The Associated General Contractors of America has reported that falling prices for diesel fuel, lumber, and steel have cooled inflation for materials and services used in construction. However, relief may be short-lived, as an analysis by the Associated General Contractors of America suggests that the recession in 2023 will have unique markers compared to past economic downturns. Some of the questions top of mind include whether construction costs go down in a recession, whether any projects, particularly those in the public sector, will be halted or delayed, or if potential financing sources will dry up.
In a recession, money seems to get extremely scarce, which is when contractors get in trouble. It’s difficult to pay for materials and labor when you’re not getting paid by the owner or general contractor. Commodity prices will come down before the end of 2022, but supply chain issues will persist for years. A recession is on the horizon in 2023, a leading indicator of future economic downturns.
Building materials are running short in the UK, leaving DIY projects in doubt and building companies under pressure. The Construction Leadership Council has warned that cement, some electrical materials, and some cement are running short in the UK. During the 2020 recession, construction performed relatively well because the government allowed work to continue on building sites, in stark contrast to shuttered shops, pubs, and other businesses.
A falling housing market means a pause or slowdown in construction activity, and less competition for raw materials. Suppliers that stockpiled over the last year in anticipation of an economic upturn are often more than willing to reduce their prices during a recession. A recession can allow for better pricing on everything from labor costs to the price point of building materials.
📹 Home builders trigger major Recession Warning. Supply spikes to 2008 levels
Home builders are reporting the biggest growth in unsold inventory of homes since 2008. With Reuters reporting that the supply …
How long do recessions last?
The National Bureau of Economic Research (NBER) has documented that economic downturns have typically persisted for approximately 11 months since the Second World War. However, the precise duration of these periods is inherently challenging to ascertain. In general, such downturns have been observed to last between six and 18 months.
How to prepare for a recession?
To prepare for a recession, regularly assess your budget, contribute more to your emergency fund, pay off high-interest debt, maintain your usual contributions, evaluate investment choices, build up your resume skills, and brainstorm innovative ways to make extra cash. The U. S. unemployment rate reached 13 in Q2 2020, the highest since the Great Depression. To stay ahead of economic emergencies and opportunities, maintain healthy budgeting and avoid bad financial habits, especially during the COVID-19 pandemic and other unforeseen circumstances. Intuit Credit Karma receives compensation from third-party advertisers, but their opinions remain independent.
How long will a recession last?
ITR Economics predicts a macroeconomic recession in late 2023 that will persist throughout 2024. This is similar to the COVID-19 pandemic and the Great Recession in 2008, which led to a downturn for business leaders. While the 2024 recession is expected to be mild for US Industrial Production, it will not be mild for every industry. Some industries may experience minimal effects, while others will experience steeper declines due to the recession’s profound impact.
The Federal Reserve Board’s aggressive increase in interest rates in 2022 to combat high inflation led to the extension of the anticipated mid-decade recession to 2024, causing the recession to be more severe.
What jobs won’t survive a recession?
During an economic downturn, jobs like hospitality and tourism are most at risk due to reduced vacations and travel. Entertainment and leisure industries are also at risk due to the shift towards affordable, at-home entertainment. Factors like COVID-19 and AI have transformed the workforce, leading many workers to seek recession-proof jobs. The economy is cyclical, with periods of high and slow growth. Some high-demand careers offer more job security than others. For 2024, consider the best recession-proof jobs and future-proof your skills to ensure a secure future.
How does a recession affect construction?
In a recession, the construction industry faces various challenges, including volatile market conditions, changes in consumer sentiment, changes in mortgage rates, increased competition for fewer projects, and pressure to innovate. The materials market can become highly volatile, making budgeting and quoting projects challenging. Consumer sentiment plays a significant role in the residential construction sector, and economic downturns can decrease homebuyer confidence, impacting demand for new homes and major renovation projects.
Mortgage rates can also influence the real estate market, leading to decreased buying activity. Competition for fewer projects increases, leading to tighter margins and potentially undercutting bids to secure work.
To navigate through a recession in the construction industry, firms must adopt a strategic approach that considers both immediate financial realities and long-term implications of current decisions. By understanding common hurdles and the broader impacts of economic uncertainty, firms can better prepare themselves to survive and thrive during challenging times.
One effective strategy for surviving during and after a recession in the construction industry is diversification of services, such as maintenance, repairs, and renovations. Focusing on niche markets, such as healthcare, where construction is essential regardless of economic status, can provide stability. Enhancing cost-efficiency through lean management techniques can reduce waste and improve profitability, making the firm more resilient against economic pressures.
What type of assets do well in a recession?
