West Side Real Estate Market Bulletin – West Side Rag
Welcome to this seventh edition of the “West Side Real Estate Market Bulletin”, presenting the main issues of the month:
- the impact of the midterm elections on our local market
- the state and outlook for inflation in our local market
- the situation and outlook for mortgage rates in our local market
In a surprising midterm election development, Democrats pulled a Senate takeover right from under Republicans’ noses, albeit by the slimmest of margins, averting Republican capture of both chambers and their concomitant policies of tax cuts. taxes for the rich and duty cuts for everyone else. Additionally, it is interesting to note that Trump-sponsored candidates have generally not fared well, suggesting that Trump’s influence as a kingmaker may be waning.
The effects of inflation
A shift in consumer spending from luxuries to basics (food, rent, gasoline) has occurred this year as the price of luxuries has risen along with everything else. (Refer to the “Consumer Price Index” graph below which represents a 7.4% increase for the year.)
Excessive inflation is the topic that has occupied this edition of the Bulletin, and rightly so, as it could be the catalyst that is driving our country’s economy into a disastrous recession. Over the past month or so, gasoline prices have come down somewhat, which is encouraging, but the annual rate of inflation increase has been close to 8%, well above target. by 2% from the Fed, implying the need for further interest rate increases and an increase in the likelihood of a recession.
The Fed’s Dilemma
The Fed is faced with a precarious balance: raising interest rates too little will not lower inflation, but raising them too much will lead to recession. After four rate hikes this year, the Fed appears to be leaning towards the latter option, so some degree of recession seems likely next year.
What do the tea leaves say?
Tea leaves say the real estate market is full of downside risk; adopting a “waiting in the weeds” strategy seems appropriate for the occasion.
For our purposes, the tea leaves are the “median sale price” and “supply (open listings)” charts. Both of these metrics indicate continued market weakness: prices are low due to a lack of demand from buyers in the face of uncertain price movements, and open listings are low as sellers are unwilling to accept higher prices. low for their units.
All data courtesy of Urban Digs
Are you planning to buy or sell an apartment in the coming year? If so, know that we are facing a volatile economy that could change direction at any time, but that’s not all bad news. Some very good deals can be made in a bear market if one is vigilant, well prepared and resourceful.
If you want to know more about this intriguing option, just click on the link to go through the methods of identifying and dealing with outstanding trades in the market.