Fall has arrived here in TN and the days are getting shorter, making those early morning workouts just a teeny bit harder, wishing instead to return to slumber where Twitter trolls, data revisions and empty new-builds only rarely make an appearance.
Thank you for the continuing information on a topic that is major importance. It is essential that you not be deterred from your continuing expression of what you are seeing, since it affects us all.
Melody, this is your best article to date! Your writing style is coming alive and has become "too good to put down" not only in style, but in content. I'm super impressed with how much you've grown in such a short period of time. As for the naysayers, what would one expect from people who are overleveraged and bought at the top? To me this is like a Goldman buy rec... when they do so you know they are trying to exit their position and your naysayers are no different. Thanks so much for all your work!
As for the "obsession with rates" question you pose, I'll suggest another reason to pile on your list. We have an entire generation of "investors" that know nothing but low rates. From professionals to individual investors, nobody who has entered the markets over the past 15 years has had to deal with "normal" interest rates. As well, anyone who can do math knows that CPI is gamed to be as low as possible and real inflation is higher. Plus, core CPI is a joke - take away energy, food and housing costs? You mean the things people actually need?
I'm sure your work will be appreciated by many more once stark reality overcomes the baloney marketing "housing shortage" narrative. Be well and thanks again!
You should check out Greenville, SC. The building going on is nuts. They demographics are median income at 60k, 11% make over 200K, 41% own cause housing cost are nuts. Yet there are large development all for homes in the 1-1.4MM. Nothing in the 300-400 range we need. Lack of health care as we dont have enough doctors. I cant wait to see in the next 18 months the high end new build all crater.
I am currently lease locked in a multifamily appt, primarily to have family land into school district after living abroad. SFOO Housing is inflated much above what I'd conside "normal" inflationary values, but I'm going to "have" to buy within the 6 months....
Part of me says "Why" part says, "just do it", and accept it. I personally don't think rates come down anytime soon (for 2 years), but I can adapt by paying more principle. What gets me is what I previously mentioned, that i consider the inflated values of the single family owner occupied homes out of control. Inventory I think has stagnated, and some of the pricing has come down. Eyes on for now, watching.
Shouldn't the multifamily farms alleviate some of the OOSFH prices? Perhaps a fantasy on my end and ignorance...lol
Absolutely. Multifamily, Built-to-Rent, Short-Term Rentals, etc. will all put pressure on house prices. I honestly think if you can wait until June you might be able to negotiate a good deal. But, I track Charlotte, so I will keep you posted.
That website for Lakewood Ranch is unbelievable! It's like a movie parody of what a screenwriter who was born and raised in Greenwich Village would imagine a Florida community to be.
A leather-skinned woman holding up a tropical colored shirt in a shop, with a cup of wine in her other hand. Man drinking out of a solo cup. Fake farmers market. It's like Stepford Wives on steroids.
I love your work because not only do you build the larger context of what’s going with housing you cite personal experience and sites you’re seeing. Please continue to write, your work is invaluable
I'm a retired guy, have never been in real estate (except as an owner and once, a reluctant landlord) but I follow you on Twitter because too many people won't say what can clearly be seen by simply taking a drive around town. You do though, and I appreciate your knowledge and insight. I'm glad I bought my home as a place to live in and not as an investment. Keep up the good work please!
Thank you so much for your support. And, I am so happy to hear you have a home....so many have forgotten what this is really about - shelter! Thank you again.
I think people have forgotten that Edward Scissorhands was filmed in Florida. Remember that pastel colored cookie cutter neighborhood in the movie? That's all we're building- just with more modernized finishes.
My blog is for New Zealand investors but this post has many parallels for NZ. Except the differences may lead us elsewhere, most loans in NZ are for up to 2-3 years so interest rates are starting to bite now.
You have inspired me to extend my coverage a little bit further, I predicted our market bottom but have not researched the next steps since we have an election closing out this week with major changes to investors coming if the polls are correct.