A recession is defined as an economic downturn. During such periods, it is possible to make advantageous investments in cash, large-cap stocks, and gold. However, it should be noted that stocks and cryptocurrencies that are particularly sensitive to market fluctuations may experience heightened volatility during a recessionary period. In August 2024, a global stock market panic and a weak U. S. jobs report prompted concerns about an imminent recession, which could have prompted investors to sell their holdings at a loss.
What is the meaning of recession in building?
The term “receding” is used to describe the act of withdrawing or reshaping something, which is often observed in the context of economic contraction. In 2008, China and India did not experience a recession; rather, their economic growth merely slowed. The term “recession” is derived from the Latin word “recessiōn-“. Nevertheless, stocks that remain in the hands of investors continue to exert a dominant influence over the broader market rally.
What goes down in value during a recession?
During a recession, stocks and high-yield bonds lose value, while lower-risk assets like gold and U. S. Treasuries appreciate. Large companies with solid cash flows and dividends tend to outperform in the stock market. While there’s no need to panic, paying attention to spending and being cautious of unnecessary risks is crucial. Positive steps to improve during a recession include adopting a realistic budget, establishing an emergency fund, and generating additional income sources.
Will there be a recession in 2025?
The global economy is expected to enter a recession by the end of 2024, with a 35-45% chance of doing so by the end of 2025. This communication is provided for informational purposes only and is based on reliable sources. JPMorgan Chase and Co. or its affiliates and subsidiaries typically trade in securities, financial products, and other asset classes discussed in this communication. However, J. P. Morgan does not warrant its completeness or accuracy, except for disclosures related to J.
P. Morgan and its affiliates and an analyst’s involvement with any company or security. Any opinions and estimates are the opinions of the author as of the date of this material and are subject to change without notice. This communication is not intended as an offer or solicitation for the purchase or sale of any financial instrument and does not provide individually tailored investment advice. Clients should make their own independent decisions regarding securities, financial instruments, or strategies mentioned or related to the information.
Periodic updates may be provided on companies, issuers, or industries based on specific developments or announcements, market conditions, or other publicly available information. Clients should contact analysts and execute transactions through a J. P. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. This communication may not be redistributed or retransmitted without express written consent from J. P. Morgan.
Does recession affect production?
In the context of a recession, the decline in consumption is typically modest, whereas the reduction in industrial production and investment is more pronounced than the contraction in GDP. These declines frequently coincide with a reduction in international trade, which in turn gives rise to an increase in unemployment rates and a slight rise in inflation. Furthermore, economic downturns are frequently accompanied by turbulence in financial markets, which can lead to a decline in the value of both residential and equity properties.
Do assets go up in a recession?
During a recession, the economy contracts, unemployment increases, and consumer spending and corporate profits decline. This leads to a decline in economic fundamentals and pessimism, causing asset price growth to slow or even contract. The recovery from a recession typically results in a strong rebound in economic activity and a resumption of confidence, leading to higher asset price growth. Australian asset returns from the past four decades show this pattern, with real total returns for equity exceeding 12 on an annualized basis in the two years before recessions, and commercial real estate returns showing a similar pattern.
📹 Will building costs go down in 2022?
How Much Does It Cost To Build A House Uk 00:22 – Will building costs go down in 2022? 00:47 – Will building materials go down …
While everyone in the mainstream media continues to refer to the “housing shortage”, supply on builder lots is now at the highest level since 2008. This is causing massive inventory spikes in many parts of America, particularly in the South. Head to reventure.app and search the home value and inventory trends in your market to stay up to date on what’s happening.
I moved from Tampa to Santa Clara a few months ago and I’m thinking of purchasing a single family home there, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? Looks like NVDA, TSM and AMD and AVGO are strong buys this week.
To my own research In USA, individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.
I lost over $70K when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that’s what everyone said. I’m still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I’m really grateful I find one source to recover my money, at least $9k profits weekly. Thanks so much Mrs Judith M Layton
just sold a property in Texas and I’m thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I’m really just confused at this point.
The housing market is inflated and oversaturated with homes being on the market with astronomical price tags just stagnant for months. It is very clear that or generation will be likely one of the most devastating bubble pops in modern history. Seeking best possible ways to grow 250k into $1m+ and get a good house for retirement, I’m 48.
I got news for you brother, New Yorkers have been invading Palm Beach County for past 50 years or more. That’s why I left my hometown of Delray Beach and moved to Northern Florida over 30 years ago. Native-born Floridians like me have a saying, “the further south you go in Florida, the more north you go.”
