Forbes is reporting a significant slow down in the Real Estate Market. The interactive map in the article (link at the bottom) shows the regionalized areas most impacted.
Highlights from the article:
““Today’s layoff is the result of shortfalls in Redfin’s revenues, not in the people being let go…with May demand 17% below expectations, we don’t have enough work for our agents and support staff,” wrote Redfin in a statement announcing the 470 job cuts. Compass also cited the housing slowdown as the culprit for its 450 layoffs.”
“In April, the U.S. housing market entered into slowdown mode. But as data rolls in for May and June, we’re learning that this isn’t a mild slowdown—it’s an abrupt shift.”
Definitely in our area as well for sellers. I’ve seen downshift in title closings more to independent requests which are still fewer. But it’s moving, even if not at the pace we’ve been feeling the last few years.
Still seller’s market but investors are still buying. I was scheduled to do 4 buyer’s deals on the 20th turned into total of 8 closings instead on same day, same time, same location all are investment properties for same client.
Why is it getting harder to make a real estate profit every year? I can’t believe this is happening to us. Unfortunately, the situation on the market doesn’t allow many people even try new businesses and ideas
This is a market fluctuation. The business cycle, either macro- or micro-, is never on a constant rise upwards. In my market real estate is still healthy. Home builders are busy due to the strong desire for homes.
Two years ago I launched a Tax Preparation business to hedge against Real Estate. With the Inflation Reduction Act, and the anticipated rise in audits, I’m expecting to see this new venture grow. Opportunities are out there, you’ll have to look for them, the dig deep to analyze if its a good fir for you and will work in your market.
Moreover, it is even scary now to invest in real estate. Such taxes politics is driving me crazy. My friend from frequentislander.com says that the beach houses she owns will be less profitable for her because she doesn’t want to raise the price and leave the rent affordable. I think it’s unfair that taxes keep growing
Property Taxes generally float along side property values. When the Market is HOT and valuations rise so do taxes. In my area we saw some homeowners get hit with a 50% jump in valuations in 2021. I’m anticipating a rise in the foreclosure market and Tax loans. Distressed properties can make good Real Estate investment opportunities.
Ah Yes! The market. I remember 2010 with the S & L debacle. This is similar…home prices adjusted 40% Yes 40% reduction.in price. And it happened very quickly. Home prices here in south Florida are at least 30% above value. My symphony is for the buyers who have purchased this year. it will take years for the market to adjust.
Mark,
It is Evan out in Tucson, AZ. I would love for you tell me more about the Tax Prep Business that you launched. I think it sounds like a great idea and compliment to Signing work.
Let me know if you have any time to give a some advice in the coming days or weeks.
@Bobby-CA AutoCorrect slays many of its users when they hit “Send” prior to a quick review of the translation from the spoken words into written . . . yes, I’m presuming that his was a verbally created post due to the apparent word ‘substitution.’
I’ve had some real head-scratchers that (thankfully) I edited prior to hitting “Send!”
Talk about head-scratching? To deal with runaway inflation (ie increasing prices everywhere), the Fed increases the interest rate, thereby making the cost of borrowing higher, which restricts lending for real estate purchases, refinances and renovations, and business lending. The higher interest rate then trickles down to the consumer in the form of higher prices, increased rates for personal loans and credit cards, etc.
The goal is apparently to slow down the economy, thereby halting inflation. Okay. But does it have to lead to a recession as well? Can’t additional factors (such as the massive leap in the cost of gas and a huge lack of workers leading to record numbers of small businesses closing their doors) be taken into account?
Yes, the goal of increasing the prime interest rate is to soak up the flood of cash that was injected into the economy going back to the Obama and Trump administrations. A receding economy is an unfortunate side affect to this effort.
Looking at the jump in fuel costs were driven by several factors:
Inflation itself.
International political matters [Invasion of Ukraine, Russia cutting of Gas deliveries to Western Europe, etc., and;
The Biden administration terminating the sale of new petroleum leases on Federal lands in early 2021. This artificially created and restriction on the supply side of the supply/demand equation.
I’m not placing all the blame on Mr. Biden. His decision to stop the sale of drilling leases was only one of several factors that coalesced. Rising fuel costs impacts everything that gets transported to the end consumer such as food and consumer goods.
Here’s my theory about the current worker shortage. We lost approximately 4.5 Million workers during the Covid Crisis. This includes a little over 1 Million who died, and 3.5 Million who retired from the work force. This created an immediate shortage of workers, especially for the low level starter jobs. To attract workers. Businesses had to pass these cost on to their customers.
We saw rocketing inflation during the Carter administration. Paul Volker, the Chairman of the Fed, had to rapidly raise interest rates to cool the economy. The result was a jump in unemployment and a hard recession. Less than a year later the economy recovered and hiring increased.
The economy goes through cyclical changes. Its painful when its down and consumers are elated when it’s going up. It was Harry Truman who said, “If your neighbor gets laid off, it’s a recession. If you get laid off, it’s a depression”.
that (thankfully) I edited prior to hitting “Send!”