A challenge I will take on, thanks for your insight
Thank you so much and thank you for reading. Keep me posted on what you find. In the U.S. the builder buydowns which started last year are also starting to reset, so pain is coming.
Terrific investigative journalism as usual Melody, always pleasure to read.
One point I do not hear mentioned by housing analysts is the "flip side" of everyone having locked in a 3% 30 yr fixed mtg. Historically when the fed cut rates in recessions, part of the stimulating effects on consumers and the economy were homeowners refinancing at lower rates. But this time when we get a recession, there will not be a big refinancing wave. Because even if a recession comes and the fed cuts 300bps, say that takes the 10 year T to 3%, this will STILL not make it worth it for most homeowners to refi. Because this might only take rates down to say 5%. No reason to refi at 5% if most are <4%.
Additionally, these rates are pretty much eliminating all cash out refinacing at this time, and use of HELOC's. Cash out refi's were a stimulating effect on the economy during so many prior booms. This time cash out refi's won't save the consumer or elongate a boom. I do not hear a lot about this point from housing analysts.
Completely agree. I could see the gov't come up with a refi modification product, but they would also have to buy down the rate in some way. Thank you so much :).
Thank you for the continuing information on a topic that is major importance. It is essential that you not be deterred from your continuing expression of what you are seeing, since it affects us all.
Thank you so much for reading and your support!
Thank you Melody! Saw you on Wealthion, followed you from there. If they’re trying to silence you, you’re either close or right over the target.
Thank you so much for reading, the kind words and the support!
Melody, this is your best article to date! Your writing style is coming alive and has become "too good to put down" not only in style, but in content. I'm super impressed with how much you've grown in such a short period of time. As for the naysayers, what would one expect from people who are overleveraged and bought at the top? To me this is like a Goldman buy rec... when they do so you know they are trying to exit their position and your naysayers are no different. Thanks so much for all your work!
As for the "obsession with rates" question you pose, I'll suggest another reason to pile on your list. We have an entire generation of "investors" that know nothing but low rates. From professionals to individual investors, nobody who has entered the markets over the past 15 years has had to deal with "normal" interest rates. As well, anyone who can do math knows that CPI is gamed to be as low as possible and real inflation is higher. Plus, core CPI is a joke - take away energy, food and housing costs? You mean the things people actually need?
I'm sure your work will be appreciated by many more once stark reality overcomes the baloney marketing "housing shortage" narrative. Be well and thanks again!
Thank you so much for reading, the support and the kind words. And, yes - I agree- Easy Street has been the name of the game for too long.
We recently visited Vegas and saw the miles and miles of cookie cutter homes built as far as the eye could see, like you mentioned. It was insane.
Yes! I was in Vegas in March and it was absolutely NUTS! Thank you :)
You should check out Greenville, SC. The building going on is nuts. They demographics are median income at 60k, 11% make over 200K, 41% own cause housing cost are nuts. Yet there are large development all for homes in the 1-1.4MM. Nothing in the 300-400 range we need. Lack of health care as we dont have enough doctors. I cant wait to see in the next 18 months the high end new build all crater.
Just about the same in Fort Mill.
These people are bonkers.
Yes indeed! Did spend time in Fort Mill and it was legit insane. And the farms of multifamily were very disconcerting.
I am currently lease locked in a multifamily appt, primarily to have family land into school district after living abroad. SFOO Housing is inflated much above what I'd conside "normal" inflationary values, but I'm going to "have" to buy within the 6 months....
Part of me says "Why" part says, "just do it", and accept it. I personally don't think rates come down anytime soon (for 2 years), but I can adapt by paying more principle. What gets me is what I previously mentioned, that i consider the inflated values of the single family owner occupied homes out of control. Inventory I think has stagnated, and some of the pricing has come down. Eyes on for now, watching.
