2024 – Page 53

PROPERTY TAXES ON SINGLE-FAMILY HOMES UP 7 PERCENT ACROSS U.S. IN 2023, TO $363 BILLION

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Total Single-Family Taxes Levied Nationwide in 2023 Rise Twice as Fast as in 2022; Average Property Tax Up 4 percent, to $4,062, While Effective Rate Also Increases; Highest Effective Tax Rates Remain Clustered in Northeast and Midwest ATTOM, a leading curator of land, property, and real estate data, released its 2023 property tax analysis for 89.4 million U.S. single family homes, which shows that $363.3 billion in property taxes were levied on single-family homes in 2023, up 6.9 percent from $339.8 billion in 2022. The increase was almost double the 3.6 percent growth rate in 2022 – and the largest in the past five years. The report also shows that the average tax on single-family homes in the U.S. increased 4.1 percent in 2023, to $4,062, after going up 3 percent the previous year. The latest average tax resulted in an effective tax rate nationwide of 0.87 percent. That was up slightly from 0.83 percent in 2022, marking the first increase since 2017. View 2023 Property Taxes by County Heat Map The report analyzed property tax data collected from county tax assessor offices nationwide at the state, metro and county levels along with estimated market values of single-family homes calculated using an automated valuation model (AVM). The effective tax rate shows the average annual property tax expressed as a percentage of the average estimated market value of homes in each geographic area. Effective rates increased last year throughout much of the U.S. amid a combination of declining home values and rising tax bills. Nationwide, the average home value dipped 1.7 percent as the nation’s decade-long housing market boom cooled off in 2023, especially in the second half of the year when median home-sale prices declined. The decrease in values, along with rising taxes, resulted in a small increase in effective rates. Rate trends this year will depend heavily on whether recent drop-offs in home mortgage rates and a historically tight supply of homes for sale around the nation prompt a market rebound. A renewed spike in values that outpaces tax increases would lower effective rates, while the opposite would likely happen if prices stagnate. “Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of country remained in place,” said Rob Barber, CEO at ATTOM. “The tax increases were likely connected, at least in part, to inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses.” He added that “ongoing disparities in how much homeowners pay in different parts of the country are usually related to a couple of important things: varying levels of government services and reduced economies of scale in metro areas with many small municipalities that each maintain separate local governments and school systems.” Highest effective property tax rates in Northeast and Midwest, led by Illinois, New Jersey, Connecticut, New York and NebraskaThe top 10 states with the highest effective property tax rates in 2023 were all in the Northeast and Midwest. They were led by Illinois (1.88 percent), New Jersey (1.64 percent), Connecticut (1.54 percent), New York (1.46 percent) and Nebraska (1.46 percent). Other states in the top 10 for highest effective property tax rates were Ohio (1.37 percent), Pennsylvania (1.33 percent), Vermont (1.29 percent), Kansas (1.26 percent) and New Hampshire (1.25 percent). Lowest effective rates in South and West, led by Hawaii, Arizona, Alabama, Delaware and TennesseeThe 10 states with the lowest effective property tax rates in 2023 were all in the South and West, Topping that list were Hawaii (0.31 percent), Arizona (0.41 percent), Alabama (0.42 percent), Delaware (0.43 percent) and Tennessee (0.44 percent). Other states with low effective property tax rates last year were Idaho (0.44 percent), Utah (0.45 percent), Nevada (0.48 percent), Colorado (0.48 percent) and West Virginia (0.49 percent). Northeastern states still have average taxes up to 10 times higher than elsewhereStates in the Northeast region had seven of the 10 highest average property taxes in the U.S. in 2023. They were led by New Jersey, where the average single-family-home property tax of $9,488 in 2023 was almost 10 times the average of $989 in West Virginia, which had the nation’s smallest average levy. Others states in the top five last year were Connecticut ($8,022), New York ($7,936), Massachusetts ($7,414) and New Hampshire ($7,172). The 10 states with the lowest average tax in 2023 were all in the South. Aside from West Virginia, the lowest were Alabama ($1,104), Arkansas ($1,296), Mississippi ($1,367) and Louisiana ($1,418). Highest metro-area effective rates concentrated in Illinois, Ohio, Pennsylvania and TexasAmong 223 metropolitan statistical areas around the country with a population of at least 200,000 in 2023, 15 of the 25 highest effective tax rates were in Illinois, Ohio, Pennsylvania and Texas. Metro areas with the highest effective property tax rates in 2023 were Akron, OH (2.71 percent); Rockford, IL (2.41 percent); Champaign, IL (1.95 percent); Trenton, NJ (1.94 percent) and Peoria, IL (1.91 percent). The highest effective rates among metro areas with a population of at least 1 million in 2023 were in Chicago, IL (1.84 percent); Rochester, NY (1.77 percent); Hartford, CT (1.76 percent); Cleveland, OH (1.66 percent) and Columbus, OH (1.45 percent). The lowest effective rates in 2023 were in Daphne-Fairhope, AL (0.27 percent); Salisbury, MD (0.30 percent); Honolulu, HI (0.31 percent); Knoxville, TN (0.32 percent) and Tuscaloosa, AL (0.32 percent). Aside from Honolulu, the lowest rates among metro areas with a population of at least 1 million in 2023 were in Phoenix, AZ (0.38 percent); Nashville, TN (0.45 percent); Las Vegas, NV (0.48 percent) and Salt Lake City, UT (0.49 percent). Property taxes increase faster than national average in over half of the U.S.Average property taxes rose by more than the national increase of 4.1 percent last year in 118, or 52.9 percent, of the 223 metro areas analyzed in the report. Metro areas with a population of at least 1 million that had the largest increases in average property taxes from 2022 to 2023 were Charlotte, NC (up 31.5 percent); Indianapolis, IN (up 18.8 percent); Kansas City, MO (up 16.8 percent); Denver, CO (up 15.7 percent) and Atlanta, GA (up 15.2 percent). Major markets with the largest decreases in average property taxes last year included Rochester, NY (down 28.6 percent); Houston, TX (down 26 percent); San Antonio, TX (down 11 percent); Baltimore, MD (down 8.3 percent) and Buffalo, NY (down 3 percent). Average annual property tax tops $10,000 in 21 countiesAmong 1,502 U.S. counties with at least 10,000 single-family homes in 2023, 21 had an average single-family-home property tax of more than $10,000. Of those, 12 were in the New York City metro area. The top five average taxes in counties with at least 100,000 single-family homes were in Essex County, NJ (outside New York City ($13,145); Bergen County, NJ (outside New York City) ($13,112); Nassau County (outside New York City), NY ($13,059); San Mateo County, CA ($13,001) and Santa Clara County (San Jose), CA ($12,462). Media Contact:Megan Huntmegan.hunt@attomdata.com SOURCE ATTOM

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March data shows the largest share of price reductions since 2019 with 34 out of the 50 largest metros showing an uptick in drops According to the Realtor.com® March housing report, buyers are looking at an optimistic mix of increasing inventory and an uptick in price reductions going into the Spring season. In March, the percentage of homes with price reductions increased to 15.0% – the largest share in 5 years – and the total number of homes actively for sale grew by 23.5% compared to last March (but remains well below pre pandemic levels). “Sellers are starting to warm up to the current environment, wading into the market in increasing numbers despite market mortgage rates that are likely above their existing rate, if they have a mortgage. As a result, data shows surprisingly competitive pricing trends among sellers, especially in the lead up to this year’s Best Time to Sell, which Realtor.com® reported will be between April 14th – 20th,” said Danielle Hale, Chief Economist of Realtor.com®. “As seller optimism swells, we may see even further inventory gains later in the season that will likely create a more balanced environment for hopeful homebuyers.” List of the 10 Metro Areas with Largest Share of Price Reductions of Total Inventory Across the country, price reductions were up compared with last year. In the South it was up 3.5 percentage points, +1.0 percentage points in the Midwest, +0.5 percentage points in the Northeast, and +0.2 percentage points in the West. Sellers Turned Out as Home Listing Activity Continued to ClimbBetween January 2024 and March 2024, the inventory of homes actively for sale was at