Florida is nasty hot from May to September. Too hot to go outside and do anything past 10am. My dad’s pool felt like a luke warm bath. People up north think FL is a real live Magaritaville where you can take your grandkids to Disney every so often. Not sure how standing in a blazing hot themepark is “magical”
The construction industry is completely dead in WA. One major lumber mill recently closed down, the lumber yards are empty and I don’t know any carpenters that are still working except for one who works for Boeing. Six out of the 24 homes in my little country community with each home having at least 5 acres are brand new residents. I feel sorry for them because they all purchased at the top of the market in bidding wars. Now one of them is loosing their job in the construction industry with a brand new baby. I hope that they make through OK because that must be very difficult to afford all that they have going. The same thing happened to me in the last housing crash of 2008 but I still had work till 2010. I didn’t have any more work so I moved to a different area, rented for two years and then purchased a lot at the bottom of the market and built a debt free home on the nights and weekends without hiring anyone to help me. I did it all by myself except for on concrete day. I recently sold that home at the top of the market after doing a lot line adjustment so that I could keep the other half of my land and am building another home on the other half. The land was free minus the small cost of getting the lot line adjustment. I’m sitting pretty well after I did that and when the market crashes, I will be purchasing a small apartment building. Probably a tenplex or something like that and retire early so that I can purchase a sailboat and sail around the world and still keep my place on the other half of my lot.
I lived in Florida. It is flat, humid, and buggy. You also have hurricane season. Don’t miss it at all. That was back when it was cheap to live there. Couldn’t imagine living there now with the high costs to boot. I hated always having to have the bug guy come out and spray the inside and outside of the house. Plus, there are the cockroaches, that they give the pretty name of Palmetto bug. It’s a cockroach. I don’t miss any of it. If you have pets, you get the displeasure of dealing with the fleas too. A lot of people who moved there will probably get sick of it eventually. This year is predicted to be a terrible hurricane season. We will see who stays, and who leaves.
The problem with most Developers is that they fell in love with building nothing but McMansions when Interest Rates were below 5% . Profits were High and people could afford the payment . Now the opposite is true . Interest Rates are at 7% and the Homes are still north of $400,000.00 . Florida has another serious problem as Property Insurance Costs from Orlando Southward are nearly the same as a House Payment was Pre-Pandemic .
FRED economic data shows 577,000 new single-family homes in July 2006 peak and 481,000 in May, but your point is correct nonetheless. The trajectory shows definitively that inventory will eclipse 2006-2007 by a lot, and as unemployment triples over the next 2 years, home values will crash 60% in TX and FL, 50+% in AZ and TN and over 40% everywhere else in the US. I’m actually convinced old fixer uppers in FL will crash 70% because I bought an old fixer upper 1 mile from the beach in 2009 for 65% off of 2007 values and it dropped another 6% in value in 2010 and the math is so much worse this time in terms of unaffordability relative to the median income, it’s not even in the same ballpark.
Personally I think South Florida is a cesspool. I grew up in South Florida. The crime, the con-artists, the traffic, the high taxes, the aging infrastructure is horrible, the flooding is really bad even if it rains a little. The gangs, flop houses and drugs are bad. Don’t believe the charts, they don’t report the official stats. I finally escaped when I was 35. That was in 1997. I moved to North Florida. Completely different good people.
I live in Huntsville Alabama where they have been building new homes and apartments like there’s no end in sight. I don’t understand how builders think this is sustainable. To me it seems like they’ve overbuilt but that’s not stopping them. I can’t imagine how this can end well. They’ve ruined the charm of the town.
I am 71 and survived the late 70s/early 80s oil embargo and the 2008 recessions, but what is coming I believe will be far worse the longer the FED artificially props up the economy for the 2024 elections and the government keeps spending like drunk sailors. To those complaining about 7% mortgage rates my 1981 rate was 16%. After several year we refinanced at 9% and living frugally paid off the mortgage in 11 years all while maxing out my 401K. Retired now and living comfortably in the same small ranch house. Today the young just starting out and those in their 40s and 50s with a family and all of the associated expenses are just trying to survive to the next week let alone even contemplating the fantasy of retiring. Over the decades wages have simply not kept up with the real inflation rate which is at least 2 to 3 time the bogus rate reported by our lying corrupt government. It may be too late, but carefully vet the candidates before casting your votes. Think logically considering accomplishment, not emotionally on personality.
It has been over 25 years since I left Nashville and moved to Broward County, the best decision I ever made, and I do not regret it! I loved this area; it is very beautiful. I wanted to be in Florida but not in the hustle and bustle, and I found something similar to Nashville in Broward. My best wishes to you in your goals, and I hope everything goes well for you.
