Just as the U.S. housing market is showing signs of renewed strength, REAL Messenger Holdings Limited announced its plan to go public via a SPAC acquisition. The deal has a potential pre-money enterprise value of approximately $150 million and will result in REAL Messenger being traded on the NASDAQ.
According to the deal’s press release, “REAL is revolutionizing the real estate experience, creating a world where real estate is joyful and fun, the different stakeholders in the real estate community are connected, the fragmented businesses of the real estate industry are integrated into one compatible platform and agents have control over their content listings.”
The company’s technology facilitates communication between agents, buyers, and seller and was co-founded by Fredrik Eklund, who co-starred in Bravo’s Million Dollar Listing for 11 seasons. Well-known names from President Donald Trump to Channing Tatum have been involved in SPAC deals in recent years as the investment vehicles came back into vogue in 2021.
The deal arrives at a perilous, but possibly promising, time in the U.S. housing market. The Federal Reserve’s aggressive rate hikes aimed at battling inflation has served to quickly increased borrowing costs for buyers. This lead to what a Freddie Mac economist described as the housing market’s “most significant contraction in activity since 2006.” The historic decline in home sales during the second half of 2022 stabilized by January 2023, however, as low inventories, improvements in buyer confidence, and price declines boosted activity.
U.S. Housing Prices
While activity has declined year over year, and median home prices had dropped by 2% to $361,000 in March, the numbers varying widely by region. While the western part of the country has experienced significant price declines, the southeast, Maine, and other regions have enjoyed strong increases.
According to CoreLogic, “The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”
U.S. Home Price Forecast
CoreLogic predicts that housing prices will increase by 3.7% year over year, February 2023 to February 2024, which is not far below the historical average of 4.6% since 1987.
According to Matterhorn’s comprehensive M&A database, which harnesses AI to track current and historical deals, Real Messenger is represented by law firm Nixon Peabody LLP. The SPAC, Nova Vision Acquisition Corp., is advised by Loeb & Loeb.