its highest level since 2020. While inventory looks to be on the upswing, it’s important to note that the market is still down 37.9% compared to pre-pandemic levels. Like in February 2024, one price range in particular has outpaced all other price categories as home inventory between $200,000 and $350,000 grew by 30.5% compared to March 2023. A few metros experienced huge gains in active inventory for sale including Tampa (+58.3%), Orlando (53.3%), and Miami (48.2%). Median List Price is in Flux; Up from Last Month, But Not Much has Changed from Last YearThe national median list price increased from $415,500 to $424,900 between February and March 2024. But, when compared to last year, the median list price only increased by 0.2% from March 2023. In two weeks of March, the median list price even dipped below last year’s levels. Out of the 50 largest metros, 18 saw their median list price decline compared to last year including Miami (-8.4%), Oklahoma City (-8.3%), and San Francisco (-7.6%), while Los Angeles (+15.1%), Richmond (+11.8%), and Pittsburgh (+11.6%) saw the biggest increases. As prices fluctuate, so do the requirements for financing a home. With mortgage rates hovering between 6.6% and 7% for the past three months, the cost of financing a home (assuming a 20% down payment) increased by $63 compared to last March. March 2024 Housing Metrics – National Metric Change over Mar 2023 Change over Mar 2019 Median listing price +0.2% (to $422,700) +38.9 % Active listings +32.5 % -37.7 % New listings +16.5 % -17.2 % Median days on market -2 days (to 50 days) -15 days Share of active listings with price reductions +2.2 percentage points(to 15.0%) +0.0 percentage points Additional details and full analysis of the market inventory levels, price reductions, fluctuations and stabilization can be found in the Realtor.com® March Monthly Housing Report. Media Contactpress@move.com SOURCE realtor.com

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Veros Real Estate Solutions (Veros®), an industry leader in enterprise risk management and collateral valuation services, released its 2024 Q1 VeroFORECASTSM, with projections indicating an average nationwide appreciation of 2.9% over the next 12 months. This is an upward revision from last quarter’s forecast of 2.4%. VeroFORECASTSM evaluates home prices in over three hundred of the nation’s largest housing markets, and Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, housing, and geographic variables pertaining to home value. The prediction of a 2.9% increase in home prices over the next year comes amid a backdrop of low housing inventory and resilient demand despite elevated mortgage rates. Rates are expected to hover above 6.5% throughout 2024 due to inflation exceeding the Federal Reserve’s 2% target and a strong labor market, although displaying some signs of softening. Even with the high prices and mortgage rates, overall house prices are still trending up, driven by competition among homebuyers in the face of scarce listings. Further, millennials, the nation’s largest demographic, are stepping into their prime home-buying years, further amplifying demand. Though current mortgage rates exceed those of 2020-2021, they remain moderate in contrast to the daunting rates of the 1980s and 1990s. Looking ahead, the constrained housing supply will be influenced not only by financial factors but also by personal ties to homes and demographic shifts, such as Baby Boomers opting to age in place. Stringent lending regulations, a departure from the lax practices of the 2008 crisis, mitigate the risk of widespread defaults, ensuring market stability. The confluence of already high home prices and interest rates poses a formidable challenge for many buyers, particularly first-time homebuyers, underscoring affordability as a pivotal concern in the 2024 housing landscape. Consequently, buyers are gravitating towards smaller metros in the Northeast and Midwest, drawn by a blend of affordability, robust job markets, and lifestyle allure. The 10 strongest performing markets, poised for appreciation between 6%-7.5% over the next 12 months, predominantly hail from the Northeast and Midwest, boasting proximity to major metros and burgeoning opportunities catalyzed by the work-from-home trend. These include three in Pennsylvania -Lancaster, Reading, and Harrisburg; one in upstate New York – Rochester; two in New England – Manchester, NH; and Hartford, CT; and the remaining four in the Midwest – Rockford, IL; Grand