Instead of building these depressing, isolated houses, they should build a new walkable town or city with a main street and things going on, where you arent a slave to a car. The cities are so overpriced because there is so much demand. People want to live in communities not suburbs. We need more city like housing
Hi, Nick. I’ve been a subscriber to your Youtube website for nearly 6 years. I’ve learned a lot from you. I think setting up a Reventure App office in Florida is an excellent idea. Like you said, the Sunshine State seems to be a microcosm of the wider US housing market — the move would make a lot of sense strategically. I live in Central Florida neat Orlando, so naturally I think you should pick the Greater Orlando market to set up shop! You recently visited Davenport, the town where I live. I’m sure you will let us know if and when you decide to make Florida your (second) home. Keep up the great work!
This crash will be worse than 2008. Reason why is there is not much rate relief that came be offered to people. In 2008, no one had a 3% had lowering rate made a big impact. It will only help a few this time. From the commercial lending side SBA lending has been on steroids for the past 15 years. The crash will bottom out when commercial real estate becomes affordable for small business again.
That weather analogy was right on point. I lived in the Fort Lauderdale area for 8 years in the first part of 2000’s. My Camaro didn’t have ac and I was sitting in traffic waiting for it to move and I fainted from the heat. I was young and fit back then. Still it knocked me out. It was probably 120 in the car. Anyone, especially the over 50 crowd need to think very seriously about their health before moving to Florida. If you have any kind of heart issues, do not even think about it. Unless you don’t mind staying in an ac environment for the rest of your life. Be prepared to pay a couple of hundred bucks for electricity every month depending on how big your place is. Budget for the cost of ac repairs. Walking around, playing sports, forget about it. The only place outside that’s tolerable is at the beach because of the breeze or if you have one, by the pool. So even in a few years when prices will be 50% lower, if you can’t take the heat, don’t want to pay a fortune for utilities, stay away.
Jupiter, FL is a very nice place to live so I would say that would be a good place to open your shop. You want a good place to live and work so it’s not all work and no play/ fun. You want your home to be a peaceful location where you love living there. For me, I like the water front on acreage with a nice yard to relax in.
Yep I’ve been in New Construction since 1981. I have seen many booms n busts. We are do…Florida will be first with Texas. Im in Arizona We are sustained by Californians! Every single day. Our inventory isn’t has high…actually low for affordable homes… Big Money homes are selling n small cheaper homes….no middle class 😢
Florida, we have been here 6 years from MN. You have to golf, play pickelball and go for walks between 6:30am and 10:00 am. After that time you need to either be at the beach or pool or inside in the AC. It is like this for 9 months. The other 3 months it can be brutally cold, down to 30 in the morning but 75 mid day so during those 3 months. Stay inside morning and evening and play outside mid day, exact opposite of the 9 month summer. It is still better than combatting blizzards and treacherous driving and dark at 4pm all winter.🥶 no thanks.
Use to live in Orlando and what you said about taking a shower in your clothes and walking outside in the wet clothes is right on. NOW I live in Arizona that was over 115 today. The way I tell people the how it is different than Florida is “Go put some cookies in the oven. When they are done, and you open the oven door to grab them, and that heat hits you in the face and you wince! “That is what waking outside from the AC of your house and car feels here. 🙂
What sucks even for those who came here to Florida and paid these out-of-control prices for these houses are going to owe 2 to 3 times on those houses than what they’re going to be worth. I talked my brother out of buying a new house about 8 months ago, I told him to wait at least a year because things are going to crash. Housing prices GRADUALLY increase, so when you see their prices skyrocket to over double or more in a short amount of time, you can bank on the fact that it will not last, It can’t last, that type of thing is not sustainable.
at 4% unemployment and with golden hancuffs still in place. This is just a trickle when unemployment goes to 5% and beyond and the fed cuts rates then the dam will really break and inventory will double. New listings are still about 50% lower than pre pandemic and inv is still rising fast. Almost 0 demand.
I’m from Louisiana, I moved to Phoenix 2 years ago, I try my best to explain to the PHX locals how hot and nasty the south is. I tell them Florida is the hottest place in America due to what you described. I would be Texas/Louisiana second. That humidity and moisture in the air is so miserable to live with. It’s like living in a sauna. I like your description of taking a shower and not drying off though. Will use that one
Long island NY open houses get tons of traffic and bidding wars. They just don’t build like The South does because we don’t have the room. I am 56 and will be fleeing South myself, and I just equate the heat to the cold. 3 months here we kinda stay inside cause of cold,just reversed for the South. Florida’s builds are just really atrocious and anyone with an eye can see it immediately as I did
I moved to Florida after college in 1982. My 1973 beetle which I drove down to Florida did not have air conditioning. I got a job as a stock broker in Palm beach and I lived in Palm Beach Gardens. In the summer months I would start out wearing my white dress shirt and my suit. By the time I arrived at the office I would jump into the men’s room and change my dress shirt for another white dress shirt because my shirt was soaked with sweat from the drive to the office. It was so hot, I’ll never forget it. My first bonus check I drove to Roger Dean Chevrolet on Northlake Blvd and I bought a 1983 Chevy Camaro with air for $9,200. Florida get really hot in the summer followed by thunder and deadly lightening storms.
