Will real estate prices fall? Underwater homeowners, recession signals and predictions on how far prices could drop.
The real estate market has rapidly changed. The number of owners who are underwater is small but growing, and they have recently been concentrated in pandemic boomtowns such as Austin, Texas, Cape Coral, Fla and Denver, CO. A rapid rise in prices in these...
As I was hiking with my family almost at treeline in Colorado, one of my dogs suddenly went on point. To our surprise there was a brown bear sauntering through the field (sorry looks like a brown sheep as we are a good distance away on a ridge). In 30 years we...
Last week I asked all of you will real estate prices fall back to Covid levels? The real estate pros have spoken, I was floored at the results. My prediction is that it would be evenly split, but the results were just the opposite with 88%...
In my last blog post, Will real estate fall to 2020 values, I launched my first survey to see what the readers of my blog thought about the direction of the real estate market, the results were astounding. There was a clear consensus of where real estate prices are...
The real estate market has drastically shifted. Look at the chart above, sellers are rapidly outpacing buyers which means only one thing; the law of economics will rule, and prices will fall. What is causing prices to fall now in many markets, and will this...
Are the bulls running or are the bears coming? Any business media you pick up is harping on the idea of a “recession watch” and the economy is basically coming to an end! On the flip side my proprietary lending data is giving me a radically different answer. What...
For years, myself, and many others have thought that interest rates were the predictor of housing prices. Fast forward to post COVID where interest rates have doubled and yet housing prices remain high and are still trending higher in many markets. What other...
Even with falling interest rates, inventory has quickly increased. We have gone from a supposed shortage of housing to an inventory surplus in many hot markets. Home sales in July were at the lowest recorded level. What is driving the increase in inventory? Will...
There is a huge premium to buying a property compared to renting. It is now 70% more expensive to buy vs rent a property, which is considerably higher than at any time in the last fifty years. What is causing the large divergence in renting vs buying? What...
There is a huge premium to buying a property compared to renting. It is now 70% more expensive to buy vs rent a property, which is considerably higher than at any time in the last fifty years. What is causing the large divergence in renting vs buying? What does...
The economy is currently in a “transition” phase. To determine if the sun is setting on our current cycle, it is critical to watch for leading indicators of where we might be heading. One of the strongest predictors of a recession is consumer purchases of one...
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...
Fed raises rates 2200% The floor on housing prices drops The real estate party cannot go on forever. We are in a goldilocks scenario where prices are staying high even in the face of doubling mortgage rates. Unfortunately, eventually the porridge cools off! It is...
In the past recessions, especially in 2008, just prior to the crash we saw a big pull back in luxury purchases. This was an early indicator of huge drops in real estate prices. Currently we are seeing a resounding change in luxury spending, does this mean luxury...
Although the spring real estate market has slowed drastically from the pandemic days, the bottom has not fallen out. Quite the opposite has occurred, in suburban markets and sunbelt cities, real estate keeps charging higher. A good example is Boulder, CO, a...
Inflation continues to stick around with core CPI running near record highs. This will keep the federal reserve on a likely path to hike rates once again in May. What does this mean for interest rates and real estate? What happens when interest rates finally...
Purchasing power from paychecks fell 2.9% for middle-income households in 2022 compared with 2021, while rising 1.5% for the bottom fifth of households and 1.1% for the top, according to the Congressional Budget Office study. Furthermore, nearly 40 percent of...
In 2023, NAR Chief Economist Lawrence Yun expects home sales to decline by 7%, while the national median home price will increase by 1% in his recent 2023 market update. On the flip side the most recent federal reserve economic commentary classifies the current...
There is pretty much a universal theme that there will be a recession in the future. It is like saying that it might rain sometime in the next month. It doesn’t help you much without knowing approximately when it will rain and if it will be a light sprinkle or turn...
What a week it has been in the economy. The federal reserve is still struggling to contain inflation and as a result increased the fed funds rate .75%. After the announcement stocks roared back in a huge “relief” rally and mortgage rates plummeted. Shortly after,...
There has been an unexpectedly sharp downturn in demand to truck everything from food to furniture since the beginning of March and rates in the overheated segment that deals in on-demand trucking jobs - known as the spot market - are skidding. Why are trucking rates...
The federal government in their quest to shore up the mortgage market in 2008 has created some new risks to the housing market. Non bank lenders now make up 74% of the origination volume with only 3 banks even making the list. What does this mean for the mortgage...
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