Years ago, I went to real estate "school” in Scottsdale, AZ. I topped my class. Over the months past, I’ve read articles written by Melody Wright and watched videos. I find that I’m appreciating more about property, investment, ownership, etc. than I managed to learn in my structured school setting.
Thank you Melody. …and, YES, Melody I thank you for your genuinely Christian efforts towards victims of hurricane. In addition to your usual job of educating the public about real estate, you’ve increased your workload by helping to heal the wounds afflicting so many Americans.
First - I found you on Coffee and a Mike - loved both your episodes. Grateful someone is giving people like you plenty of time to talk in depth.
Second - my husband and I are debt free. We would love to but some land now and sit on it for ~5 years, pay it off, and eventually build a small home. Looking in the north / north west rural Florida area and TN.
I understand that buying a home right now is not wise. But does that extend to land?
Also - are there people you recommend someone follow to learn about land, homes, HOA issues, etc.?
Thank you so much for the kind words and the support. Congratulations on being debt free! What I've been hearing and seeing about land is that people are still acting like they are sitting on a gold mine. Do you know general location you would like to buy?
What is with these wild week-over-week swings in Airbnb prices in cities like Tucson and Hoboken? What on earth is going on in these places that would cause such rapid changes in price?
Haha. These are compared to their 4-week average now, but it has been pretty wild to watch. It may be event specific - like spring training in Phoenix caused huge spikes. But, for like Hoboken - what? Not sure. For many of the cities I have prices going back to January, so hoping to get better averages to really identify systemic trends.
So, apart from the obvious possible explanation ("the data is plain unreliable"), there is also the possible explanation that these swings in asking price mean that some STR operators have no idea what their unit can rent for at any given time, and are simply guessing wildly?
1M percent. That is a lot of it. Most of them have no access to data to do dynamic pricing, so they just leave as is and hope for the best. It's absolute insanity. I also use Inside Airbnb but they only update 1x every six weeks and of course that is reliant on the Aibnb data. The paid service many use is AirDNA but I have heard their data is very stale, so operators don't have access to good data. If you are a host you are screwed unless you pay for a lot of your own tools.
Great deep dive as always. The BTR stats are interesting, but as Henny Youngman once said in reply to "How's your wife?" He replied "Compared to what?"
Thank you so much! That's the big question, but also it's a matter of looking at all of it together instead of separately....so for instance, in Atlanta there are 437,188 in apartment stock (plans to increase that by 10.6% even though vacancy is currently at 9.2%), 50K in single-family rentals and 4,650 houses listed for sale. 10% of homes listed for rent are vacant in Atlanta currently: https://www.yahoo.com/lifestyle/thousands-atlanta-homes-sit-vacant-180729379.html
New to you as well Melody - I’m not based in the US but here in Ireland the US has exported the corporate buy up of all new builds (apartments mostly) cutting out so many of our young people - despite duel incomes etc. The seeds were sewn after the GFC, after which the country went bankrupt and Ireland sold its ‘jewels’ to (mostly) US vulture capitalists. It’s frustrating to many - how the Irish government doesn’t see the adverse affects of permitting corporate buy up of affordable housing but instead justifies it as ‘we need people to finance the development of housing’. How the government thinks we suddenly cannot finance our own housing market I don’t understand - Ireland’s dark economic days are long gone. But maybe I’m missing something, or maybe not? “Bezzle” - perfect.
So glad you found your way here. Ireland is near and dear to my heart as my forbears hail from County Mayo on one side and Sligo on the other. It seems many governments are suffering from this brand of corporate vulturalism fueled by government at the expense of its citizens - globally synchronized class war in many ways...I didn’t realize it was happening in Ireland too so thank you for the perspective and please feel free to post or send links to relevant news stories. I’ve been focused on the US mainly but from what I’m hearing that has to change so we can bring awareness. Thank you so much for reading and commenting!
New to your Substack. Your writing is fantastic and detailed. Learned about the Bezzle which makes me think of the “animal spirits” created when money is easy leading to booms and inevitable busts. The PPP federal loan tracking tool you shared, to my dismay, outs people I know (including many real estate agents) in my zip code who received “free” money we all now pay for thru inflation. Just reminds me we have a financial system based on grift because our base money is credit based. Contagion eventually.
Thank you so much for reading and for the incredibly kind words! I was completely shocked when I looked up some companies I know. Had never heard they took money....and I agree - the animal spirits and grift are combining to create one heck of a storm. Thank you again.
Animal spirits reminded me of this hilarious Keynes vs Hayek rap video from 2010. Economic lessons still applicable today because the same problems never get fixed.