I was born and raised in Florida.I’m well traveled 20 years Army. Live in Miami now just to sell my Mom’s estate. Took care of her for 5 years. I love FLORIDA ❤️ FLORIDA has never had an Income to sustain this type of housing price market 🎉🎉❤❤. Why did all these builders come here. Did anyone do the numbers on income. And Lake Worth in West Palm 🌴 is a Drug with a lot of Rehab centers. Do your homework when buying in Florida Nation.
I’m hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I’ve been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Nick, with the El Nino changing over to a La Nina fast, it is predicted to be a really bad hurricane season this year. I would avoid Florida. Not to mention that the problems with insurance they already have, it will only get worse after this hurricane season. There has got to be a better place to set up shop. I wouldn’t move to Florida.
Great idea to move to Miami, Florida! I’ve been perusal you lately and learning a lot with your articles, thank you!!! I’m in the city of Sarasota, Florida and prices are by the roof. Builders are changing established neighborhoods and making them more expensive. Would you like to come by and make an analysis of the area?
Many many homes become unaffordable due to rising insurance and property taxes. My property taxes and home insurance has gone up for the past THREE years and not by a small amount. So let’s say a young couple qualifies for a mortgage, then add 4,000 in property taxes and 4,000 in insurance and you now can add about 670 dollars a month, so if the mortgage is 2000 plus 670 you have a 2670 payment. I get the double whammy as I live in a city so I get the double whammy on taxes. The country is losing its middle class. Builders have competition. There is no competition in insurance and the crooked county and city assessors and yes they are legal crooks.
The housing supply has increased due to interest rates are high, not inventory. The lumber prices has dropped below 400, normal is 500 b/c the builders can’t sell homes due to the high interest rates, not demands. When the interest rates drop close to end ot the year, the prices of these homes will sky rocket and supply will drop. Watch folks. These doomsayers are telling you only their side but ignoring the rising interest rates. Watch the interest drop and you will hear these people sing a different tune.. most likely the increasing debt ceiling… but never that they were wrong.
I make a pretty good living and I’ve been eyeing houses in Florida and Georgia but I’ve held off because the cost of owning a home HOA fees and rules, property taxes fluctuations, and home owners insurance makes owning in Florida very unattractive. I’m in Colorado and prices are very slowly coming down but definitely no where near where they need to be. Also homes here are in my opinion over sized, this will increase the over all operating costs of the home, property tax, home owners insurance, heating and cooling costs. We don’t have insane HAO fees yet but I imagine they’re around the corner. Colorado has fire and hail which means regional home owners insurance will be high. We’re also starting to get extreme weather like monsoon style rains storms (avoid living at the bottom of a hill).
Nick, you are the smarter dude I know. You manipulate people with this bill s charts for years. And yet, prices still going up every year. You just f’ed your audience from bulging real wealth. Now they missed out on historically low interest rate and affordable home race. Even there is a drop in price, it’s slightly low from all time high. You f’ed them good bro.
I’m 45 minutes north of Tampa, I’d say over this way based on better real estate pricing and significant IT infrastructure and potential staff. Miami has always been very underwhelming when I’ve gone there, Tampa and Orlando seem to be more modern cities, more middle class and better opportunities for effectively less money with excellent resources. My $0.02
I had to travel all over Florida for work and it SUCKS! The heat is so bad that you never want to leave your house. Traffic is terrible, you get sand everywhere and the bugs are as big as mice. Then you have the people, mostly a bunch of whack jobs and weirdos. Once you move there you shouldn’t be able to leave.
This might be true in many southern states because they massively overbuilt new homes to attract People from out of state. California is still the exception, most counties (LA, Orange, Ventura, San Diego) there is very low inventory due to new home builders moratoriums. Property values have doubled in just 10 years. As far as many people leaving California, they are quickly replaced by wealthy Chinese, Taiwanese, Japanese, Korean who are buying a lot of properties in preparation for when their kids come to California to attend the many universities in the state.
