Bitcoin is predicted to disrupt the real estate market and interest rates, leading to changes in the global financial system, housing costs, lending, and interest rates. Real estate, currently a primary asset for storing wealth, will lose its monetary premium and collapse to its utility value. Bitcoin's properties, such as its finite supply, portability, divisibility, and noncustodial nature, make it a superior store of value compared to real estate. Under a Bitcoin standard, real estate will be replaced by bitcoin, resulting in lower housing costs and increased accessibility. The cost of housing will be determined by supply and demand, with prices closely tied to population changes and land scarcity. Rent prices will be influenced by average disposable income and emerge naturally from the market. Interest rates under a Bitcoin standard will be higher and reflect market reality, leading to healthier market environments and true innovation. Bitcoin's finite nature eliminates the need for generating additional returns, and interest rates will compensate for potential losses due to deflation. The use of bitcoin as collateral will make credit more attainable, enabling greater productivity and efficiency in the global economy. Overall, a Bitcoin standard is expected to increase the general standard of living, reduce costs through deflation, and allow individuals to save and build wealth. [eaad5005]
Texas billionaire and real estate investor John Goff predicts that rising interest rates will force some investors to sell, leading to attractive properties hitting the market. Goff's remarks echo those of other real estate investors who anticipate a wave of defaults and restructurings in commercial real estate. The commercial real estate market is under pressure from high vacancies and increasing interest rates, causing distress for firms that need to refinance. About $1.4 trillion of US commercial property loans are coming due in the next two years. Goff believes that pricing will become more attractive to buyers, but not as deep as earlier in his career. Goff is the chairman of Crescent Real Estate and also holds interests in oil and gas. He thinks the global economy is under-invested in oil and gas and believes the rush to eliminate hydrocarbons is misguided. In addition, a major Canadian meat producer is facing criticism for greenhouse gas emissions, and a portfolio manager predicts consolidation in the Canadian energy space. [9f9eef5f]
Increased yields on the benchmark Treasury bond have eroded investor confidence in commercial real estate and will contribute to lower values across all asset classes in 2024, according to a CBRE investment report [55526752]. The rise in the 10-year Treasury yield to 5 percent or more will raise cap rates and lower capital values for commercial real estate. Commercial real estate values are uniquely tied to the 10-year Treasury due to the quasi-fixed-income nature of real estate investment. The spike in the 10-year Treasury threatens a 5 to 10 percent drop in prices. The increase in Treasury yields is caused by factors such as low unemployment, steady wages, and a growing GDP. The federal budget deficit has expanded, and the demand for bonds has decreased, leading to higher yields. CBRE expects the 10-year Treasury yield to fall to 3 percent in 2025. Falling values and cheaper prices create investment opportunities in commercial real estate [55526752].