The Market Top Isn’t Here Yet in U.S. Real Estate

After Zillow’s exit from iBuying market and the Fed announced rate hikes people were speculating the end of the housing market boom was in sights, and while these will cause downward pressure on prices their is still an inventory crunch causing more upward pressure.

After Zillow’s exit from iBuying market and the Fed announced rate hikes people were speculating the end of the housing market boom was in sights, and while these will cause downward pressure on prices there is still an inventory crunch causing more upward pressure.

Investment Firm Blackstone, America’s biggest landlord, recently purchased an additional 12,000 units in the Sunbelt. The sun belt saw some of the hottest growth particularly in Austin, TX and Las Vegas, NV where there is a large influx of companies and people relocating from California.

US Sunbelt

Tampa, FL also had high growth from people seeking income tax havens with other amenities. nationwide prices in 2021 grew 10% yoy according to Realtor.com. JP Morgan believes real estate prices are expected to rise another 11% this year, but is offloading on its commercial real estate in NYC because they believe the work from home trend will be a more permanent fixture in the future.

What about builders? Are they getting inventory up to the needed levels to bring down prices? According to FRED they haven’t passed 2006 levels yet on new permits.

This doesn’t mean an 08′ style crash couldn’t occur before the graph realigns, because as we all know there has been a mortgage payment moratorium and forebearance under the CARES Act which does not officially end all assistance until September 30th, 2022. Tread carefully because we may be entering the end game of this bull cycle for real estate, but don’t let anyone tell you it is over yet.

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