US Homebuilding, new mortgage applications, closed deals, homebuyer sentiment, homebuilder sentiment, showings/foot traffic and actual sales of both new and existing homes are all tanking and have been for months. But actual prices have just started to moderate. At any other time, all of the above would have meant price COLLAPSE.
What gives? Current price support is basically a function of two things: supply not meeting demand and wealth effect created by nearly a generation of absolutely depraved central bank behavior and fiscal irresponsibility inflating the everything bubble. I suggest that the first is overblown and misconstrued while the second is very wobbly for all but 1%-ers and even they will feel what’s coming because the Fed doesn’t have their backs anymore and the blob can’t keep giving away free stuff to placate the booboisie without creating hyperinflation. It’s not that there aren’t enough available houses for those who want them, but that there simply aren’t enough people who can even aspire to buying one, so the only ones being built are for a small percentage of people, which is getting smaller very fast as investment portfolios shrink and stagflation + rising rates destroy buying power. However, if rates continue to rise, the naked emperor will be exposed in all his glory as the Gubmint becomes unable to pay for anything but debt service. Hence the priced-in belief amongst the financialization pros that the Federal Reserve must soon capitulate to save their bacon (but not the economy). Make no mistake, this is all about the Fed and FedGov policy errors which have been going on for a long time but are coming home to roost. They are between a rock and a hard place, both of which they created through stupidity, cupidity, mendacity or perversity.
The aging/dying baby boomers will have to downsize and transfer assets to generations with less capital to deploy and evanescent leverage. Meanwhile, young people are setting their sights on achievable goals and lifestyles which exclude climbing ladders in search of receding affluence as they are pulled away by the “let them eat cake” people, who are all fashionably “liberal”. This obviates household formation and child rearing. Perhaps the final act of boomers in their mostly uncomfortable golden years will be caring for the foundling generation as they increasingly require care themselves. The children who are born are, irrespective of race or skin tone, more likely to be illegitimate, poor and traumatized than was until recently thought possible in a developed country. Demographics and collapsing productivity will drive prices even if nothing else does.
SO, if King Brandon hasn’t gotten us into a nuclear war, destroyed our food production, eliminated the dollar as currency or caused massive power grid and water supply failures by then, Spring 2023 could be a good time to buy a house for anyone who can do so with cash — in a place that is most likely to bounce back economically, even if not as high as it was. Like it or not, that means moving to a red state or relocating to another country — and don’t bother looking in EU where your wealth will be confiscated, or in most cheap places where global economic decline will make safety and basic services dubious.
BTW, when enough capital has fled blue states their ability to keep their ponzi afloat collapses and their only recourse is force. They may soon try Reichstag-firing their way to full Nazi-dom; which is promulgated by the LEFT as they consolidate power in the vacuum created by weak opponents amidst economic catastrophe, just as it was in Germany in the 1930’s. Happy, happy, joy, joy.