Friday Update March 18, 2022
A day late is better than not doing stuff at all, right?
329 existing single family homes up for sale today as we ramp up into what should be peak inventory here in the next 6 to 8 weeks. Month to date we have seen 697 units close MLS wide so we have like a roughly 1 week supply of inventory. I won't harp on this longer as this situation has been as it is for a while now.
Month to date median sold price is steady at $470,000 and the average sold price jumped over $530,000. We are seeing homes on the median sell for 3% over list price. I was hanging out with a buddy of mine that lives in Denver last night, which is why I didn't write this yesterday, and they're still seeing homes in the million dollar plus range selling in hours and over list price. So the very strong demand in Denver hasn't really died down, and the trickle down in to our market is still a thing. As well as all the normal demand that we have here without Denver's squeeze. I don't even know if we're Denver's main squeeze, I just don't know anymore, you know?
Nutshell. Record high prices.
Rates. Here is the last 6 months of the 10 year US treasury.
Please notice the plunge in rates at the end of February correlating with the beginning of Putin's greatest ever miscalculation and the end of Russia as we knew it(or at least as I knew it). I guess shelling schools, apartments, hospitals and theaters was good enough to suppress rates for a couple of weeks, but that's it. Interest rates rebounded quickly to the highest level since May of 2019. The US bond market sees that the threat of Russia's military pushing into NATO's territory isn't very urgent as the Russian forces can't seem to break out of Pizza Hut's delivery radius of their own border. It's like how do you do something so awful and be so awful at it at the same time. What a pathetic failure of humanity. And by the way, just in case you had doubts, the war is real. There are no jobs there for crisis actors as the civilian population is taking it upon themselves to bear the brunt of Putin's small dicked insecurity. I'd call him a bitch but I respect dogs too much.
How does this all relate to real estate in Colorado Springs? Let's break down just one factor. The 1.5 trillion USD spending bill that just passed congress thanks in no small part to having provisions for supporting the Ukrainian government. We all know that no crisis can ever be wasted and this one sure as hell will not be.
Think about these numbers and then think about how this money will permeate it's way through our society and what it will do to the cost of things we all use, need and live in.
This bill funds the US government obligations through the end of September of this year and includes
- 782 Billion USD for military spending ( This is 178 Billion USD more than the military budgets of China, India, Russia, UK, Saudi Arabia, Germany, France, Japan and South Korea combined)
- 125 Billion to fund the VA which probably still won't be anywhere near enough to take care of all the veterans that need help. Mind you this isn't just like for VA hospitals but for the whole system
- Apparently, and this is me citing the New York times, there are 2.1 million uniformed service members in the US. These folks will all receive a 2.7% increase in pay, which is cute next to 7.9% inflation, but still better than nothing. Then the 750k civilian defense contractors will also get the same pay raise as part of this spending bill.
- The IRS will get another 675 million dollars on top of their existing budget to continue to be terrible in concept and in execution
- There are 50 billion dollars in this bill which are supposed to represent the first chunk of Biden's infrastructure plan. With the inefficiencies of the Federal Government and the incredible efficiency of the corporations milking it the 50 billion dollars should be enough to build a section of toll road somewhere and maybe fix half a bridge over the course of a decade. I'm exagerrating, but you know it's not by much.
- Oh, the military gets a 2.7% pay increase right? But the budgets for representatives in the House will go up by 21%. Because lobbying dollars can only get you so far in Washington I guess?
- A shit ton of pork in this bill that amounts to several hundred billion.
- And 14 billion dollars to support the Ukrainian Government which helped get the whole thing approved.
So that's between March and the end of September, we're going to dump 1.5 Trillion dollars into the system. This isn't even like emergency levels of spending at this point, this is as some of you guys liked to say, the new normal.
This is getting long and I need to get to a 1 year old's birthday party. Next week I think I'll probably rant about how the Fed said they're going to raise rates 6 more times this year and what I think the outcomes will be on the 27% chance that they're not lying.