Shouldn't the multifamily farms alleviate some of the OOSFH prices? Perhaps a fantasy on my end and ignorance...lol
Absolutely. Multifamily, Built-to-Rent, Short-Term Rentals, etc. will all put pressure on house prices. I honestly think if you can wait until June you might be able to negotiate a good deal. But, I track Charlotte, so I will keep you posted.
June...my real boss has other ideas...🤣
You are not the first person to tell me about their dilemma with the "real boss". If said boss wants to chat, I would be happy to :)
Definitely want to check out Greenville! Thank you for the local intel....it's in more places than people think.
This country is one big carny game.
That website for Lakewood Ranch is unbelievable! It's like a movie parody of what a screenwriter who was born and raised in Greenwich Village would imagine a Florida community to be.
A leather-skinned woman holding up a tropical colored shirt in a shop, with a cup of wine in her other hand. Man drinking out of a solo cup. Fake farmers market. It's like Stepford Wives on steroids.
🤣🤣🤣
I love your work because not only do you build the larger context of what’s going with housing you cite personal experience and sites you’re seeing. Please continue to write, your work is invaluable
Thank you so much for reading and the support!
I'm a retired guy, have never been in real estate (except as an owner and once, a reluctant landlord) but I follow you on Twitter because too many people won't say what can clearly be seen by simply taking a drive around town. You do though, and I appreciate your knowledge and insight. I'm glad I bought my home as a place to live in and not as an investment. Keep up the good work please!
Thank you so much for your support. And, I am so happy to hear you have a home....so many have forgotten what this is really about - shelter! Thank you again.
I think people have forgotten that Edward Scissorhands was filmed in Florida. Remember that pastel colored cookie cutter neighborhood in the movie? That's all we're building- just with more modernized finishes.
Great analogy!
super informative MW, will be following all of your content! interview with Todd Sachs brought me to your substack, thanks again!
Thank you so much and thank you for reading!
My blog is for New Zealand investors but this post has many parallels for NZ. Except the differences may lead us elsewhere, most loans in NZ are for up to 2-3 years so interest rates are starting to bite now.
You have inspired me to extend my coverage a little bit further, I predicted our market bottom but have not researched the next steps since we have an election closing out this week with major changes to investors coming if the polls are correct.
A challenge I will take on, thanks for your insight
Thank you so much and thank you for reading. Keep me posted on what you find. In the U.S. the builder buydowns which started last year are also starting to reset, so pain is coming.
Melody, are you sure?
Yeah, yeah! It's time to call bullshit!
Bullshit on what?
Every f***ing thing!
Thank you for not sleeping!
Thank you and thank you for reading :).
Sorry to hear you are being attacked. It does mean you are correct in your assessment.
Thank you!
Terrific investigative journalism as usual Melody, always pleasure to read.
One point I do not hear mentioned by housing analysts is the "flip side" of everyone having locked in a 3% 30 yr fixed mtg. Historically when the fed cut rates in recessions, part of the stimulating effects on consumers and the economy were homeowners refinancing at lower rates. But this time when we get a recession, there will not be a big refinancing wave. Because even if a recession comes and the fed cuts 300bps, say that takes the 10 year T to 3%, this will STILL not make it worth it for most homeowners to refi. Because this might only take rates down to say 5%. No reason to refi at 5% if most are <4%.
Additionally, these rates are pretty much eliminating all cash out refinacing at this time, and use of HELOC's. Cash out refi's were a stimulating effect on the economy during so many prior booms. This time cash out refi's won't save the consumer or elongate a boom. I do not hear a lot about this point from housing analysts.
Completely agree. I could see the gov't come up with a refi modification product, but they would also have to buy down the rate in some way. Thank you so much :).
If you can read this, I look fwd to your thoughts.
https://www.joshuakennon.com/thoughts-on-the-united-states-returning-to-a-normalized-interest-rate-environment-the-housing-market-and-related-topics/