Friday Update December 24, 2021

Today's number is super low because nobody wants to list a house for sale on Christmas eve.  So we're at 248 existing single family homes on the market total right now.  Thats 1 house for every 20 real estate agents.  Or 1 house for every roughly 3,000 people in El Paso County.  I bet next week we see a little bounce into the mid to high 300s as this week's folks and next week's folks both list at once.  Will that crash housing prices?  Don't be silly.

Interest rates have been relatively uninteresting.  Despite all the Fed taper talk and all the hype from my thirsty colleagues rates are pretty much flat.  10 year T notes finished the week at 1.49% which is right in the middle of the range we've been playing in since Spring.  Rates are low, prices are high, inventory is dismal, and everyone is a Realtor now.

I know this is above most people's pay grade or give a shit level but when we talk about interest rates we're not just talking about mortgages.  When the Fed raises rates that impacts the amount of interest being paid on now over 29 Trillion dollars in national debt.  So keep in mind that raising rates isn't something that just impacts housing, its something that impacts the Federal budget which is already running at close to a 3 trillion dollar a year deficit.

Our system is FUBAR and we're witnessing the decline of an empire.  But for context real estate in the Netherlands is still valuable, real estate in Great Britain is still valuable, and I'm sure real estate in the US will be valuable long after we lose our world reserve currency priviledge which will happen either 1.  sooner or 2.  later.  The Pound was the global reserve currency before the dollar, the Guilder before that.

Don't get butthurt by the above statement.  It's just inevitable, part of the cycle of countries, dynasties and empires.  Regardless of what happens in the macro picture people will always need a place to live and that's why I think that despite any and all factors real estate is a good legacy investment so long as we don't get a Soviet Russia kind of redistribution of wealth.  Knowing the approximate distribution of arms in this country, and knowing the political leaning of most of the armed forces here though I strongly doubt we're going to see property seizures and redistributions, so I'll keep my money on and in real estate for the long haul.  If this changes I'm sure it won't be quietly.

This is my blog and I'm going to take my space here to shit on a builder.  While I personally don't have any deals going with them, because I do my best to avoid dealing with shit companies that do shit business, I still want to make sure to call them out.  This company is called Lokal Homes and they do business the same way they do spelling, poorly.  

Now before I let the hate loose I just want to remind you how acutely aware I am of construction costs right now.  I've been in the process of building my own house since late summer and I totally get it.  It's hard, prices fluctuate with a steep upwards trend.  

That being said this company, Lokal, contracted a bunch of condos here in the Springs at a particular price.  The buyers waited for a year to have the condos built and delivered.  Then 30-60 days prior to closing the builder notified the buyers that the price is now $50,000 more than they agreed to in the contract.  The company uses their own contract which allows them to terminate the sales agreement for any reason at any time.  So they are now terminating a bunch of agreements because people either refuse to or just simply can not afford to pay the new price.  Again I understand the challenges of building right now, but I also understand that communication is important, that allowing people to know exactly where the price increases are coming from in real time is important, and overall not being a shady piece of shit lame ass builder is important.

So now imagine this position.  You're a first time buyer that just gave notice to your landlord that you're moving out because you expect to close on your brand new home February 1st.  But instead, 3 days before Christmas, this shit builder notifies you that your home is now $50,000 more and you can either figure out how to make that happen or the builder will gladly refund your earnest money plus give you another $500 so you can go fuck yourself quietly.  Pretty neat business model.

If anyone from Lokal is reading this, and I hope you are because I will tag you in the post, make sure that what I'm saying is false before you try and threaten me with any sort of libel.  We all have lawyers.  And ethics wise I'm not talking about your sales people, not talking about any licensee you may have working for you, I'm talking about you as a company.  I'm certainly not talking about the 2 HOAs you have registered with DORA as I have never dealt with either, just you as the builder.  You guys are taking advantage of an inventory shortage and hurting people at a price point where it hurts the most.  You're literally leaving people homeless and notifying them 3 days before Christmas.  Fuck you and whichever of you thought this was the right way to do this.  Creekstone too, but they're already getting what they deserve sitting on a bunch of unsold overpriced inventory in a time when no other builder can keep up with demand.  It's like you get what you give!

End of rant.

With Christmas Eve upon us and the New Year right around the corner let's really try to focus on the big picture.  I see real estate as a long term investment.  It's something that I want to leave to my son, something I hope that his kids can pick up on and inherit.  It's the only relatively safe way that I know to create wealth not for myself but for future generations of my family.  With that being the goal I really don't take it lightly. I think those of us that help others with their real estate goals need to understand more than just what 3% of something is.  We need to look out for our clients better than we would look out for ourselves.  Because at the end of the day it's our clients that enable us to feed our families, to keep our lights on, and to work on our own goals and dreams.

That being said guys to everyone that has worked with me over the course of the last 8 years I am forever grateful.  It's been a pretty wild ride especially these last 4 years since starting SRG and running my own brokerage.  I appreciate the support and I genuinely hope you don't read into my rants as being just purely negative.  I like to bring bullshit to the light so that people can see it, think about it, figure out ways to avoid it or to deal with it better.  I'm not just bitching for the sake of bitching here, I really want the people in my circle to come out of this crazy decade ahead rather than behind.  Maybe I can say things more tactfully, less harshly, but then would you read this?  

Next update December 31.  Set your resolutions.