I have had the opinion that the Fed would need to break a lot of things before it could break the housing market. But, I think there is a chance that the Fed doesn’t really break much at all. There is a lot of bold pessimism out there, especially among housing pundits. I don’t envy them. If your job is to have your finger on the pulse of the marketplace, and one of your competitive advantages is anecdotal insider perceptions, then you just can’t risk being blasé about a potential downshift in market trends. Unfortunately, I think this greatly hampers the value of that insider access, because the pundits themselves become very procyclical. In a way, it’s their job. But, it’s tough to do that job without overwhelming the natural ebbs and flows of the market with the ebbs and flows of the cherries you’re picking.
I agree with you on this, particularly when it comes to seeing where more chips fall come March 2023. My crystal ball tells me that there will be some more churn over the winter that manifests as post-Holiday slowdown and a stabilization of interest rates. Spring will bring some downward pressure on mortgage rates as inventory builds up, but builders should react with more starts in a more stable environment. And, if California keeps on strangling zoning codes, they could see a population uptick again coinciding with more multifamily starts and completions. (That may take a few years to bear real fruit, given standard construction timelines)
Conversely, April could turn out to be the cruelest month---with a Government shutdown, persistent inflation, higher unemployment from a burst tech bubble, and a vigorous trade war with China that continues to cause havoc to supply chains.
I agree with you on this, particularly when it comes to seeing where more chips fall come March 2023. My crystal ball tells me that there will be some more churn over the winter that manifests as post-Holiday slowdown and a stabilization of interest rates. Spring will bring some downward pressure on mortgage rates as inventory builds up, but builders should react with more starts in a more stable environment. And, if California keeps on strangling zoning codes, they could see a population uptick again coinciding with more multifamily starts and completions. (That may take a few years to bear real fruit, given standard construction timelines)
Conversely, April could turn out to be the cruelest month---with a Government shutdown, persistent inflation, higher unemployment from a burst tech bubble, and a vigorous trade war with China that continues to cause havoc to supply chains.