They don’t understand the housing market, IMO. (I’m not an investment advisor.)
1. Federal Reserve thinks housing renovations, pent up demand for housing, owners' equivalent rent (part of the CPI) are reasons to keep raising interest rates.
2. IMO, with this outlook on the housing market, they will not reach an appropriate interest rate above inflation due to several facts in the data.
3. Because builders are not building & haven't been adding to our existing housing stock, the country has a pronounced deficiency of housing units. Several millions.
4. The largest generation since the Baby Boomers are creating pent up demand for housing. They are demographically in the typical home buying years. This is not going to change. It will still be there many years from now.
5. There is not enough inventory to support the number of licensees.
6. The number of real estate agents will ultimately decrease around the time of renewal cycles. Many agents who are unable to make a living right now in the real estate industry have other part or full time jobs….
7. Which is adding to the lack of CUSTOMER SERVICE. They are listed on websites, but have ghosted the public. They do not communicate because they're actively pursuing other paying work.
8. Many publicly traded & private real estate & property technology companies HAVE NO CASH CUSHION and will not be in business very soon. They have no ability to refinance any bonds they've issued in this interest rate environment.
9. Many with debt have no ability to be acquired by stronger companies in the industry. NO ONE is going to acquire them with burdensome debt & no cash flow.
10. This means that even if SALES numbers are down & PRICING of inventory is not RISING as fast as it was recently, SALES PRICES (comps) are stable, just not rising as quickly.
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