I should have known better. Last week, I shared with you the latest unemployment numbers – and I took them at face value. Which is where I made my mistake! Of course, if I listen to my own advice from previous podcasts where we looked at unemployment, I would have realized there was likely more to the story than what they are sharing in the headlines. Of course, there is. In fact, the actual data implies the opposite of what the talking heads are suggesting.
In this weeks show we are looking at a few different bits of economic news that could push our real estate market one way or another. Not a lot of certainty in todays show, but I will offer what I think are prudent actions for buyers, sellers and investors to prepare for the possible eventualities
We are not quite ready to look at the full data for July 2022. However, my weekly 7 day snapshots of real estate data are showing a growing surge of home price drops across the board in Santa Clara County. This is true in San Jose and my home turf of Morgan Hill. It is also effecting most other communities in the county.
Things are happening fast! In todays show we pass around an idea. Does it matter what starts an economic downturn? When we had the big real estate bubble, car loans got hit to. Now that car loans have apparently been as stupidly handled as mortgages were in the early 2000s, can we expect a fast follow on downturn in the housing market?
The clouds are looming on the horizon! The increases in interest rates have not had the desired effect on inflation. So, we can expect to see a more aggressive policy where increasing interest rates higher and more quickly will likely happen. That will ultimately mean much higher mortgage rates – likely before the end of 2022!
It is time for a glimpse into the crystal ball and see if we can’t use information we have today to estimate what is coming by way of a real estate downturn. There are several interesting trends that tend to feed the idea that something bad is around the corner, so today, we will review them and see what we might think they will do to our real estate markets.
On todays show we review recent data that discusses the most at risk and least at risk counties in the United States. Many of the real estate markets that are showing the most promise are in the Southern states – which tends to go along with past data we have discussed regarding the most robust markets.
This week, we are going to gaze into the crystal ball. Several things are going on right now – including the growing use of the adjustable rate mortgage – that I believe set the stage for a potentially market killing outcome. Follow along with me in todays show and see if you agree. If I am right, we could be heading into some very tough times over the next few years.
In just a few weeks, we have seen real estate inventory jump from an 11% increase to an 18% increase! As we face other challenges from increased interest rates, inflation and recession – we may see a unique opportunity for buyers and investors – and a signal to home owners to review their situation.