BF is a retiree that pulled the plug on New England buying in Florida..while I purchased a 2nd duplex in Greater NYC FMV for both buildings went up 9%. His FMV (Venice Florida) went down 2.2% For the first time ever my net worth is more than his and from FWIH 2024 Florida will take another hit (2%?) Overbuilding in 2024 has hurt Florida, TX, AZ and Northern CA Bordenaro is saying Marin County properties are now 100k down from 2022…Good Deals can be had!
I was saying this back in 2021. This is where it was headed just because population is dropping rapidly. The field I work in, has its finger on the pulse of the population .the birth rate has been going down for the past ten years and the baby boomers have started to die off. This is creating massive drop in population globally. Meanwhile back at the ranch..,. The fake narrative of housing shortage was driving massive construction projects. Even though we could see housing was being hoarded by institutional investors and amateur investors. I said the bottom will fall out and here we are. What a mess
People have to realize that the Housing Values have Not Changed….. The Problem is the Inflation causes our Dollars to be Worth Le$$…. So we must Pay More of our Dollars to Equal what we Would have Paid for the Homes Originally….. The House Price Increased….. Only because Our Dollars are Worth Le$$….
Incoming tide at Sebastian Inlet is absolutely beautiful to swim in. Always cool and aqua blue…Paradise. The heat, hurricanes are a price you pay for cool winters, coral Sunsets, Dolphins and Pelicans. It has made me sad after 35 years how this has happened here with over development. I fear seeing these brand new developments sitting empty in a year or 2 😢 it starting and it’s a very uneasy feeling
We in New England wish we have all of this new build inventory. Housing prices are still going up. Young people want to live here but can not get the housing they need. I have been through all of these down turns. I have always been in the wrong side of them. The only good thing about over paying in FLA is that my kids will have to pay less capital gains tax when am gone.
The thing about non new builds that bothers me is that a lot of the houses are not worth it… Seen a house $58k sold in 2014 now it’s being sold for $300K…. NOTHING HAS BEEN DONE TO MAKE THE VALUE JUMP LIKE THAT. Yea I get it the price is gonna go up regardless but 5x on a sub 1,000 sq Ft home with no renovations done between listings is crazy
“The only ammunition the consumer has left now, is from the labor market. If income growth is compromised here because the labor market is weakening, then we have a serious problem. The debate within the Federal Reserve, is now about that possibility. Inflation, however, remains the predominant concern. After the Federal Reserve’s rate decision, Gold a traditional safe haven in times of inflation, soared immediately after the announcement” Edmund L. Andrews, and Jeremy W. Peters “Markets Soar After Fed Cuts Key Rate by a Half Point” (New York Times), September 18, 2007
Regarding your proposed office, it depends on your objective. Miami/West Palm/Hollywood if you are seeking transactional opportunities. If for other reasons, I would recommend Tampa for general quality of work/life environment & simply because I like you. Would be great to have you and your team around 😊
It is nowhere near a repeat of 2008. Comparing this to 2008 tells me you don’t know much. Inventory is not an overall indicator of the market. Inventory is not what caused the crash in 07/08. Sad thing there is no “crash” coming in the foreseeable future. Palm Beach, Broward and Miami Dade still has a housing shortage…
The problem with these new homes, at least in my area, Palm Beach County, Florida, they are all attached to an HOA! I can buy a new house. I would love a new home. But I absolutely refused to buy a house in a communitywith an HOA! I absolutely 100% refuse. Not even going to consider it. So builders can take their new homes, and those HOA fees, and stick them you know where.
Not to say it won’t get bad for home builders but 2008 was a perfect storm. 100% financing, interest only arms, out of control sub prime products, stated income, no income and no doc loans. Also- will be regional and specific market driven. Majority of current home owners have rates that start with 2 or 3, lots of equity and credit and income profiles much different than 2007 and 2008.
I live one block from the intercoastal. I could ride my bike to the beach in 15 minutes. I get offers to buy my home all the time. I don’t plan on selling ever. But if I did, I would never sell to anybody from New York. Never! I would sell my house to someone from the Midwest for $50,000 less, just because they were not New Yorkers.
Concerning the brutally hot summers in SoFla, AZ or TX, it seems that there are a lot of folks who grew up in the Upper Midwest, and had decided that they had had enough, and so they move to these places, and must figure that since they had gotten so much cold in their earlier days, they can put up with the brutal heat – that, of course, and the fact that there is now AIR-CONDITIONING, so the only heat one needs to experience is walking from indoor into a hot car (for as long as it takes the car’s A/C to get cranking).
WHY PEOPLE KEEP talking bad down to Florida weather. Its a state that has the most immigration and tourist. I lived in California it’s had good weather but it’s super dry, your eyes and skin be dry, when its hot it’s gets really hot too. There’s other states that really hot sticky humid like Texas even new york. Come on now.
