THE WEEK IN REVIEW

Welcome to my weekly newsletter featuring a personal note on the ever-evolving world of real estate along with a few news-worthy updates. Enjoy!

Taking a beat

As we head toward the end of the first half of the year, it's a good time to take stock of the trends we are seeing in the market. While it's been a busy first two quarters for our team, the summer is looking decidedly slower. This is typically the time for seasonal slowdowns, but it does feel a bit more dramatic than usual. I mean, am I really surprised?? Hmmm perhaps one of the following is at play…

1. WARS: Raging conflict in the Middle East, Russia-Ukraine and other parts of the world.

2. ECONOMY/INFLATION: The unknowns around the impact of tariffs, deportations, especially of low-skilled labor on the economy, inflation and growth.

3. JOBS: The unknowns around job losses as we contemplate the impact of A.I. on employment, especially in higher-paying tech jobs.

4. LOCAL UNREST:  Protests on city streets in the US fuel anxiety and highlight the harsh divisions within the US.

5. THE TAX BILL:  As the Senate debates changes and modifications to the tax bill, not knowing makes planning more challenging.

6. INTEREST RATES: Until the FED sees stability in the inflation numbers, it won't lower rates, yet it has indicated two potential cuts could happen later this year.

And YET, while all this unfolds and uncertainty reigns, there are many who know this is possibly the best time to step in and transact. More inventory, more leverage and reduced competition for Buyers, more realistic expectations among sellers, and banks vying for your business allowing you to secure a decent rate that can always be refinanced if/when rates come down. There are also creative loan products such as temporary buydowns or portfolio bridge loans.

Buyers who take a long-term view and focus on building equity, and finding a home that really meets their lifestyle needs often find that time IN the market (and moving on with your life) is more important than “timing the market”.

real estate & the news

• 42 US states provide full or partial sales tax exemptions to data centers or have no state sales tax at all, mostly to some of the wealthiest corporations on earth. Of those, 37 have passed legislation specifically granting sales tax exemptions for data centers, and 16 of those states have granted nearly $6 billion in exemptions over the past 5 years. (CNBC)

• Delinquencies in US commercial real estate credit continue to increase, with distress rising 23% to over $116 billion at the end of March from a year earlier. Policy uncertainty and debt maturities are expected to lead to a "tsunami" of problems for US offices, with investors warning of potential losses and the Federal Reserve noting delayed business decisions. (Bloomberg)

• Privacy extends to flying....NetJets clients that own their own airplanes often choose to use NetJets when they want to be able to fly incognito, with no way to track who’s on board. NetJets is owned by Berkshire Hathaway. The U.S. saw over 3 million private jet flights in 2024, down from 3.1 in 2023, a 1% decline. With over 1,100 planes, NETJETS is now one of the largest airlines by plane count, and is experiencing a shortage of hanger space in areas. (CNBC)

around dc

THE ROOTS

AT THE WOLFTRAP

Back by popular demand! After a sold-out show last summer, The Roots return to Wolf Trap for another unforgettable night. Led by Questlove and Black Thought, this legendary Hip Hop band—also the house band for The Tonight Show Starring Jimmy Fallon—delivers an electrifying fusion of rap, jazz, and soul. Don’t miss the opportunity to experience unmatched lyricism and energy with hits like “You Got Me” and “The Seed (2.0)” from “one of the 20 greatest live acts in the world” (Rolling Stone). Tickets available here.

Lee Arrowood

Principal, Arrowood Advisory at Compass

M: 202.251.3175

O: 202.448.9002

lee.arrowood@compass.com

+$173M Sold In 2023

#3 Team Lead 2022