While he's a bit frantic on screen, Nick at Reventure Consulting keeps making solid, data driven videos, telling where the hot spots and cold spots are, in real estate across the United States. I found his channel several months ago, looking for real estate trends, to see how they compared to other trends I saw happening. He has called a lot of what's now happening, months in advance.
As I mentioned in a recent video, one day at the grocery store, early in the pandemic, both the guy in line ahead of me, and the cashier, were talking about the "coming real estate crash" here in Southern California. That was in late April or early May of 2020, and they both expected housing prices to drop dramatically by late 2020, when they each planned to buy a good, 4-6 unit rental property. I totally agreed with them on where things were headed for L.A. area real estate.
But then The Fed started creating bailout money, which progams distributed to nearly everyone. Altogether, 5 or 6 trillion dollars began to wash through the economy, while interest rates were still at historical lows. The stock market kept heading up, and millennials, in particular, got FOMO fever about homes, and real estate blasted off to the moon. Nearly two years later, in early 2022, most people in real estate expected the party to keep going, despite some annoying inflation that wouldn't go away. Then, in March 2022, the official inflation rate jumped above 8%, to 8.5%, freaking out everyone who watches it. Though it just dropped back in July, it's again at 8.5%, after hitting 9.1%, the highest since 1981. This caused The Fed to take action, and raise interest rates .25%, to start battling inflation. Inflation stayed high, over 8%, and The Fed made bigger interest rate hikes this summer, which rippled over, raising mortgage interest rates as well.
Now, mid-August 2022, 30 year fixed mortgage rates are 5.5% to 6% for most buyers, about twice what they were in January of this year. Higher rates mean higher monthly payments, which, along with the recession or near recession (depending on who you ask), has had a huge effect on the housing market.
The effect is much bigger in the cities where prices really soared in the last couple of years, like my old high school era hometown of Boise, Idaho, along with spots like Austin, Tampa, Seattle, Nashville, Sacramento, and several others. In the video above, Nick shows where the home inventories have soared the most, in recent months, over 150% in some cases. Real estate in several U.S. cities now have high inventories of homes, and falling prices already. Spoiler alert, Boise, leads that list.
It may surprise many people, but California's largest major metro areas, Los Angeles, San Francisco, and San Diego are not in the top ten cities where real estate is slowing down right now. Neither is New York City or Miami. This regions are well known for huge ups and downs in real estate in the past cycles While the biggest California cities are slowing down, the smaller cities, mostly in the West and Mountain region, several with big tech sectors, are leading the way down in real estate right now.
Meanwhile, the Northeast, most of the Midwest, and the Plains states, overall, have real estate markets that didn't go as crazy in 2020 and 2021, and are much more stable now. You can see the national inventory heat map at several points in the video above, and get a feel for how real estate is doing in different regions. You can also sign up to gain access to that data through that video, in his info section below the video (not a paid link).
What about all of us here in Southern California? OK, I'm not in a position to even come close to buying a house, but I geek out on watching trends and seeing how multiple economic and social trends seem to be playing out. If you've read my blogs for a while, you know I've been writing about this big "coming recession" since 2018. For SoCal real estate trends, I've found that Christian Walsh, below, is a great source to see where the Southern California real estate market stands.
Christian Walsh of Wire Associates comes across like a guy next door, who happens to be a real estate agent. He's not all hyped up like many YouTubers. I've been watching his videos for well over a year now, and he puts out solid, straightforward videos, with the latest SoCal data, speaking to trends with his many years of experience.
Personally, my interest in real estate began when I moved ot Southern California during the late 1980's real estate boom, and in a couple of years, two people I worked with each made $100,000, in a single year, off their homes. I started learning about real estate, just in time to see the 1990 crash and long recession happen. My interests moved more to trying to figure out long term fianncial trends at that point, which I've been learning about and watching ever since.
As you'll see in Christian's video, SoCal real estate is slowing, but it's still in a seller's market for the time being. Watch the video, and his other videos, to get a fuller picture of what's happening in this region.
As Redfin, OpenDoor, and other major, tech real estate companies have found out, real estate is a very regional, local, and often neighborhood-based market. In most of the U.S. right now, the market is still strong, but that's in cities and regions where prices didn't take off to the moon. In 15-20 cities and areas, the crash is beginning, and in many other major metros, like here in the L.A. area, homes sales are still happening, but things are slowing down pretty quick. These videos should give you an idea where different regions and cities fall in the spectrum, right now, in August of 2022.
I'm adding one more link, another real estate agent and YouTuber, Kristina Smallhorn, "The Real Estate Whisperer." She has a ton of great videos on many aspects of real estate, and does long streaming videos with other real estate professionals, like the one linked below. She's from Lousiana, where the market is much different than cities like Boise, Austin, or Nashville. But she interviews and talks with pros from all over the country, so her videos are another great source of info on real estate in today's weird and crazy market.
I have no connection to Nick, Christian, or Kristina, and receive no compensation for plugging them. I've watched several videos form all three, and find them to be good, solid sources of info on different apsects of the national and regional real estate markets.
No comments:
Post a Comment