[Issuer] UrbanGate October 2023 Update & Thoughts on the Housing Market

Hello Centrifuge Community,

It is a very interesting time in the housing market. Interest rates have caused a huge slow down in demand for people wanting to buy a home. In addition, the the majority of people who own their home have interest rates under 4-6% and don’t want to sell since they would have to buy a new home at a rate closer to 8%. This has caused a slow down in new inventory hitting the market as well.

In summary, the housing market is in a bit of a stand still. My mental model though is that the transactions will slow down significantly while the inventory slowly grows which will lead to a slow decline in housing value over time. At the moment there has not been an up tick in mortgage defaults which makes me believe there won’t be a flood of foreclosures however if the labor market gets hit hard that could change. I don’t think this will be a 2008 situation where a huge amount of supply hits the market. I personally think this is a demand side issue where people just can’t afford to buy a home at the current rates which lessons demand.

While we are not yet operating a pool on Centrifuge, we like to post our monthly updates that we send to our investors here in the Centrifuge Forum so that everyone can keep up with our loan progress in hopes that we can successfully launch a pool on Centrifuge in the future.

Here is a link to our UrbanGate Monthly Investor Video Update

Here is our September 2023 Key Metrics:

  • Capital in the Fund: $2,921,170
  • Utilization rate: 93%
  • Loan Volume: $342,000
  • Number of Loans: 2
  • Loan to Value at Origination: 86%
  • Loan to After Repair Value: 64%
  • Loan to Cost: 84%
  • Interest Paid to Investors: $19,197