Friday Update April 16, 2021
Oh snap inventory is finally starting to pick up a bit. Good thing too because it's amost May. We have 386 single family existing homes on the market in El Paso County.
Throw in new construction and patio homes and we are up to 473 units on market. This time last year we had 1,589 units, April 2016 had 2,080 units and April 2014 saw 3,691 units. So you can see how much of an inventory squeeze we're in.
Median price here went from $360,000 April of last year, which was admittedly a weird month for all the panic the pandemic came with. We're at $426,000 today.
Lumber pushes new records daily. At the current pace we should see $10 2 by 4s by June. I'm not sure how this is sustaineable, it probably isn't, and will take Federal intervention at the level of removing tariffs to offset this cost. Still tariffs are only 25% of the issue, the rest is supply and demand.
Last week I skipped the update as I was driving from Vegas to LA. We rented a car and drove all around both cities. Saw a lot of Ferraris, Bentleys, a lot of tents alongside the freeways and people begging at street corners. We drove through Inglewood in LA and drove past Crenshaw and Slauson to see what the hood is like in LA. Saw a lot of malt liquor cans, a lot of graffiti, a lot of poverty.
One thing we did not see is a whole lot of for sale signs in front of houses. We did not see a single "price reduced" or "motivated seller" sign anywhere. The housing crunch is national.
As inflation finally starts to become obvious its becoming
1. Too expensive for many people to move
2. The right thing to do to hold onto physical assets like property
3. Cost prohibitive to build which further limits inventory
All I have to say to you guys from an investment perspective is start somewhere. If your options are pay someone else's mortgage or to pay your own the decision there should be pretty obvious.
If you're not willing to stay here long term or become a landlord keep renting until you find the city in which to settle.
Do not count on 14% year over year appreciation, but do not expect it to reverse course in your favor ever. A market crash does not come with an increase in affordability as any crash will be caused by a large spike in interest rates. Too tired to elaborate :) Been everywhere today from under houses on the Westside, to inside of Bronco Billy's in Cripple Creek, to all over Fountain and beyond.