AirBnBust can't come fast enough. I know a guy who owns a couple of AirBnBs. I checked his today and noticed that his prices are down and the booking is now required to be a week long.
Jeremy - thank you so much for reading and for commenting and sharing. Stories like yours are exactly what we need to hear more of as it feels like MSM and the financial press want to ignore the reality of the majority of this country. And you are exactly right on credit card debt and low participation. All of the data seems a bit out of whack, but when you have millions never returning to the workforce after the GFC and then again after COVID, the employment rate in my opinion is not a good measure of what's happening with the economy. Many in my family have to use credit cards the way you describe. I hope that together we can all get this story out there. Thank you again.
I wanted to share my story from the position of a lowly warehouse worker. I saw a tweet from someone today that said consumers were flush with cash, because checking accounts were 30% higher than 2019. I disagree.
In 2019, my rent was $1250, and we also paid the electric, which was between $30-$100. Now, rent is $1550, plus electric which in the summer can get as high as $150. And our apartment started charging for trash, sewer, trash, natural gas, water, and pest control. That can tack on another $150.
Also, there has been some debate about employment.Everyone just looks at unemployment rate, which is low but the work week hours continues to fall. You can see companies are hoarding labor even as new orders continue to fall. The company I work for has been cutting hours down to 30/week. They have been hoarding labor, and are scared to layoff. So, right now they have froze hiring, cut hours, and waiting for things to pickup.
Capital One has also seen charge offs rising up to 4.5% (2019 5%). I think this is important to keep an eye on, because the workers in factories, retail, and warehousing whose hours are being cut lots of them use Capital One. If consumers are so flush with cash, then was is credit card debt exploding?
Years ago, I went to real estate "school” in Scottsdale, AZ. I topped my class. Over the months past, I’ve read articles written by Melody Wright and watched videos. I find that I’m appreciating more about property, investment, ownership, etc. than I managed to learn in my structured school setting.
Thank you Melody. …and, YES, Melody I thank you for your genuinely Christian efforts towards victims of hurricane. In addition to your usual job of educating the public about real estate, you’ve increased your workload by helping to heal the wounds afflicting so many Americans.
Thank you so much for the incredibly kind words and for reading! You are most welcome.
Hi Melody -
First - I found you on Coffee and a Mike - loved both your episodes. Grateful someone is giving people like you plenty of time to talk in depth.
Second - my husband and I are debt free. We would love to but some land now and sit on it for ~5 years, pay it off, and eventually build a small home. Looking in the north / north west rural Florida area and TN.
I understand that buying a home right now is not wise. But does that extend to land?
Also - are there people you recommend someone follow to learn about land, homes, HOA issues, etc.?
Thank you so much for the kind words and the support. Congratulations on being debt free! What I've been hearing and seeing about land is that people are still acting like they are sitting on a gold mine. Do you know general location you would like to buy?
In Florida we like the Newberry / Williston area west of Ocala and Gainesville.
We also like the Pace area north of Pensacola.
We do not view the purchase of land as something that will make us money. We plan to retire on the property we purchase (in 5+ years).
Our concern is that land is wildly overpriced.
I wish I could find my crystal ball!
What is with these wild week-over-week swings in Airbnb prices in cities like Tucson and Hoboken? What on earth is going on in these places that would cause such rapid changes in price?
Haha. These are compared to their 4-week average now, but it has been pretty wild to watch. It may be event specific - like spring training in Phoenix caused huge spikes. But, for like Hoboken - what? Not sure. For many of the cities I have prices going back to January, so hoping to get better averages to really identify systemic trends.
These are asking prices, right?
Average asking price....yes
So, apart from the obvious possible explanation ("the data is plain unreliable"), there is also the possible explanation that these swings in asking price mean that some STR operators have no idea what their unit can rent for at any given time, and are simply guessing wildly?
1M percent. That is a lot of it. Most of them have no access to data to do dynamic pricing, so they just leave as is and hope for the best. It's absolute insanity. I also use Inside Airbnb but they only update 1x every six weeks and of course that is reliant on the Aibnb data. The paid service many use is AirDNA but I have heard their data is very stale, so operators don't have access to good data. If you are a host you are screwed unless you pay for a lot of your own tools.
Great deep dive as always. The BTR stats are interesting, but as Henny Youngman once said in reply to "How's your wife?" He replied "Compared to what?"
What % of the whole are they?
