Posted on 06/24/2021 6:39:54 AM PDT by blam
It has been a week of staggering home prices increase news which has seen the median existing home price surge to a record $350,000…
… up a whopping 24% from a year ago…
… while today we learned that the median new home price surged 18%, also to a record $374,400 (the average selling price was also a record $430,600)…
… the result being a collapse in homebuyer sentiment…
… leading to a sharp slowdown in actual sale transactions, as the soaring prices start to adversely impact the broader market.
Remarkably summing up what’s going on in the housing market, veteran housing analyst Ivy Zelman said she was seeing “hyperinflation” in the US housing “ecosystem” fraught with labor and materials bottlenecks.
Zelman’s warning comes as investors are closely watching whether a broad surge in inflation as the economy recovers from pandemic lockdowns will prove to be transitory. At least it validates one part of a recent Bank of America warning which said that the US is facing “hyperinflation” if transitory. Well we now have the hyperinflation part; for the sake of the dollar and cilivization, one can only hope that BofA is also right about the transitory part.
Speaking in a Wednesday webcast with Walker & Dunlop Chief Executive Officer Willy Walker, CEO of real estate research firm Zelman & Associates cited a truck-driver shortage along with shipping constraints and soaring costs as among the biggest problems homebuilders are facing. She underscored difficulty in moving shingles from Canada to the U.S. in particular, along with kinks in the supply chain for other staple building materials including drywall and insulation.
And, confirming the sudden drop in new transactions, Zelman also warned that home buyers are stretched.
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The house purchase market is a joke is rigged and in socialist communist states is stupid
In a socialist state like California New York or New Jersey you never wrote anything and if you don’t pay your property taxes once even if you pay cash for the house they will take it
The rental market is a Rwal market covered by Real market forces
Furthermore when you’re renting and things go south with the landlord you can get the hell out rather quickly like we had to do last year
Owning your own home is a great lofty part of the American ideal. and is a wonderful idea when it can be accomplished in a sane and economic way
But being in the construction business and seeing my share of little tiny boxes on postcard size lots worth $1 million I know better
The very low interest rates have a lot to do with the higher prices. If interest rates go up a couple of points the house prices will drop like a rock.
The demand for housing is not based on the price of the house but on your monthly mortgage payment.
2/3 of millenials in a recent poll said they regret buying a home. Too much maintenece takes away from their fun time was the reason.
The younger folks are a rent and lease generation.
The mindset is very different. Everything is based on streaming and on subscription. Owning stuff is out of stye — you just use it for awhile and then move on. As a pure matter of convenience, I get it. But I think it leads all the way to: “You will own nothing. And you will be happy.”
Hey, if you like your communism, you can keep your communism. Well, in truth, once you get that far down the rabbit hole, you may be stuck forever.
You have companies buying up 10’s of thoudands of homes at 20% or higher then listed then they rent them out then your money guy says to invest in the real estate companies and earn 5%
Blackrock owns 80,000 homes and they just bought a company that rents out 17,000 homes.
An investment guy explained to me that investment companies and the uber rich are all putting their dollars into farmland and houses because that’s basically the only safe place right now because of the political climate and inflation.
Said if we had the money we would do exactly the same. Thought about it and he’s right.
The vile, evil Federal Reserve has done nothing but make housing prices unaffordable for the general population (*especially* for first-time homebuyers without equity).
But, at least Juneteenth is a federal holiday now. </sarc>
A 4x8 foot piece of 26 gauge galvanized sheet metal last week was $25.08. This week it is $54.27. That is the common metal duct work is made from to put in a house.
There probably is a lot less farmland for sale and the carrying costs are a lot higher for a working farm unless you plan to just let it go back to nature (which devalues it, just like bad renters do a house).
In my neck of rural farm country, I have yet to see a farm change hands to a non farm entity or even a mega farm corporation. I know of two aging farmers who having no family successors have handpicked young local men to replace them on very favorable terms and a third who sold hers to the neighboring farmer with a life interest and stipend arrangement. She passed away this winter at 80, but raised a few lambs and bummer calves right up till the end living in the farmhouse she was born in.
I think the investment firms buy houses because that’s what’s available.
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