I have warned for years that Home prices will crash by 80-95% worse than the previous Depression of the 1929 crash. They will crash that much because of the Global Economic Crash and Jobs will crater disappear and not be able to fund homes or mortgages and the increases in Property taxes and Municipal Insurance rates. ALL PRICES WILL INCREASE FOR HOMEOWNERS but HOME VALUES WILL CRATER>
Miami, Florida, you want to move “here”, really. The house I live in was built on drained swamp land. In 1940 there was nothing but swamp land on my site. By 1960 the land was “filled in”, the canals where dug, and there are artificial lakes where they pulled the sand to fill the swamp. That was 1968, more than fifty years ago. Old housing stock is a problem for much of Miami-Dade County. You add the wet climate half the year and you get housing that looks good, but may not be in all that great of shape. A lot of houses have concrete and rebar foundations, add 50 plus years of rain, and you get Concrete and rust. Also need to factor in the the climate changes that seem to be happening. Sea level rise is going to impact the South Florida Aquifer, main water supply for the county, with salt water intrusion. The higher the sea level the higher you have to keep the fresh water table, the more likely to flood your drained swamp land. There is a reason that they are not building new in Miami-Dade.
50 degree low southern Colorado Rockies 7000 ft no mosquitos or ticks Poison snakes for get about it,thin air ?yes,but I wouldn’t move there,oh and the trout streams,where were we oh yea don’t move here,of course we’re kidding there’s room for 2sheds in Jims backyard,silly typing aside we like your presentations, will you be able to afford insurance after a couple of years? would you develop the office or rent the space? I’m a nosey bot still got to keep up, Peace
And in 2008 there were 4M homes on the market, today there is only a little more than 1M homes on the market with 35M more people in this country. The supply/demand dynamic is completely different today than in 2008… people will lose money shorting this housing market because they are fighting the Fed when they start rate cuts in September.
I agree with the author. That said, it all depends at what price the builder got the homesites for: if they got them cheap enough, the builders will still make a profit. I think we can both agree that the housing prices in SoFla (amongst a few other frothy places like Phoenix) are going to take a big hit, but that doesn’t necessarily mean we get a full recession (OK, there will be an on-going white-collar jobs-recession, but that will not tank the economy, but only frothy housing prices).
There is a big difference between what happened in 2008 and what is happening now. Up until the end of 2007 you could get a mortgage with just one qualifier, you had to have breath in your body. Now you have builders chasing the money and building these homes during the pandemic .. now that the interest on loans is up again you have a stagnant market. I was at 6.4% when I bought my first home and it was a struggle for me then but I pushed through. People are not willing to take on a mortgage at that percent anymore. Buyers have been spoiled with 0% interest loans. Buyers want easy money and builders want all the money.
I don’t know how interest there will be in FL in the near term People moved for the 2017 tax change that may end. People moved for the pandemic situation. The last several years may have pulled a lot of the future migration forward. There’s also the insurance problem, the fraud losses may be reduced but the hurricane risk hasn’t;so premiums may not go down by much or for that long.
An amateur looking a charts and thinking he can predict the future. Charts can go any way they want to. Ask any professional financial trader…ask me. It would be great if history exactly repeats itself, but there are different players working here: blackrock buying homes with money they get at.5%, buying up all the inventory and driving up prices. If they let go of those homes at once, yes, recession. But that’s just one factor. What you don’t see from the charts is all the times inventory went up, and didn’t go down in a recession. The skill you need in order to capitalize on this is not going to come from analyzing charts and concluding that every time inventory spiked we had a recession. That statement is not only factually false, but it shows you don’t know the limitations of charts on past data.
In the northeast, when will the housing prices dip? I’m in one of the hottest housing markets in the country (Portland, Maine – you mentioned it in another article), but I don’t think it’s sustainable given the income levels of most people up here. Would it be wise to wait 5ish years to buy? I’m sitting on a large mound of stocks and cash, but don’t want to squander my money with an upcoming economic downturn
No down turn is coming Jerome Powell is doing his job. Florida and Texas are leading and will stay leading haha They should be their own housing market. What do you think Gen Z demand is going to cause because they have lack luster motivation to buy now and probably will have the same motivation in 3 years.
Drama Drama Drama it is not the same reason as in 2008. A slow down is happening but once interest rates go down things will pick up. This is exactly what the Federal Reserve is trying to do! The market has been overheated for a while. Investors will be taking a hit but they are gambling on the market.
