Alternative Investing Report - November 7, 2024

*as of 11/6; Sources: S&P, BTC, FTSE, DJRE, CL50

The median age of first-time homebuyers rose from 35 to 38 in the year ending July 2024, while the average age of all homebuyers jumped from 49 to 56, a historic high. The share of first-time buyers also fell from 32% to 24%, which is the lowest percentage since it was first tracked in 1981. Meanwhile, the average age of a home seller in the same period was 63, also the highest ever recorded. The median final sales price was 100% of the listing price, the highest percentage since 2002.

➨ TAKEAWAY: The current environment of high mortgage rates and high housing prices has made it very difficult for young people to purchase a home, causing more of them to rent. Even younger buyers who can afford a down payment are often outbid by older, wealthier competitors. Until supply exceeds demand, this trend will continue, and more young people will stay renters for longer.

In keeping with the election theme, there are two presidential auctions coming later this month. Guernsey’s is holding an American History auction on November 22 with lots such as a lock of George Washington’s hair and a flag that was once draped on Abraham Lincoln’s coffin, the latter of which could fetch over $1 million. Next week at Bonhams, a 1784 letter signed by John Adams, Benjamin Franklin and Thomas Jefferson goes up for sale, and is also expected to sell for over $1 million.

➨ TAKEAWAY: American memorabilia tends to generate more interest during election years, and these auctions are capitalizing on that trend. Rare objects with historical importance, even those as odd as a lock of hair, can still be collector’s items.

🏡 Mortgage rates set to rise: In the wake of the election, the yield on a 10-year Treasury bond rose to 4.47% from 4.3% as bond traders fear that a Republican-led government will result in higher government deficits. Mortgage rates tend to move in tandem with 10-year Treasuries, so expect them to rise as well.

🪙 Another Bitcoin record high: Trump’s victory has boosted the crypto market, with Bitcoin surpassing $75,000 for the first time, and Ethereum and Solana both posting double-digit gains on Wednesday.

🤖 Perplexity fundraise: The AI search engine startup is reportedly raising $500 million at a $9 billion valuation, $1 billion higher than was originally reported. The company was worth $1 billion six months ago and $500 million at the beginning of 2024.

🪨 Lunar meteorite: A 2-kilogram slice of the second-largest known lunar meteorite to ever land on Earth is being auctioned today at Christie's and is expected to sell for between $280,000 - $420,000.

🚀 Coatue AI fund: The hedge fund raised $1 billion to deploy into AI-focused startups, with the funding coming primarily from institutional investors. However, some high-net-worth individuals were also able to invest through the brokerage Raymond James & Associates.

⚾ Collectable lawsuit: An investor in the former collectible fractional investment platform filed a lawsuit to get answers about what is going on with the remaining assets that Collectable is holding.

🏢 Multifamily vacancies fall: Demand for apartments outpaced new supply, bringing the vacancy rate down to 5.3% in Q3, nearly in line with the long-term average of 5.0%.

One of the concerns surrounding AI has been its use in misinformation campaigns and its propensity to “hallucinate,” which sometimes leads to generating fake news items. The potential cure for that might just be AI itself, as new detection systems come to the market which could be the first step towards personalized AI fact checkers policing our social media feeds. When it comes to AI, “it takes one to know one” could end up being the fix to the fake news problem.