Friday Update September 25, 2020

Alright it's Friday, it's late and I usually try to write these things early.   So far today I had an 8am closing, submitted multiple offers, worked with multiple clients and now it's 9:17 pm.  I'm gonna write this shit mildly buzzed ok?

576 Single Family homes in existence and for sale right now here locally.  Population is over 732,000, you see the issue? Median price for September so far has dropped a bit to $376,000.  And that's ok!  Why?  Because a 2% change in a real time median is irrelevant unless that 2% takes you out of the top 1%.  That would be so heartbreaking.  Would have to call your lobbyist to make that one right.

We're seeing increasing volatility in the stock and bond markets which tends to push our rates to the bad.  When mortgage rates go to the bad sales slow down a little.  Mortgage rates are incredibly low and people are incredibly fickle, so a bump from say 2.5% to 3% will take buyers out of the market because they would rather rent and remain broke.  #truestory

True story though is rates are incredibly low and shopping for a quarter point there or an eighth here and missing on property because of it is insanely like certifiably stupid.  Lowest rates in 5000 years or so stupid.

What's next guys?  The Fed promised us no increases in the funds rate until 2023.   That means that interest rates are becoming less pressing on the real estate market.  Sure there will be small fluctuations and the gamblers will find a way out but overall rates are gonna be very, stupid, historically cheap for 3 years minimum.  So guess what!  That means that supply and demand can actually drive the market instead of the constantly dropping price of money.

Being that I live in Colorado Springs where life is pretty alright I would expect our market to remain strong but for the gains we've seen to slow down.  I'm assuming that rates on mortgages don't have much lower they can go, if they do then expect further and substantial price increases.  But let's say we're done, mortgages will be in the 2.x% for the next 3 years.  Now it's just supply and demand driving the market.  If our city continues to add jobs in both the public and private sectors then our housing crunch will continue in earnest.  Pricing will have to slow down or local inflation of wages will have to spike up.  People can only afford to pay so much for housing before lenders tell them "you have a DTI problem, sorry bud".

Where is the silver lining Iggy?  Well maybe before the election we can all get like 1200 bucks from the federal government again!  The assholes that we've elected to represent us can't seem to agree on a number of imaginary dollars that will be created out of nothing and then given to us.  Maybe 2.4 Trillion?  Maybe more?  Doesn't matter though because if you give everyone a thousand bucks at the same time prices on goods and services will go up accordingly.  So just know this going forward, any stimulus packages that are passed will lead to increases in home prices.  Any interest rate drops on mortgage bonds will push homes prices up.  The only thing that can truly take all the air out of this real estate, stock, bond and everything bubble is for real interest rates on American debt to go UP.  The minute that happens the dollar as a reserve currency will be challenged.

Until that day just get a place to live yo.  Over and out.