2024 The Year In Review

The Real Estate Espresso Podcast

2024 The Year In Review

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Welcome to The Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing, I’m your host, Victor Menasce. On today’s show, we’re taking a look at the year that was 2024. This is a real estate show, so our focus is on the things that have influenced the world of real estate investing. On the agenda today is a retrospective look at valuation. The mantra of “buy low, sell high” applies to virtually any asset. The temptation to believe in one’s brilliant foresight into amazing market conditions is at its peak when you’re in a bubble. However, buying at the top of the market suggests you expect the market to grow—and that’s a risky position.

I learned the lessons of market risks the hard way back in 2000, when the tech industry went superheated with the .com era. Valuations returned to more realistic positions after the bubble burst. 2024 was an upside-down year in many ways, with many investors affected by falling valuations in commercial office real estate and apartments. The last two years saw a sharp spike in interest rates, pushing many investors underwater. Unfortunately, many of these investors, even seasoned ones, ended up ceding control to bondholders.

The stock market valuations were definitely in bubble territory last year, trading well above traditional norms . The stock market traded at a high of 30 times book value. If you account for average economic growth rate, it would take 38 years to earn back the value of today’s stock market if there’s a steady decline in the stock market. The market could drop by 50%-70% to return to historical levels, and if so, the wealth effect could invert for a considerable period of time.

Meanwhile, the US debt has escalated beyond the point of return. The ongoing overspending has resulted in rising consumer price inflation, which is essentially a devaluation of the currency. The vortex of debt that the country is trapped in needs to be addressed by the new administration so that they can work on getting the country’s financial house in order.

On a brighter note, artificial intelligence became mainstream in 2024, with companies worldwide adopting or at least experimenting with AI. Mainstream software applications also started adding AI features to bolster their capabilities. The surge in abilities feels like a decade’s worth of progress condensed into a single year.

Despite setbacks in project approvals because of changing goalposts and slow approvals, we managed to make headway this year by being relentless. Currently, we’re in construction on three projects. And we have also received insightful feedback from our listeners about this year. I’m going to share some insights shared by Daniel.

His single word for the coming year is FAST. Here’s to doing things differently in 2025.

I hope you had a stormer of a year and as the curtains close on 2024, I would like to wish you a Happy New Year. Have a fantastic rest of your day, go out there, make things happen, and we’ll talk again tomorrow!