First and foremost I hope you had a great 4th of July. We hung out on the rooftop of my buddy’s house over downtown Colorado Springs and waited for the Switchbacks fireworks. Meh, Patty Jewett outshined them hands down as did most of 80910, 80911 and 80916. If there is one thing that those zip codes are super good for it’s blowing thousands of dollars on fireworks. I remember last 4th of July right off Bijou and Chelton was like a fog of war, just a cloud of pyrotechnics smoke hanging in the air. Sweet smell of freedom.
But let’s get super serious yea? Real estate, debt markets, macroeconomics, Bud light vs Kid Rock and other hyper relevant topics.
Today we’ve got 1,222 existing single family homes for sale in El Paso County. That number is up about 10% over June and I’m not going to call it a trend yet, but there certainly seems to be a correlation between rates and inventory sitting and piling up.
Our last “peak” in interest rates was late February/early March and we saw inventory pile up briefly. Rates then dropped a bit and we saw a flurry of buyers enter the market as summer arrived. Multiple offers were not uncommon and our median sold price rebounded. It sounds like maybe I’m going to have to use some of this data in court here pretty soon so lets freshen up on this winter vs now.
Right around the mid terms in November rates jumped, then holidays, then we had the bump up in February. February we saw a total of 815 units sold in our MLS for a median sold price of $442,000 and a sold to original list price ratio of 97%. Fast forward to June of this year we saw 1,246 sales for a median sold price of $490,000 and a sold to list price ratio of 100%. We’re going to see what July and August look like as we settle into mortgage rates once again around and above 7%, but the recovery of over 10% in pricing over just 4 months is pretty remarkable. When asked about values of certain properties in January/February I had a much more pessimistic outlook on price because of the existing data. I’m curious to see if this recovery we have is real or more of a dead cat bounce as people gamble on rates dropping anytime now.
Rates dropping anytime now. Doesn’t seem to be a great bet. This week we had some pretty substantial reprices to the upside as the Fed Minutes came out Wednesday showing that the bulk of the goblins are in agreement that more rate hikes are needed. The jobs numbers keep coming out strong, the unemployment rate remains around 3.6% and people somehow keep spending money. Basically there is no data based case for the Fed to lower rates to stimulate the economy as all the data they have shows an economy that’s still running hot, with the inflation rate still not where they want it, and so far with the rate hikes having minimum impact on main street.
Now I’m going to be super frank with you guys here from an industry stand point and from a personal one. From an industry standpoint I have had many, many conversations with really good agents who are struggling. Folks that generally sell 2-4 houses a month and have been making a steady income from real estate sales for years that so far this year maybe sold 1 or 2 houses total. I know for a fact that sales volume year over year is down by over 25% in the month of June while median price year over year is basically flat. I know for a fact that a good number of industry people that have historically crushed it are either leaving the industry or getting side hustles. I know a lot of other agents that work their asses off every single day and will persevere through any market and remain successful just through sheer effort. Hats off to you troopers!
From a personal standpoint. I have a son who is about to be 3 years old. I have a wife that hasn’t really had a chance to spend time with me in almost 4 years. And I’m the kind of guy that feels kicking water uphill is pretty fucking stupid. So while I’ve pretty thoroughly brainwashed myself over the last decade of sales that hard work, determination, hustle and grind are the like the number one priorities to success I’m coming to the conclusion that spending more time with my family is far more rewarding. On top of my personal priorities becoming more important to me than hitting some sales quota there’s also the fact that the industry is saturated with dipshits who are willing to work for bar tabs. While I don’t have the exact number handy we still have over 5,000 people using our local MLS. That basically means that for every listing there are at least 4 agents available. Roughly. And many of these agents, hundreds of them actually, are solid experienced good people. But thousands, literally thousands, are unnecessary dead weight that is here to fuck up a deal or two and then go back to doing whatever is next for them. Competing with these morons on experience is exhausting because I’m not willing to cheat, lie, or work for free. So fuck that.
All of that being aired out now you know why I’ve shifted my focus to more of an oversight role in the brokerage. My goal is to remain available to my friends and past clients and provide you with the level of care you expect from me. But my goal is not to hunt down 50-60 deals a year. I’d like to be there for you, help my agents by helping them generate more business, and myself focus on building my construction business that allows me so much more control over my time. You know the saying time is money? Well to me time is more important, because for sure the amount of it I have is finite, especially with my son. Where as money, well, you see how they print that shit.
In summary I am not super duper optimistic about the real estate market over the course of the next year or three. Over the longer term I think real estate will always be a good investment. I do think we need to see some fall out from all this debt monetization and loose monetary policy. I’ve been saying it for years and I’m still wrong, but I have a feeling that when I’m finally right it’s going to be a lot uglier than it could have been just because we’ve kicked the can down the road for so long. Speaking of cans. Budweiser lost over 20 billion dollars over their fiasco, Kid Rock is still a talentless douche from Detroit, and I hope me being frank with you doesn’t cost me your support or respect.
I’ve got to go bid out two decks real quick and spent the morning trying to unfuck one of the more complicated real estate deals I’ve ever touched. I might do a follow up to this update before August as needed. Thank you guys and I hope you like our new site.