Friday Update April 30, 2021

366 existing single family homes on the market today.  Flat over last week.  April 1 to today has seen 1222 sales in the local area with, you guessed it, a new record median price of $425,000.  The median home is selling for about 4% over list price, with homes in the lower price ranges often fetching 10-15% over list price.

So we have 1 week of supply here...pretty dire market conditions if you're looking to buy a house.  Running into 15, 20, 50 offers is very common on any given property.  Year over year pricing is up by about 15% county wide. 

Lumber price is up about 70% YTD.  Yea that's in 4 months.  Copper just hit a decade high.  Romex pricing is up like 40 or more percent in 4 months.

Inflation is real and despite what the sociopaths at the Federal Reserve would like you to believe it isn't going to be short lived unless they jack up the interest rates substantially.  We're running close to a 4 trillion dollar federal budget deficit and the President just announced a "once in a generation" infrastructure initiative.  While I'm all for job creation and improving the country as a whole it's important to remember we as a nation are deeply in debt to our central bank and don't actually have the money for any of this shit.  Luckily we are able to create the money out of nothing and carry on with our deficit spending which is all good and all great except it absolutely is inflationary, and the inflation will accelerate significantly unless interest rates are forced upward artificially.  

So we have two possible scenarios looming.  An exploding budget deficit that is then patched with unprecedented money printing.  This will lead to accelerating inflation and a rise across asset prices including housing.

Or the alternative, the Fed can jack up the central bank rate which would drive interest rates up across the board.  This would slow down borrowing and in turn slow down demand on all types of goods and services.  This would have the effect of driving down asset prices and would put many of our heavily leveraged country mates under water.  We already know what this type of deleveraging looks like and I don't think our overlords want to see that again so quickly as the memory of 2009 is just starting to fade.

So I would expect option 1.  Print money.  Raise the minimum wage to whatever you want it to be because it will never be enough to live on.  Throw trillions of dollars borrowed from the next several generations at your political problems today.  Blame energy prices, blame Russia, blame China, blame Canada, and for the sake of consistency blame Covid for rising prices across the board but please make sure to never mention monetary policy as a problem.  Those guys are geniuses and they want the best for us.  I mean look at Jerome Powell giving back to the homeless!

https://www.cnbc.com/2021/04/28/powell-says-he-plans-to-meet-with-homeless-americans-in-washington.html

This is so sick.  This is the guy that runs the heart of the global financial system.  The guy that with just the intonation of his voice can move markets.  The dude that sees no problem printing off 5 trillion dollars in one fiscal year which is driving the cost of living up across the board. Never mind the record high after record high on Wall Street.  But yea let's do a photo op with the homeless while we crank out even more dollars, drive prices up further, and see how these folks most of whom are either on a fixed income or have no income at all benefit from all this.  Disgusting.

The other day one of our agents and I were out knocking doors trying to canvas up some listings.  I had sold a house down the street recently and was using that as my conversation piece.  This lady opens her door, I hand her the flyer and tell her how I sold this house a block up the street for $275,000.  The owner bought that house 8 years earlier for $120,000 and felt like she overpaid.  So I'm telling this lady like look your hood like doubled or tripled in price, it's a great time to sell mam!  Doing my best to maintain my Realtor enthusiasm the whole time.  And the lady told me something so to the point and honest that I'll just quote it directly.  "So I'm gonna sell this house for $275,000, then what the fuck Imma do?"   And I nodded my head in agreement because unless she was to move to some other state with a much lower cost of living her only option really is to stay put.

And investors are staying put as rental rates continue to climb and occupancy rates are near 100%.  And homeowners are staying put because they can't afford to make lateral moves.  And builders aren't cranking out excessive inventory because they have no idea how much building a house will cost in June of this year, never mind September.  So prices continue to rise.

Oh yea another thing President aviator shades proposed that was funny as shit.  He proposes to give a $25,000 tax credit to first time HOME BUYERS to try and ease this housing crunch.  Like completely degenerated thinking that is equivalent to bombing places to achieve peace.  We need more SUPPLY, not more DEMAND.  Give a tax break to sellers, reduce capital gains taxes on sales of investment properties, incentivize SELLING.  WE DON'T NEED ANY MORE BUYERS IN THIS MARKET,  WE NEED INVENTORY AND REASONS FOR PEOPLE TO SELL.  Having a government that runs at above a 4th grade economics level would be a bonus.