovered to pre-pandemic levels. With an estimated 40% of seniors now financially capable of senior housing, investors can expect rising rents and potential value appreciation, particularly in high-end, amenity-rich communities catering to affluent seniors seeking lifestyle-oriented living spaces. (WSJ)

3️⃣ Foreclosure Slowdown: An Auction.com forecast predicts just 69,000 foreclosure-auction sales in 2025 - an 8% drop from 2024 and near-historic lows - contingent on a 4% home price appreciation and 3.8% unemployment rate. Even in a more pessimistic scenario with 99,000 auction sales, this would still represent less than half the 210,000 transactions from 2019, indicating a robust housing market. Notably, buyer demand at real estate-owned (REO) auctions is declining, with average bidders dropping 7% quarterly and 9% annually, primarily attributed to persistently high mortgage rates. Regional variations exist, with metros like New York City, Phoenix, and Las Vegas showing stronger bid-to-value ratios, while markets such as Detroit and Houston demonstrate lower investor interest. (HW)

4️⃣ Zillow's Killer Year: Zillow saw robust 17% revenue growth in Q4, reaching $544 million, with standout segment performances including an 86% surge in mortgage revenues and a 25% spike in rental segment income. Their mortgage loan origination volume skyrocketed 90% to $923 million while maintaining disciplined cost management that reduced net losses by 28% to $52 million. CEO Jeremy Wacksman emphasized a strategic focus on product integration and customer experience, particularly in their enhanced markets and rental segments, which now boast 1.9 million active listings and 29 million unique monthly visitors. (Inman)

5️⃣ Inflation Nation: Overall prices rose 3% in January, with core inflation jumping 3.3% and housing costs remaining a significant driver at 4.4% year-over-year. While this is the lowest shelter inflation rate in three years, it still represents a substantial consideration for property investors. Mortgage rates are hovering near 7%, and the Federal Reserve is unlikely to cut rates soon, given these figures. The housing market's complexity is underscored by the fact that housing changes can take up to six months to reflect in CPI data, meaning investors should watch for continued gradual shifts. (Realtor.com)