Friday Update October 8, 2021
Hey sorry I missed this yesterday. It's because one of my best friends got married and I got to officiate the wedding. We were at like 11,500 feet and it literally took all day to set up and break down with a lot of hiking involved. They're married! Now my wife and I are in Taos. And now it's update time.
626 single family homes on the market today, in line with a flat line like it's been for months.
Notable change in the market place is the uptick in interest rates on the 10 year notes over 1.6% for the first time since Spring. Continued upward pressure on rates will put some pressure on pricing. However this does not solve the supply side issues at all.
As a matter of fact rising interest rates will contribute further to our supply side problem. People who currently have a mortgage on their existing homes of say 2-3.5% interest will be more likely to stay put than sell and enter the market place at a high price point and higher rates. Why sell a decent home with an affordable payment just to jump into a market where the same house will certainly cost you more in total and per month?
Month to date already over 300 sales closed out in our MLS. Median price point is at $448,000 meaning that little drop into September was not the beginning of the huge market crash. Go figure.
M2 money supply has surpassed 21 Trillion dollars and at the current rate should hit around 35 Trillion dollars by 2024. What do you think that will do to pricing?
I've talked about inflation so much over the last 3 years I probably sound like a broken record. Remember fairly recently when I ridiculed the morons who get to read a script on CNBC? They were all like this inflation is temporary, its transient. Like duh you fuck everything is temporary, in the grand scheme of things the dollar will be temporary too. But in the terms of one human's experience this inflation will be memorable and unpleasant.
Now the same channels are talking about how, always unexpectedly, the inflation is going to stick around. Why? Because the rise in the price of goods and services is coming at a time when a lot of people exited the workforce. They're now demanding a lot more money to re-enter the work force and guess what? They're getting it. So if the price of goods and services goes up, and the baseline incomes go up, guess what. That's permanent.
I'm sitting here in this hotel called El Monte Sagrado in Taos, NM. It's a place that is significantly nicer than what I probably deserve in my life. There is a tranquil pond outside my window, a little adobe style fireplace, and just overall the property is gorgeous. They have this amazing restaurant and bar and both of them are closed because they cannot find employees.
In Durango just about every business is hiring. Wages are rising at the fastest pace in American history. This sounds like a win for the working class but really its a bandaid to take off some of the infaltionary burden that was created through the last 20 or so months.
Bottom line is guys I'm gonna go explore Taos and look for opportunity here, just like I see opportunity in the Springs. If you're unemployed take this opportunity to negotiate your way into a job that interests you and pays you fairly. This is the only time in my 36 years on Earth that I've ever seen potential employees calling the shots at interviews. If you do not take advantage of this current set up and are bitching about a lack of work in the future it's going to be your fault, and no one else's.
You know what I think we're heading for over the next 3 to 4 years? As stagnant real estate market where prices remain high, supply remains low, and affordability gets chipped away at by rising interest rates. The only great thing this will bring us is that less people will want to be Realtors.
I hope you have a great weekend. Here is a picture of the Rio Grande Gorge.