Nothing is crashing soon. You can’t predict anything in a election year. Especially when we have two of the worst rated presidents in history going at it for another term. There is a lack of inventory in most areas. The majority of house owners either purchased when rates were 3% or refinanced. Nobody is going to sell there house lose their rate and buy at the highest price unless you are forced to or have all cash. If rates drop low it will be a frenzy of buyers and sellers. If prices drop 20% it does nothing. The most likely outcome is rates drop to like 5% and more people decide that is good enough and list their house which add more inventory and prices drop 15-20% as more people competing and you have a better housing market. I wouldn’t listen to this doomer/crasher who has been posting the same articles forever about crashes.
Greed seems to be a major contributing factor. Crazy prices! Builders, like car manufacturers, are going to eat this one bad. People may need a home, but are priced out. Correcting the inflated price has to happen before normal sell activity returns. They are sapping up the most of the cash sales, but those will start to wean out.
I went out to Vegas in September of 2008 and there where new house everywhere sitting empty and they were scrambling to finish the developments they’d already started. A couple months later the news reported that the population had dropped by about 10,000 because the guys in residential construction had gone home. I was on the strip and work there went dead in Dec/Jan. They put up the condos at Aria, installed the glass and then walked away. Construction goes first, comes back last.
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Isnt it just this decline is result of high interest rates when people who want to buy look for lower property price as mortgage pffered by bank lowered too? Not sure what % of purchaser on market buy on mortgage but that coupd be reason and that doesnt mean directly crash needs to happen. Rates have gone really high during past 2y and making impact
It’s hard to be bullish on housing a lot of businesses that are closing their doors and some filing for bankruptcy. Wages have stalled and inflation hasn’t really come down. Interest rates are still high. I’m not sure what will be the straw that breaks the camels back but things keep adding up. They say foreclosures are up and credit card deliquesce is up.
All their building are big expensive houses that people can’t afford. Of course they’re just gonna sit there on the market. They get so damn greedy so I don’t feel sorry for them. Let the houses sit there and I hope they lose their shirts on this deal. And the prices are ridiculous no matter what the house is. It’s gonna adjust itself, the market will adjust itself if allowed to. But that means there’s gonna be some pain.
Real estate market crashes are slow motion train wrecks. Stock market crashes can happen in a day or weeks due to the efficiency of the markets. Millions of transactions happen every day. Housing transactions happen at an incredibly slow pace. Price discovery in the housing market takes time to process and analyze.
Well, i think it’s not true. especially if you live in Tampa. There are more new construction sites everywhere and even outside Tampa Bay. Every single developer is building here, and not cheap. So you either doing your articles on a Su day were not workers are on site… or you are in a dead town in Florida.
Climate change and rising sea levels will make properties in low lying areas and coastal areas impossible to insure. Banks will be reluctant to give a mortgage for 15 or 30 years because the property may be under water. Selling properties to average buyers will become impossible in the future as banks and mortgage companies stop making loans for these properties. Coastal areas are a high risk for insurance and extreme weather like hurricanes. People will have to self insure and take the risk of loss. Condo associations are losing their insurance and if they find a new higher cost policy they will be passing on the higher costs to association members. Flooded cars from hurricanes fill the salvage lots. Insurance companies will raise rates and pass on the costs and risks to policy holders next year. Coastal properties will be confined to wealthy individuals that can buy properties with cash and self insure for losses from hurricanes or rising sea levels.
It moves slowly down only when it moved slowly up before. We moved up much faster over the last 3 years than is usual for real estate so i expect this crash to be much faster than usual corrections. Once the recession starts rolling the dominos will come down quickly. What an irony it would be though if you are correct in your prediction that the very trigger for the recession might be the construction industry.
I don’t think it’s going to be that much of a downturn in price because you have a lot of people sitting on the sidelines that the research doesn’t know are sitting on the sidelines because they are waiting for the interest to come down and not looking compared to those actively looking with financing in place. As soon as the interest rates come down then they’ll be in the market and there are tens of thousands of homes built by builders who learned from car dealers not to put all their homes visible in the regular market to keep the prices up. As in we only have these few on the lot or it’s the last one we have. When the financing rates come reasonable down alot of buyers will get off the bleachers which will keep the price up if not go up further then also the builders have learned from car dealers to do private financing to keep the financing perk in house and then charge higher for the house to get that 2.5% loan just like the car industry had learned years ago with builders partnering with banks and there you go. Yes there might be some downturn of buyers from builders not needing workers because they’ve already built alot and those homes are not listed in the MLS and alot of inventory is not being listed the way they used to and are on social media and you don’t need a real estate broker to do a transaction as even I have never used anything but a title company and only used a title company and a lawyer when a regular mortgage actually needed and I’m a Dumas,,or, well so like yeah.