New homes priced below $200K are now 0% of the market.
They were 40% of the market one decade ago.
$500K+ homes have grown from 17% of the market to 38% of the market during Covid.
Expect both of these trends to reverse this year.
John Burns
1,771 posts
John Burns
@johnburnsjbrec
@jbrec founder and teammate, posting about our passion solving today's housing market conditions to help our clients navigate to a better tomorrow.
- Home prices are declining. This won't show up in Case Shiller or other numbers for probably 8-12 months, which is why we survey 1000 real estate agents every month. #housing
- Investors now buy 33% of all the homes in the country. We define an investment to include any property where the property tax bill is sent to another address. I will post the % that are large vs small investors at this same time tomorrow.
- I have never seen home builder financial statements as strong as today. Here is what the 7 largest reported last quarter: * $100 billion in revenue * 27% gross margin * 15% after tax net income * 21% net debt / cap ratio * $12 billion in cash * $25 billion in very long-dated debt
- Home prices tell the migration story pretty well. U.S. home prices are 67% higher than they were before the Great Financial Crisis in 2008. +174% higher: Austin +152% higher: Denver +146% higher: Dallas vs +20% higher: Chicago +22% higher: New York +28% higher: Wash. DC
- Some good news. Not one building material dealer told us that the supply chain got worse in August.
- Homeownership now costs $839 per month more than renting, which is almost $200 more than the previous high this decade! Methodology and additional explanation here: ow.ly/vtkj50Jvn4f
- All those homes built in the early 2000s are heading into their prime remodeling years. And I am living proof. My family moved into an AirBNB this week while our floors and bathrooms get redone.
- 91% of metro areas are now high risk. Our Housing Cycle Risk Index(TM), developed almost 20 years ago, is flashing red. It is fully mathematical and still being propped up by artificially high job growth (due to the recent recovery in the hospitality sector).
- 73% of homeowner mortgages are less than 4%, which is a great reason to stay put. I recently learned why those with high interest rates don't refinance. They often have such a small remaining balance that it isn't worth it for the lender to offer them a refi.
- Home prices in the West are getting hit harder, in part due to the tech boom and bust, which helped fuel a speculative investing (not rental income investing) boom and bust. I will be presenting the detail behind this graphic on our monthly client webinar this Thursday. @jbrec
- The least discussed housing topic is the 34.4 million Americans who own their home and have NO mortgage. Massive wealth creation. Not “locked in” with a low rate and can move whenever they want. This is 25% of American households and they are driving the economy right now.U.S. Housing Market Recovers the Nearly $3 Trillion It Lost, Hitting Record $47 Trillion in Total Value redfin.com/news/housing-m…
- What is going to happen to flippers who, by definition, bought a home in the last year and need to find a buyer? They seem a lot like home builders to me, except perhaps with higher debt %. 12% of the resale volume in Dallas has been homes that have transacted twice in 12 months.