Rapids, MI; Topeka, KS; and Indianapolis, IN. Rank Metropolitan Statistical Area Forecast 1 LANCASTER, PA 7.5% 2 ROCHESTER, NY 7.0% 3 MANCHESTER-NASHUA, NH 6.9% 4 READING, PA 6.7% 5 HARTFORD-EAST HARTFORD-MIDDLETOWN, CT 6.6% 6 ROCKFORD, IL 6.5% 7 GRAND RAPIDS-KENTWOOD, MI 6.2% 8 TOPEKA, KS 6.1% 9 INDIANAPOLIS-CARMEL-ANDERSON, IN 6.1% 10 HARRISBURG-CARLISLE, PA 6.0% Conversely, the ten weakest markets anticipate a mild depreciation over the next 12 months, ranging from -1% to -3%, with several metros, such as some of those in Texas, Louisiana, and Kentucky, grappling with elevated unemployment rates and failing to attract new residents. Previously bustling markets like Austin are experiencing a slowdown due to shifting economic dynamics related to affordability challenges and a less competitive job market. The interplay of supply, demand, and economic factors continues to shape the housing market narrative, underscoring the importance of localized insights amidst broader trends. Rank Metropolitan Statistical Area Forecast 1 BROWNSVILLE-HARLINGEN, TX -3.2% 2 LAKE CHARLES, LA -2.5% 3 AUSTIN-ROUND ROCK-GEORGETOWN, TX -2.4% 4 ST. GEORGE, UT -2.1% 5 PUEBLO, CO -2.0% 6 WACO, TX -1.7% 7 PUNTA GORDA, FL -1.7% 8 BOWLING GREEN, KY -1.6% 9 BEAUMONT-PORT ARTHUR, TX -1.6% 10 MYRTLE BEACH-CONWAY-NORTH MYRTLE BEACH, SC-NC -1.4% Contacts Heather Zeller, Vice President of MarketingCommunications@veros.com(714) 415-6300

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Low inventory is keeping competition high and home values rising The U.S. has a record-high 550 “million-dollar” cities — cities where the typical home is worth $1 million or more — a new Zillow® analysis shows. That is 59 more million-dollar cities than a year ago, reversing losses from when home values were wobbling this time last year. A tight housing market with few homes available has kept home values rising, even while affordability challenges have hampered buyers. The good news for buyers in the market this home-shopping season is that new listings are on the rise as the effects of “rate lock” — occurring when homeowners are financially incentivized to keep their current home because of the low rate on their current mortgage — are weakening, and the hope for lower mortgage rates later this year may mean a second wave of buyer demand this summer. “Affordability is still a big challenge for buyers, but that hasn’t stopped prices from growing,” said Anushna Prakash, an economic research data scientist at Zillow. “Buyers this spring are going to see more options to choose from, but they’ll also see a lot of other buyers wandering through the same open houses. Competition will stay fierce, especially for the most attractive and well-priced homes. If mortgage rates drop later this year, as many expect, we may see a surge in million-dollar cities as even more buyers jump in and drive prices higher.” While million-dollar cities were affected more than the typical U.S. city when home values fell in late 2022, they have generally tracked with the national market over the past year. The typical U.S. home is worth 4.2% more than it was a year ago. In current million-dollar cities, the median year-over-year home value growth is 4.6%. California is home to 210 million-dollar cities, more than the next five states combined. New Jersey has added the most million-dollar cities over the past year, gaining 14. Florida, Texas and Delaware are the only states to have a net loss in million-dollar cities over the past year. Florida lost three million-dollar cities — Siesta Key, Santa Rosa Beach and Sanibel — while adding one, the Village of Palmetto Bay, near Miami. Texas lost two million-dollar cities in the Austin area, Sunset Valley and Volente, and added Bellaire, outside of Houston. The typical home in Delaware’s Dewey Beach fell below the million-dollar cutoff. The New York City metro area, which includes parts of New Jersey and Pennsylvania, has the most million-dollar cities with 106 — 24 more than a year ago. San Francisco is next with 69, followed by Los Angeles with 63. Other than the New York City metro area, Los Angeles gained the most million-dollar cities over the past year, adding seven. Boston added four during that time, and San Diego, Chicago and San Luis Obispo each added three. Million-Dollar Cities by State State $1 Million Cities – February 2024 $1 Million Cities – February 2023 California 210 198 New York 66 54 New Jersey 49 35 Florida 32 34 Massachusetts 31 27 Colorado 21 21 Washington 18 16 Hawaii 