Friday Update June 25, 2021
566 single family homes on the market today, 21 more than last week. A lot of people are taking their first vacations since before the pandemic started and sales activity has slowed down somewhat. That somewhat of a slowdown also has a lot to do with median pricing getting above attainable for many. Also when I say "slow down" the current market pace is still so fast that it really is difficult to keep up with it.
Leave it to us Realtors to start speculating about a market crash just because the overpriced piece of shit we listed is taking a week to sell instead of a day. The market isn't crashing and if you know how to accurately price listings they still get a ton of showings and get offers quickly. What I do think is happening in the market, and this is confirmed by my colleagues as far away as California, is greed. For example in 2017 or so I specifically remember buyers trying to convince me that we're in a buyer's market, that their friend got $8,000 just for buying a house, and that we should write offers 100k below asking. I had to tell those people that the market they were referring to was like 5-8 years behind us and that the house we're in has multiple offers on it already. There was a disconnect between the public's perception of the market and it's reality.
Today I'm seeing sellers finally fully absorb the fact that this market is not a fluke, that indeed they are in the driver's seat, and some people's deeply seated flaws such as selfishness and greed are making their way into listing agreements. Agents should be the voice of reason here but with about 5,000 agents and under 600 listings it's easy to see why many agents are happy to just plant a sign in the dirt, regardless of context. A seller's market means that when you price your house in line with reality it will sell quickly and often for even more than a good listing agent may have expected. A seller's market does not mean you can take that heap of garbage you've neglected for 3 decades and dump your problems on someone else for 10% more than the nice house next to it. I've been to a few listings appointments in the last few months where the sellers' expectations were about 30% above reality. I walked away from those listings, other agents took them and priced them significantly higher than I would have, and then weeks to months later the homes sold for roughly what I told the owners they would in the first place. Lucky me though, I got to spend time with my son holding his hands instead.
In the macro economics world we have one sliver of really good news. The lumber bubble has popped. In this moment futures are trading at $779 which is almost $1000 less than 6 weeks ago. However that is still roughly double the "normal" price. Hopefully this trend continues downward and we start to see delivered product price drop significantly over the next couple of months. That would be dope AF.
As I mentioned last week though do not expect this to cause a drop in the price of new builds. Builders went from healthy 10-15% or more profits to breaking even or sometimes losing money. This drop in lumber pricing will just allow them to restore their normal margins and hopefully build more units. Builders! More units please!!!
Some interesting stuff in politics going on. I'll rant about it more in the coming months as the dust settles but it seems after a long legal battle its finally been decided that Fannie Mae and Freddie Mac are more government controlled agencies than they are not. Wasting no time the Biden administration replaced the head of FHFA which oversees both of the aforementioned agencies. The person leaving the position was known for kind of a Libertarian stance, the incoming person has a goal to solve the racial and income related gaps in home ownership. How they go about doing this is going to be interesting and I'm sure will give me plenty of material to rant about.
For the time being guys it's a whole lot of same same out here. The rich are getting richer, the poor keep getting poorer, and the politicians talk about helping one while really just helping the other. Classic life stuff. Own your actions, own your assets, and dictate your own future as much as possible.