Friday Update July 23, 2021
I took a look at the sky this morning and despite the fact that it was cloudy (in San Diego for vacation) the sky was certainly still up there. No meltdown yet in the real estate market. I did intentionally overprice a listing last week and I did go under contract on it just fine. I didn't overprice it so badly that people didn't want to look at it and knowing how to walk that fine line between optimism and absurdity is what separates good agents from not so great ones.
I did see a bunch of price reductions across Colorado Springs on properties that were wildly overpriced, one in particular came down almost 100k. This is not a signal that the market is slowing or weakening. This is a signal that sellers are getting too greedy and agents are letting it happen.
I also saw a whole bunch of nice homes priced well that had many, many offers on them.
Today we have 636 existing single family homes on the market, about 16 more than last week. Median price month to date is $445,750 which is down slightly off June. Median list price was $425,000 so you still have a trend of people paying significantly over list price in most cases.
As I mentioned at the start I'm writing this in San Diego. I couldn't help but look to see what's up with their market and how it stacks up to ours. So let's do a June 2020 to now comparison for both. San Diego had a median housing price of just over $600,000 in June of last year, today it's $750,000. In El Paso County we had a median of $360,000 in June of 2020, today it's around $450,000. Percentage wise those increases are identical. I'm guessing it has a lot to do with the money supply expanding by about 25% nationally.
Inventory in San Diego June of 2019 saw about 13,300 units of single family homes and condos on the market. Now they have just under 3,000! That is a pretty insane drop as people are holding onto their assets through this ridiculous Fed inflation cycle. In El Paso County June of 2019 we had just over 2,100 units on the market and today it's more like 700. People aren't selling because people can't afford to move. People aren't selling because the real returns on real estate are pretty great, the tax benefits are pretty great as well. And people aren't selling since they know that once they close they will be sitting on a pile of quickly devaluating dollars. Rather sit on a house that pays you right?
Interest rates had kind of a wild week with the 10 year hitting 1.14% at one point. The stock market had a nice little sell off which then rebounded immediately. Rates seem set to finish the week right around 1.3% which is down significantly from March.
Lumber bounced back a bit and is trading around $650/1000 board feet. This is over $1,000 less than 10 weeks ago and we should start seeing real prices coming down over the coming months.
US M2 money stock is pushing about 20.7 trillion dollars which is about 5 trillion more than it was in January of 2020. I have this sneaking suspicion that all this talk about this new bad ass Covid is just going to be used as an excuse to pump even more money into the system. I could be wrong, I hope I'm wrong, but I'm going to keep positioning myself short on the dollar.