rising rates & inventory issues
Issue 80 - April 15th, 2022
Rates are rising! The real estate market is a bubble! It’s all over!
There are headlines you may have seen this week in some form or fashion, and the reality is rates are rising but the inventory of homes available nationwide is still at all time lows!
Rising rates will definitely spook some buyers out of the market and make people reconsider especially at the lower price points, but there will still be strong buyer demand throughout the year. We are nowhere close to a “healthy” real estate market in terms of “inventory” and “supply of homes”. A lot of economists use a 6-month supply of homes for sales as a “healthy” market. This means that if no new homes hit the market then there would be enough for sale to last 6 months… we are currently WAY below that figure as evidenced by this data below.
From a recent REALTOR.com economic report published last week: “The total months supply of new homes ticked up to 6.3 months amid a slower sales pace and remains higher than 1.7 months supply for existing homes. However, the number of months a completed home sits for sale is just 2.5, tying October’s all-time low and highlighting how fast-moving the market remains.”
Rising rates, pathetic supply, and sellers being spooked they have missed the market will cause prices to chill in some areas is my bet, but sales will still continue at a healthy clip even if days on market ticks up slightly. Everyone so quickly forgets that the last 24 months or so have been the most insane housing market in history from a nationwide perspective.
This Summer, listing inventory may creep up as well and could present some buying opportunities for patient buyers in select markets around the country. In cities with flat or non-existent job growth, I predict markets to tumble some from their highs and experience a lot more turbulence than markets with incredible job and population growth like we see in Texas markets.
At the end of the day, always buy the best property you can afford in the BEST location and you will do alright in the long run.
Newsworthy Links To Share
The Omaha House Where Warren Buffett Launched His Business Empire Asks $799,000 (WSJ)
New York City Rental Building That Nixed Trump Name Sold for $266 Million:Manhattan apartment building on the Upper West Side, formerly branded Trump Place, has sold for $266 million. Sam Zell was the seller. (Commercial Observer)
Lumber prices are slipping to levels seen four months ago as soaring inflation curbs the appeal of do-it-yourself renovators to take on costly new home-improvement projects.
RentSpree Debuts Holistic Agent Tools to Streamline the Rental Process (PR Newswire)
Leander, TX: Austin suburb one of the fastest-growing cities in the US (Austonia)