—— U.S. Housing Market Loses $2.3 Trillion; Americans’ Retirement Savings Drop 20%; Japan Plane Turns Around Before Landing; Major Ice Storm Hits U.S. Midwest; 2022 Real Estate Fundraising Recap; Private Credit Expands in Emerging Markets; Goldman Invites Clients into Stripe Round
1. U.S. Housing Market Loses $2.3 Trillion
According to data from real estate brokerage Redfin, the U.S. housing market lost 4.9% of its total value in the second half of 2022, dropping from a peak of $47.7 trillion in June—marking the biggest decline since the 5.8% fall during the 2008 subprime crisis.
Compared to last year, mortgage rates more than doubled, and buying competition eased. Last month, the median U.S. home price dropped from the May peak of $433,000 to $383,000.
Redfin’s chief economist stated that while home prices have pulled back recently, the overall market is still $13 trillion larger than in February 2020, and homeowners can still turn a profit when selling.
In the second half of 2022, $2.3 trillion in housing market value evaporated—the biggest drop since the financial crisis.
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2. Americans’ Retirement Savings Drop 20%
According to the latest data from Fidelity Investments, the average 401(k) retirement account in the U.S. lost 20% of its value in 2022, falling from $130,700 to $103,900.
Last year, the S&P 500 dropped 19%, while the bond market failed to act as a hedge, making double-digit losses nearly unavoidable. Many well-known actively managed equity funds posted even larger declines.
Leading tech stocks led the market downturn and dragged down broader indexes. Meanwhile, Americans also faced persistently high inflation.
According to the latest MLIV Pulse survey, most investors say they need at least $3 million to $5 million saved to retire comfortably.
With equity index funds down nearly 20%, investors who didn’t rebalance their 401(k) portfolios faced steep losses.
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3. Japan Plane Turns Around Before Landing
According to a new statement from Japan Airlines, a flight from Tokyo’s Haneda Airport to Fukuoka was forced to turn around moments before landing after a departure delay caused it to miss the 10:00 PM commercial aircraft curfew at its destination.
After a journey lasting over seven hours, all 335 passengers were returned to Tokyo.
Japan Airlines said it would cover passengers’ hotel and taxi costs, provide $150 in compensation, and offer new flight tickets. Some passengers said that while the incident was unfortunate, it was better than risking a safety issue.
Although the scheduled landing time was only minutes past the curfew, the plane was forced to make a last-minute U-turn.
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4. Major Ice Storm Hits U.S. Midwest
A severe ice storm in the U.S. Midwest caused ice accumulation of up to 1.3 centimeters in some areas, leaving more than 800,000 homes and businesses without power and canceling 780 flights.
Today, 25% of flights at Minneapolis–St. Paul International Airport were canceled.
The storm is now moving toward New York and New England, and official websites are warning residents about road conditions.
Several schools in Michigan have closed, and Governor Tony Evers declared an energy emergency for the state.
A total of 780 flights were affected nationwide, and the storm is now approaching New York and New England.
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5. 2022 Real Estate Fundraising Recap
According to PitchBook’s 2022 private capital report, a total of 232 real estate funds raised $85.6 billion globally last year—marking the lowest total in the past decade.
Real estate has long been viewed as a hedge against inflation, but last year’s downturn may have stemmed from several factors:
- Rising borrowing costs and macro uncertainty dampened investor confidence.
- Concerns over potential real estate repricing led to hesitation.
- Infrastructure projects received significant support in 2022, drawing capital away from real estate.
- Many limited partners (LPs) favored long-term investments, and falling inflation expectations reduced the urgency to invest in real estate as an inflation hedge.
Among all real estate strategies, opportunistic funds accounted for 60.5% of capital raised, while distressed asset funds received just 1.2%. Value-add funds captured 26.2%.
Both fund count and total capital raised for real estate declined in 2022, as interest rate hikes weighed heavily on the sector.
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6. Private Credit Expands in Emerging Markets
According to new data from the Global Private Capital Association (GPCA), last year saw record volumes of private credit loans issued to emerging markets in Asia, Africa, Europe, the Middle East, and Latin America.
The $1.4 trillion private credit market is expanding rapidly beyond traditional markets like the U.S. and Europe.
GPCA director Jeff Schlapinski stated that developing economies have long struggled with funding gaps, and private credit funds are well-positioned to fill them. Many mid-market firms need capital to grow, while banks have scaled back lending, making private lenders more attractive.
Blackstone and KKR have launched multi-billion-dollar credit funds in Asia. BlackRock and NBK Capital Partners are also building new funds in Latin America and the Middle East.
Private credit firms like Blackstone and KKR are becoming vital financing partners for emerging market economies.
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7. Goldman Invites Clients into Stripe Round
Sources report that Goldman Sachs Group is inviting its wealthiest clients to participate in a new fundraising round for payments giant Stripe Inc.
Goldman is setting up a dedicated investment vehicle to give high-net-worth clients access to Stripe’s $4 billion funding round.
Stripe urgently needs capital to cover restricted stock unit (RSU) payouts to early employees, along with related tax liabilities. Goldman has yet to disclose details on the investment structure or client contributions.
In 2015, Goldman helped raise convertible bonds for Uber Technologies Inc. through its asset management clients.
This approach allows Goldman to both underwrite Stripe’s private funding round and offer clients exclusive access to new investment opportunities.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.