Friday Update November 19, 2021
Today we're giving away 100 thanksgiving meals to anyone that needs it. 726 S Tejon from 1 till about 5pm or until we run out. Come by, show some love, grab a turkey and some pie.
We have all of 449 single family homes on the market. That's once again pushing our listing to real estate agent ratio well over 1:10. The funny thing is that real estate agents relentlessly talk about their goals to anyone that will listen, talking about how they're just about to sell like every house in the country. If you look at agents on social media you would think every single one of them at least owned the house they live in. If every agent in our market just got one, one single listing, then our housing crunch would be over. But that's not what's up.
You know what's up? Pricing some more. Average home sold so far in November is $515,000, median right now at $453,000. It is somewhat true that the market has slowed down as compared to the Spring though. In the Spring we were seeing sold price to list price ratios of like 104% meaning that bidding wars and multiple offers were the norm. Also our median price in March was $410,000 and people were eagerly bidding stuff up.
Today our sold to list price ratio is slightly over 100%. Meaning little baby bidding wars instead of big ones. This has to do with 3 reasons. Buyers are exhausted of getting their asses kicked and have left the market. Rates have gone up slightly which pushed even more people out the market. And the housing prices are reaching a level that is not attainable for many people. Yet we keep printing money.
The above is kind of like your instant stagflation, just add a bump in interest rates. Not going to call it yet, we will touch back on this next year. As a reminder stagflation is what happens when prices rise and sales activity drops as money is printed all around us. It happened in the 1970s here in earnest and has happened all around the world since. Stagflation is the reason that an apartment in a shithole like Pravdinsk, Russia costs $30,000. Nobody there can afford to buy it, but the people that own real estate tend to hoard it because they know the ruble is a piece of shit. Increasingly more people feel the same way about the dollar.
You know what else is up? Lumber futures are up about 45% in the last week. Maybe it's because our fearless leader Joe got his trillion dollar stimulus through, maybe its because the market anticipates his further 1.75 trillion to pass, or maybe because its pure speculation in the futures market. Whatever the reason is this type of price volatility in building supplies continues to make it really difficult to build homes on time or on budget.
Another thing that's up is the self esteem of pretty much all construction trades. The same guys that would call you looking for work 8 years ago are way too cool to even bid a job today. I know that this is temporary but it is fucking annoying. I love to see hard working people busy and making money and I'm all for paying people fair wages. I just think it shows a lack of foresight when people don't answer their phones. I'm sure anyone else doing a remodel or build right now knows exactly what I mean. Also if any of you guys are reading this instead of calling people back just know that when this shit eventually shifts you will once again find yourself desperate for work. Foresight.
Interest rates have been kind of flailing around the last couple of weeks with some good pulls up and then back down. 10 year T notes are at about 1.53% today so still within the range we've been for a while now. Mortgage rates too have been pretty flat for a few months overall.
I love you guys, I have a lot more to say but we gotta move these birds today like the BMF gang except with frozen foul instead of cocaine.