Home Prices are a Lagging Economic Indicator
Most of the declines in house prices happen AFTER a recession ENDS!!
The S&L recession ended in March 1991.
The Great Recession ended in June 2009.
Looks like there’s a lot of truth to the idea that most, or at least a lot of, real house price declines happen after a recession ends.
Of course, there were no real house price declines before, during, or after the 2001 Dot.com recession.
Nevertheless, it seems likely to me that we’ll see a recession start within the next 6 months or so.
Phoenix Single-Family Houses = 1.9 Months of Supply
Similar to same weeks in 2017 and 2018
A lot more than in 2020 (0.7 weeks) and 2021 (0.7 weeks )
But a lot less than last year (3.2 weeks)
Months of Supply will increase into January as it does most years
The Foreign Company That’s STILL Buying Houses
Click on the graphs to go to the full-size, interactive version.
Notice how very small changes in New Listings and Solds eventually cause HUGE changes in the number of houses For Sale and house Prices (see graph above).
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.
So many anomolies - so many geopolitical and climate driven events.
At the very core of survival the three essentials have always been "shelter, sustenance, and medical".
No reason to rehash the "sustenance" question. The climate driven threats to water and food supplies already exceed what I believed would be the worst levels I would witness before I died. (I've got a couple of good decades of life left).
The cost of shelter already exceeds the 2004 bubble - far beyond the 30% of income standard.
In response, birth rates are dropping. Population aging. If you can barely afford to live on your own, you certainly will rethink making some babies.
Those phenomenon are intensifying - not abating. So what does it all mean for housing?
The shortage of family-friendly housing is a major reason for declines in the sizes of families. Or decisions never to start a family. That trend has been going on in Arizona since 2011. But we're just now figuring it out. Which is a decade too late.
Now toss in some mega-events that could come from all the geopolitical/climate driven stuff.
1. Major curtailment of water use. Meaning green grass. Which includes golf courses. And monstrous charges for water supplied to second mega-mansions used by an aging couple for a few weeks or months a year. If the golf course community you live in suddenly becomes an immense financial burden (and no one wants to buy in), what happens to the North Scottsdale housing market?
2. Medical costs blow out of sight - massive demand to care for the monstrous and dying Boomer generation. Severe shortage of workforce to care for them. I defy anyone to predict the market for critical healthcare workers by 2035. Whatever you bet, I'll take the Over. We're all going to under estimate that crisis.
3. Immense shift from mega-mcmansions to high density housing. We'll be oversupplied with 3/4 acre 4,000' foot 5 bedroom homes and undersupplied with 1-2 bedroom condos/townhomes/apartments.
4. I could be full of shit.
5. I doubt it.