Thank you so much! That's the big question, but also it's a matter of looking at all of it together instead of separately....so for instance, in Atlanta there are 437,188 in apartment stock (plans to increase that by 10.6% even though vacancy is currently at 9.2%), 50K in single-family rentals and 4,650 houses listed for sale. 10% of homes listed for rent are vacant in Atlanta currently: https://www.yahoo.com/lifestyle/thousands-atlanta-homes-sit-vacant-180729379.html
How much BTR is being built out there....dunno, but when this is the picture in many cities and we have between 6M-14M vacant homes as it is across the US (people quibble about the number, but the Census has it around 14M in 2020: https://www.census.gov/library/stories/2023/05/vacant-seasonal-housing.html#:~:text=As%20the%20nation%20recovered%20from,Housing%20Characteristics%20data%20released%20today - - their piece of the pie will be interesting, but knowing that absolutely may not be possible or even necessary in my opinion
New to you as well Melody - I’m not based in the US but here in Ireland the US has exported the corporate buy up of all new builds (apartments mostly) cutting out so many of our young people - despite duel incomes etc. The seeds were sewn after the GFC, after which the country went bankrupt and Ireland sold its ‘jewels’ to (mostly) US vulture capitalists. It’s frustrating to many - how the Irish government doesn’t see the adverse affects of permitting corporate buy up of affordable housing but instead justifies it as ‘we need people to finance the development of housing’. How the government thinks we suddenly cannot finance our own housing market I don’t understand - Ireland’s dark economic days are long gone. But maybe I’m missing something, or maybe not? “Bezzle” - perfect.
So glad you found your way here. Ireland is near and dear to my heart as my forbears hail from County Mayo on one side and Sligo on the other. It seems many governments are suffering from this brand of corporate vulturalism fueled by government at the expense of its citizens - globally synchronized class war in many ways...I didn’t realize it was happening in Ireland too so thank you for the perspective and please feel free to post or send links to relevant news stories. I’ve been focused on the US mainly but from what I’m hearing that has to change so we can bring awareness. Thank you so much for reading and commenting!
New to your Substack. Your writing is fantastic and detailed. Learned about the Bezzle which makes me think of the “animal spirits” created when money is easy leading to booms and inevitable busts. The PPP federal loan tracking tool you shared, to my dismay, outs people I know (including many real estate agents) in my zip code who received “free” money we all now pay for thru inflation. Just reminds me we have a financial system based on grift because our base money is credit based. Contagion eventually.
Thank you so much for reading and for the incredibly kind words! I was completely shocked when I looked up some companies I know. Had never heard they took money....and I agree - the animal spirits and grift are combining to create one heck of a storm. Thank you again.
Animal spirits reminded me of this hilarious Keynes vs Hayek rap video from 2010. Economic lessons still applicable today because the same problems never get fixed.
https://youtu.be/d0nERTFo-Sk
THAT IS SO AMAZING. Thank you for sharing! Fantastic.
AirBnBust can't come fast enough. I know a guy who owns a couple of AirBnBs. I checked his today and noticed that his prices are down and the booking is now required to be a week long.
Keep me posted. I think lots of folks will start to freak out by the middle of the summer.
Jeremy - thank you so much for reading and for commenting and sharing. Stories like yours are exactly what we need to hear more of as it feels like MSM and the financial press want to ignore the reality of the majority of this country. And you are exactly right on credit card debt and low participation. All of the data seems a bit out of whack, but when you have millions never returning to the workforce after the GFC and then again after COVID, the employment rate in my opinion is not a good measure of what's happening with the economy. Many in my family have to use credit cards the way you describe. I hope that together we can all get this story out there. Thank you again.
Excellent article.
I wanted to share my story from the position of a lowly warehouse worker. I saw a tweet from someone today that said consumers were flush with cash, because checking accounts were 30% higher than 2019. I disagree.
In 2019, my rent was $1250, and we also paid the electric, which was between $30-$100. Now, rent is $1550, plus electric which in the summer can get as high as $150. And our apartment started charging for trash, sewer, trash, natural gas, water, and pest control. That can tack on another $150.
Also, there has been some debate about employment.Everyone just looks at unemployment rate, which is low but the work week hours continues to fall. You can see companies are hoarding labor even as new orders continue to fall. The company I work for has been cutting hours down to 30/week. They have been hoarding labor, and are scared to layoff. So, right now they have froze hiring, cut hours, and waiting for things to pickup.
Capital One has also seen charge offs rising up to 4.5% (2019 5%). I think this is important to keep an eye on, because the workers in factories, retail, and warehousing whose hours are being cut lots of them use Capital One. If consumers are so flush with cash, then was is credit card debt exploding?
Thanks for sharing, and keep up the good work.