17 16 Texas 14 15 Maryland 10 8 Virginia 7 5 South Carolina 6 6 Connecticut 6 5 Minnesota, Utah 6 4 Illinois 6 3 Missouri 5 5 Nevada, North Carolina, Wyoming 4 4 Montana 4 3 Arizona 4 2 Idaho, Tennessee 3 3 New Hampshire 3 2 Ohio 2 2 Pennsylvania 2 0 Delaware 1 2 Georgia, Kansas, Maine, Michigan, Rhode Island, Wisconsin 1 1 Metro Areas With the Most Million-Dollar Cities Metro Area $1 Million Cities– February 2024 $1 Million Cities– February 2023 New York, NY 106 82 San Francisco, CA 69 69 Los Angeles, CA 63 56 Boston, MA 23 19 San Jose, CA 18 18 Seattle, WA 17 15 Miami–Fort Lauderdale, FL 17 16 Washington, DC 14 12 San Diego, CA 10 7 Santa Maria–Santa Barbara, CA; Santa Rosa, CA 9 9 SOURCE Zillow

FirstKey Homes

by Carole VanSickle Ellis
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Dedicated to Growth & Its Residents Going into 2024 By Carole VanSickle Ellis In 2015, when FirstKey Homes opened its doors, the single-family rental (SFR) market was still in its infancy, with researchers at the National Bureau of Economic Research still publishing papers with theses illustrating now-ubiquitous sentiments such as “There is considerable interest in single-family rentals as an asset class.” At that time, FirstKey debuted on the market, declaring it would “set the standard for excellence in SFR management with an approach that combines the dedicated, personal attention of highly experienced professionals with the technology and support of a world-class service provider.” A lot has changed since then and, FirstKey Homes CEO Colleen Keating said proudly just nine years later, the really important elements of FirstKey have remained the same. “We are a leader in the SFR space in resident experience,” Keating said, noting that the company established a keen focus on hiring the best talent early on in order to optimize that experience. She continued, “Our ‘Keypers,’ which is what we call our team members nationwide, are truly dedicated to making a difference in the lives of our residents each day and contributing to the growth of FirstKey Homes,” she said. Today, FirstKey Homes has nearly 53,000 single-family homes nationwide. Ryan Bowes, FirstKey’s chief investment officer (CIO), recalled joining the company in the middle of the COVID-19 pandemic and helping lead the charge to acquire housing and then make it available to residents seeking single-family options during the early days of the pandemic. “We challenged our real estate teams, our closing teams, our corporate team, and our acquisition teams to make this happen,” he said. “It took an incredible amount of effort not just because of the growth we achieved but because our field teams were out there renovating, overseeing assets, renting properties, and working with residents on a daily basis. We believe that good real estate business requires the human touch.” Bowes explained the FirstKey business model requires every home have effective and thorough due diligence performed prior to acquisition as well as direct company supervision of or involvement in renovations, repairs, and underwriting. “There are platforms where the homes are purchased sight-unseen, but that is just not our business model,” he declared proudly. “At the end of the day, we want to be sure each home leads to a great lease and a great experience for our residents. If we have not had human involvement, we are not comfortable with underwriting or acquiring a property.” Those acquisitions made it possible for tens of thousands of residents to live in SFR properties at a time when this asset class was in incredibly high demand, an achievement of which Keating is extremely proud. “There was, of course, a lot of uncertainty in 2020, but I had faith in the resilience of the SFR sector and the need for quality housing,” she said. Keating noted she is proud of FirstKey’s portfolio but takes particular pride in “what that portfolio represents: building a great team that could rapidly grow and scale in a healthy way, being part of a much-needed housing solution, and providing even more American families with high-quality homes in great neighborhoods.” Keating, whose role in the company involves, among other things, extensive travel to visit and connect with Keypers around the country, walking homes in FirstKey developments, and working with teams nationwide, added, “Aligning a company’s offering, values, and mission with the right strategic partners lies at the heart of our ability to make a meaningful, positive impact on local