Wow, what a year. In December the market was anticipating as many as 4 rate cuts this year. At the same time the federal reserve was doing a victory dance on pulling of a soft landing. Fast forward and inflation is still hot and there is now a question of if...
You have to hand it to the Federal government, they are always working to solve problems that do not exist. Currently there is a new proposal from the federal government (via Freddie Mac) to insure second mortgages/home equity lines of credit similar to first...
In economics there is no free lunch and you can’t spend forever without paying the piper. A new recent tax proposal keeps spending while drastically increasing taxes on real estate owners. The new plan eliminates the 1031 exchange and the step up in basis upon...
It is interesting that the market continues to focus on interest rates and employment as the barometer for the economy while totally ignoring one metric. As a lender I just did an analysis on our portfolio and one metric jumped off (chart above is my portfolio). In...
States have traditionally set rental regulations including zoning, evictions, etc… but that is all set to change with the president’s new proposal. The federal government will now be assuming many of the powers that were granted to the states. The biggest change is...
According to everything I’ve read, the economy is humming along. Economic growth is good, the labor market is healthy, and a soft landing is all but inevitable. At the same time lenders are acting polar opposite of what we should expect. Why are lenders all the...
The market currently has a fixation on interest rates. Senators are now jumping on the bandwagon pushing the federal reserve to “immediately” cut rates to help the real estate market and affordability. Unfortunately, the senators do not fully grasp how...
Foreclosures are surging in a risky corner of commercial real-estate finance, offering one of the most profound signs yet that turmoil in the commercial property market is just beginning. Lenders this year have issued a record number of foreclosure notices for...
Big changes to how real estate has been bought and sold are scheduled for July. Why is this settlement the most groundbreaking change in real estate since the internet. What is in the most recent settlement? How will home buyers and sellers be impacted by the...
When I was writing this article rates were hovering right around 7%. At the same time economists are predicting a sharp decline in mortgage rates and a booming 2024 real estate market. On the other hand, the chart above shows a much different picture. Where do...
There is a theory that locked in low mortgage rates will force owners to stay in their houses. This has led to a huge shortage of inventory throughout the country. Why is the “lock in effect” starting to wind down? What does this mean for real estate prices over...
We have heard a ton of good news recently regarding inflation. Inflation has come down dramatically from its peak and the market is pricing in almost a 100% probability of an elusive soft landing. Is inflation really coming down as fast as the consumer price index...
Soft Landing base case, impact on real estate Every realtor newsletter I have received predicts an increase in sales and a great real estate market is 2024 due to lower mortgage rates. Will this come to fruition? Will we have a “soft landing” in 2024 and which will...
Anytime you turn on the news you hear about high house prices and that the culprit is that supply has not kept up with demand. Is supply really the main culprit of housing prices or did something else that occurred during Covid radically alter the market? ...
It is interesting that the market continues to focus on interest rates and employment as the barometer for the economy while totally ignoring one metric. As a lender I just did a year end analysis on our portfolio and one metric jumped off the page increasing...
The market keeps predicting a goldilocks scenario with 100% certainty where inflation falls without much if any impact on residential real estate. The “soft landing” will occur at the same time interest rates have skyrocketed and supposedly the consumer...
Although the graph above looks like an old Atari game, it is the Federal reserve dot plot which shows a profound shift. Ironically, just a few weeks ago the Federal Reserve was touting higher rates for longer. Now the federal reserve has done a 180 and has...
Before getting into my predictions, the chart above is indicative of the mixed signals in the economy. Prices are rising on cardboard due to increased consumer demand. How is demand for cardboard rising if consumer spending is slowing along with inflation? The answer...
What do the increased conforming loan limits mean for real estate? The federal government (aka you the taxpayer) now backs mortgages up to 1.15m. The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac has jumped sharply over the...
In a WSJ survey, economists lower recession probability below 50% and say Fed is finished raising interest rates It has been quite a ride for mortgage rates over the last two years. As of this writing mortgage rates were around 7.5% (with no points) which is quite...
US commercial real estate prices have fallen this year for the first time in more than a decade, according to Moody’s Analytics, heightening the risk of more financial stress in the banking industry. What property types are declining? (hint not just office...
What does the recent CPI fall mean for mortgage rates and real estate prices? A broad slowdown in inflation continued in October, likely ending the Federal Reserve’s historic interest rate increases. The slowdown came below most median estimates and the...
A federal jury on Tuesday found the National Association of Realtors and large residential brokerages liable for about $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high. Two major real estate companies have...
Housing industry urges Fed to stop raising rates, does it even matter? Top real estate and banking officials are calling on the Federal Reserve to stop raising interest rates as the industry suffers through surging housing costs and a “historic shortage” of available...
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