Hey there,
Ever feel like the market only needs a small shift in rates to change the mood overnight? With rates dipping into the 5s, South Florida condos are pulling investors back, office-to-apartment conversions are finally becoming real, and non-QM loans are quietly saving deals that would otherwise die under strict agency rules.
Take a moment to see where the leverage is moving for 2026 buyers, sellers, and brokers.
📰 Upcoming in this issue
🏙️ Rates In The 5s, South Florida Condos Heat Up, And 2 More Markets
🏙️ 330M Sq Ft Of Empty Offices, Conversions Finally Get Real
📉 Brokers Keep Losing Deals Because Non-QM Isn’t Just Bank Statements
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🏙️ Rates In The 5s, South Florida Condos Heat Up, And 2 More Markets
Danny Fishman of GAIA Real Estate says rates in the 5s are deterring investors, and South Florida condos are leading the charge. Redfin data shows that West Palm Beach pending sales rose 9.1% over the four weeks ending Feb. 8. Fishman flags Nashville and Houston as the next best deals, while NYC requires patience.
Key Takeaways:
🌴 South Florida Condo Wave: Miami to West Palm has tens of thousands of new units, attracting buyers from the UK, Canada, and Latin America.
📊 West Palm Proof Point: Pending sales rose 9.1% in the four weeks ending Feb. 8, one of only four metros to increase.
🎸 Nashville Value Reset: Oversupply pushed rents and prices down, but healthcare, universities, and new employers keep long-term demand intact.
🤠 Houston Deal Pockets: Prices cooled, and growth with Apple and Nvidia in the mix create pockets Fishman calls lower risk.
🏙️ 330M Sq Ft Of Empty Offices, Conversions Finally Get Real
Cities and owners are eyeing office-to-apartment swaps as analysts warn of a 330-million-square-foot surplus of vacant office space by decade’s end, while the U.S. is short 1 to 6 million homes. The make-or-break factor is whether the building can deliver light, operable windows, and code-compliant layouts, or the budget will explode.
Key Takeaways:
🧱 Start With The Floor Plate: Shallow core depth and extensive window line determine unit counts and whether bedrooms can meet light rules.
⏱️ Time Isn’t Instant: Typical conversion construction takes 8 to 16 months, but early go/no-go checks can move quickly.
🗺️ Zoning Sets The Ceiling: Zoning rules, parking minimums, and approval timelines can stall deals or unlock tax breaks in some cities.
🔧Budget For The Guts: Plan for new plumbing stacks, electrical upgrades, elevators, and amenity space, plus a clear unit mix and target renter.
📉 Brokers Keep Losing Deals Because Non-QM Isn’t Just Bank Statements
Quontic Bank execs say many mortgage brokers still don’t understand today’s non-QM menu, and that misunderstanding is costing them closed loans. They point to tools like asset utilization, where 90% of an investment account can be spread over 60 months as qualifying income, helping borrowers who fail bank-statement math.
Key Takeaways:
🧠 Education Saves Closings: Quontic’s John Brumund says brokers who study the menu can “save a lot of loans” they’re losing today.
🛑 Not Subprime Stuff: Non-QM today is not “subprime or questionable,” he says. It’s often the only fit when agency rules fail.
🧾 Beyond Bank Statements: Peter Pavlakos says brokers treat non-QM as only bank statements, resend the same file, and get denied again.
💵 Asset Income Trick: One rescue move is to use asset depletion. For example, take 90% of a $1M investment account and divide by 60 months.
📊 Take This Edition’s Poll:
Would you rather chase rate-driven condo momentum or bet on price-reset metros that rebound slower but steadier?
Why It Matters
When some metros heat up while others require patience, the advantage lies in knowing which pockets have real demand and which are still working through supply. Conversions can help close housing gaps, but only when the building’s bones, windows, layout, and code path make the math work.
And as financing gets more nuanced, the brokers who understand modern non-QM options will keep more buyers in the game.
Bailey Watkins
Editor-in-Chief
Residential Real Estate
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