Welcome to the Pocket List, investors 👋

Let’s make some money today, shall we?

First, let’s check in on mortgages…

The 411 on rates… Rates continue to move higher… despite any real economic data applying upward pressure. Arguably, the only data points have been Fed speakers indicating they expect interest rates to remain higher for longer.

The fallout… Unsurprisingly, mortgage applications dropped to a 3-month low.

THE LEAD

Real talk

36%.

That’s the percentage of Americans that believe real estate is the best long-term investment. It beat out stocks, gold, bonds, crypto (not all that surprising), and every other asset class.

And it’s not even really close…

But is real estate REALLY the best long-term investment?

The short answer is… it’s complicated.

From a purely financial perspective, it’s not even close: stocks far outperform real estate.

Let’s look at the returns over the past 30 years...

• S&P 500 is up 1,325%

• Case-Shiller US National Home Price Index is up 308%

Ok, so does that mean all of my money should be in stocks?

Probably not…

First off, let’s consider the actual figures being compared.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index “measures residential real estate values.” It’s a national three-month moving average… which means that number could be very different in your neck of the woods.

Oh, and it ONLY looks at the values of homes. It doesn't take into account rental cash flow, profit on flips, wholesaling, etc.

Other considerations

Investing in stocks brings a lot to the table…

• Opening a brokerage account is MUCH easier than applying for a mortgage

• The average down payment is $63k - a brokerage account can be opened for as little as $1

• Over rolling 10-year periods, the S&P 500 has rarely lost money

• Stocks are much more liquid than homes

In defense of real estate (this is a real estate newsletter after all)…

• Real estate can provide a place to live - something your Toll Brothers stock can’t

• There is less volatility in real estate, which has trended steadily upward

• Cashflows from real estate investments can be much more meaningful than those from stock investments

💭 Mr. Pocket Listing says… Say it with me… “Diversification.”

This isn’t financial advice… but diversifying your portfolio is by far the best way to reduce risk. Putting all of your capital into the S&P 500 would be just as insane as pouring every dime into your real estate portfolio.

WHAT ELSE?

More headlines I’m keeping an eye on…

• A Massive Commercial to Residential Conversion is Taking Shape Nationwide—Here’s What Investors Should Know (Read)

• One of the biggest U.S. lenders is offering 0%-down-payment mortgages for first-time home buyers. Here’s the catch. (Read)

• Home builders are slashing prices to lure home buyers, but it may not be enough (Read)

• No relief on the horizon for home prices, says Redfin’s Chen Zhao (Watch)

• The Music Has Stopped For Once-Booming Real Estate Crowdfunding Platforms (Read)

• Capital Gains Taxes Box Home Sellers Into a Corner—These States Are the Hardest Hit (Read)

• A 20% down payment is ‘definitely not required’ to buy a house, economist says. Here’s how much you need (Read)

• Why mortgage rates are doomed to stay above 7% for the foreseeable future (Read)

Let’s get tactical…

• 5 Insights on the Current State of Commercial Real Estate That Investors Must Know About (Read)

• Investing in the Future of Aging Adult Care (Read)

• 3 Self Storage Signals to Watch This Summer (Read)

• How artificial intelligence could change the way you buy or sell your next house (Read)

• Locked out of the US housing market? Here’s how to win ‘revenge’ in the meantime (Read)

• Want to buy a new home but keep your low-interest rate? Try this simple mortgage hack (Read)

• I toured 50 homes and lost out on every single one — here’s how I landed my first home (Read)

• Interior designers share 6 living-room trends that are in this year and 5 we're leaving behind (Read)

Mr. Pocket Listing’s favorite property of the week (a guy can dream, can’t he?)…

PROPERTY TOUR

It’s time to get a pulse on markets around the country…

(1) Hartford, CT came in at #2 // Where’s rent for a 1-bedroom going up the most? It’s not NYC or Boston (Read)

(2) Beecher, MI in the house // Cheapest Places To Buy a Home in Every State (Read)

(3) Alameda County, CA is on the list // Top 10 Opportunity Zones with the Highest Median Home Price in Q1 2024 (Read)

(4) Gulfport, MS made it // Surf, Sand, Savings: The 10 Most Affordable Beach Towns for Short-Term Summer Rentals (Read)

(5) Wichita, KS is #8 // The 10 Strongest Seller’s Markets in the U.S.—Where Homes Still Attract Bidding Wars Galore (Read)

SURVEYING

Last week, I asked, “Are you buying a property if you know someone died in it (let's assume it was a grisly murder)?”

56% of you said, “If I can get a great deal because of the murder... absolutely.” Spoken like true investors.

Here’s today’s question…

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One last thing…