communities. We are so proud of our growth and the contributions we are making to creating communities where our residents can thrive.” Relentless Pursuit of Talent, Growth & Positive Impact FirstKey Homes has certainly demonstrated meteoric growth since its inception, and, under Keating’s leadership, the company’s talent pool is thriving right along with its communities. “I believe it is imperative we remain relentless about surrounding ourselves with the very best talent and create an environment where top talent in the industry can thrive,” Keating explained. “Truly break-through results can only be achieved with a ‘blue-ribbon’ team.” Bowes said he is particularly excited about bringing in new team members who are excited and passionate about real estate. A self-proclaimed real estate enthusiast, Bowes observed working at FirstKey Homes is a perfect fit because he and his team “live and breathe real estate.” He continued, “We love every facet of real estate, especially taking care of our residents, and there is no better asset class in the industry to be in right now than SFR.” FirstKey Homes employees are known as “Keypers,” and the company’s employee policies are dedicated to helping Keypers feel welcomed and included while providing ongoing opportunities for growth. “We have an entire learning and development team dedicated to the career growth of those within our organization because we know that when employees feel valued and heard, they will be co-creators and co-collaborators within the business, going above and beyond to deliver that great resident experience,” Keating said. “We place a high priority on development of individuals as well as corporate growth.” The decision to not only prioritize Keyper development but also to verbalize specific goals and policies surrounding this goal has resulted in FirstKey’s ability to attract young, excited professionals to its rosters. Keating said an overt company policy of inclusion has aided in this effort as well, particularly when it comes to bringing in top Gen Z and Millennial talent. “To be able to seize that creativity and innovation, you have to maintain an inclusive culture within your company,” she said. “Our people know they are contributing and their voices are heard, and that means a better experience for everyone involved, from a top-level executive to a brand-new resident and those with whom they work and interact.” For the Keyper community, part of being heard and involved in the company includes participating in a vast array of employee-driven community-service activities. For example, a

San Jose, California

by Carole VanSickle Ellis
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“The Capital of Silicon Valley” Still Holds Opportunities for Investors By Carole VanSickle Ellis If you live in San Jose, California, then some in the real estate space believe you might need to steel yourself for something most Californians are not very used to: falling home prices. According to Zillow economists, San Jose could see the largest decrease in home prices in the country over the course of 2024, with estimated losses exceeding 6%. The analysts cited high mortgage rates and limited opportunities for new construction as reasons for falling home values. “Builders have limited opportunities with a severe lack of available land,” the team observed, adding potential sellers may add to the local inventory if interest rates fall because lower interest rates will create more mobility among homeowners. Of course, with median sales prices still in excess of $1.3 million and up nearly $25,000 year-over-year as of February 2024, the San Jose market is still a rich one from most perspectives. Nevertheless, local investors say the market is full of opportunities for investors willing to put in some effort. Derek Torculas, owner and CEO at California-based NorCal Home Offer, cited accelerated appreciation as one of the biggest draws for investors interested in Golden State investing. “I find properties that make sense all the time,” he said, adding his company is currently engaged in both fix-and-flip deals and buy-and-hold strategies. As of early 2024, Torculas’s tactics still hold strong, but stiff competition from other investors continued to drive prices skyward. In fact, according to a Redfin analysis published in August 2023, San Jose topped the list of metro areas with the highest median sales prices for investor-bought homes, tying with San Francisco with a median sales price of $1.8 million. To