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A Narrative of The Housing Economy

Red Lobster Represents Land Management – Rock Lobster Represents Housing

It's not just about endless shrimp driving Red Lobster to bankruptcy. It was a land play and the new owner forced Red Lobster to pay wildly high rental rates on its land. Did I tell you that I used to be a lobster fisherman? I sold my boat a few years ago but I lay claim to catching the most expensive lobster on the northeastern seaboard (when you add the cost of the boat, gas, insurance, the...

The Spring Market Hasn’t Really Sprung With Or Without Cheeseballs Or A 40,000 DJIA

The housing market tends to see increased demand and more listing inventory this time of year to create the first big hump of each twohump camel annual pattern. However, the uptick in sales has been a bit underwhelming. As a "noneconomist" and market analyst (and an appraiser), I would submit that the stubbornness of high rates and the uncertainty of an election year has moderated the temperature...

Tracking Where Fed Policy Is Running

While Housing Isn't Running Of A Cliff, It's Not Clear When Fed Cuts Will Occur Even Though The Housing Data Utilized Doesn't Represent Current Conditions So Why Rely On It? Here's the path taken so far... And here's a potential housing result. Apparently, Alaska's natural beauty isn't enough to keep its residents entertained. Did you miss last Friday's Housing Notes? May 3, 2024: Powell Taking...

Powell Taking Some Of The Sting Out Of The Housing Circus With No Likely Rate Hike

Observers are buzzing that the labor market is cooling, with job openings and quits on the decline, and the Fed Chair says rates are still restrictive. Still, the phrase 'higher for longer' makes housing professionals weep. Thankfully, the Fed kept rates steady. My friend Barry Ritholtz has a mega post with charts galore on why the Fed should actually be cutting already. See what everyone is...

The ‘I Palindrome I’ Effect: Housing Market Conditions Look The Same Backwards And Forwards

Since we are in the middle of a date palindrome this month, I thought it would be helpful to compare this phenomenon against the backdrop of the housing market. Mortgage rates have remained elevated in the New Year and are expected to remain similar over the next several months despite the Fed pivot last December. With rate cut expectations being pushed out to the end of 2024, if not 2025, the...

Mortgage Rates Not Falling Feels Like The Papyrus Font Controversy In The Avatar Movies

The pain of the Papyrus font remains with all of us, just like the Fed's inability to cut rates because the economy roars ahead, unemployment remains very low, inflation threatens, as do rising insurance costs and property taxes, so the housing market suffers just as if it were Times New Roman. The controversy is real. Ok, not really, but when can we ever have a discussion about fonts? Did you...

Our Eyes Hurt After Watching Mortgage Rates Eclipse Our Expectations For Cicadas

Curiously, some perceive the economy's vibes as terrible, but this @$#^& economy is outperforming expectations with the lowest unemployment in nearly 50 years and rising wages—perfect conditions for a housing boom except for the rising homeownership costs, dearth of listing inventory (even as it rises), and the cicada apocalypse. The following chart is a reminder of how people handled...

Chocolate Costs Are Sort Of About To Eclipse The Housing Crisis

Cocoa faces challenges similar to housing in this excellent JPMorgan research paper on the causes of the chocolate crisis: climate change, lack of investment, limited supply, and shrinkflation. Also, consider the cost of lodging in the best places to view the eclipse on Monday. Consider what can be learned from different statistical interpretations of climate change: Or the economic signs...

The Future of Real Estate Brokerage That Once Had Its Max Headroom

But now, the industry and the housing market are in a perfect storm, and the keyword is confusion. Buyer's agents are the vulnerable party, and robust employment and wage growth are making us wonder about those Fed rate cuts in the back half of this year. I have always marveled at this 1980s meme on steroids. Max Headroom was everywhere overnight, then quickly, almost nowhere. Now think about...

The NAR Settlement Makes Housing Market Uncertainty Go To Eleven

The purpose of NAR's landmark settlement was to decouple the commissions paid by the seller from the buyer's agent. After all, sellers don't hire the buyer's agent, nor does the buyer's agent act in the seller's best interests. The settlement means that users of representation services must pay for those services. In a traditional deal structure, the listing agent was usually paid 6% and gave 3%...