Lori Greymont, president and CEO of the San Jose Real Estate Investors (SJREI) Association, ongoing strength in the market simply indicates San Jose will not follow other west-coast markets into a downturn any time soon. “The San Jose market is like an island,” Greymont said. “While we saw a slow-down in the number of sales over the last year-and-a-half, the price of homes has not only held steady but new and newly renovated homes are turning as quickly now as they did in the past.” Greymont has been buying, selling, and managing both single- and multifamily properties for more than 25 years. A “Builder’s Remedy” in Jeopardy Clearly, there is not currently a surplus of housing in the San Jose area, something that local officials have tried to combat using a vast array of city plans designed to bring in affordable housing options without succumbing to what some insist is a dire threat of “overdevelopment.” However, as the battle continues, many developers accuse the city of simply dismissing many solutions to the problem out of hand without presenting viable alternatives. This conflict stems from a state law in California that permits developers to build projects of nearly any height and size in cities that lack state-certified housing plans. San Jose was one such city until February of this year, resulting in 29 new developments receiving builders-remedy approval between January 2023 and February 2024. However, now that the city’s plan has been approved, only two-thirds of the approved projects will be permitted to continue, thereby chopping more than 4,000 pre-approved units from the city’s pending housing and creating financing complications for the city and private developers. “Less density is better than zero density,” said Erik Schoennauer, a local land-use consultant and representative on seven of the rejected builders-remedy projects. “Having plans that can’t be financed means nothing gets built, and the city has a lot of plans that are financially infeasible to build,” he warned. In response to criticism of this nature, the city announced a streamlining initiative to enable older and underutilized buildings to gain approval for residential upgrades and renovations more quickly. Jerad Ferguson, a San Jose principal planner, told the San Jose Spotlight in February 2023 the infill ordinance will “enable the construction of more affordable housing and allow projects to skip public hearings.” San Jose also plans to update zoning codes to permit housing development in three local business corridors as early as next spring. Those corridors are 13th Street, Japantown, and Willow Glen. However, critics of this move say the proposed zoning changes threaten historic businesses, so investors in the area should monitor local discussion closely, particularly around the Japantown area. San Jose’s Japantown, which grew from the site where Japanese immigrants originally settled in the Santa Clara Valley, is one of only three historical Japantowns still extant in the United States today. Hospitality Sector Could Indicate Ongoing Weakness in 2024 The entire state of California has long been considered a premier travel destination, and San Jose enjoys a top position in the ranks of places tourists like to visit. However, post-pandemic, the city’s tourist sector has not entirely recovered, and this could mean long-term problems for both the local hospitality industry and hospitality-related real estate. Matthew Martinucci, vice president of sales and destination services at nonprofit destination marketing organization Team San Jose, told the Silicon Valley Business Journal in February of this year that he believes San Jose’s reliance on tourist interest from visitors to San Francisco has hurt the city’s post-pandemic recovery. “Much of the international focus for the Bay Area is negative now,” he explained, adding, “San Jose has enough [positive elements] to stand on its own.” In 2019, San Jose boasted roughly 20.6 million international and domestic trips with an annual cumulative spend of nearly $3 billion. The most recently available numbers today (2022) indicate a loss of nearly 1 million trips (still up 35% over 2021) and an annual cumulative spend down about $1 billion compared to 2019. 2023 numbers have not yet been published, but in September 2023, Silicon Valley Business Journal reporter Devan Patel warned, “The slow post-pandemic recovery in business and international travel is still weighing on the [tourism] sector.” This weight is making itself known