More Homes, More Problems

September 26, 2023

Housing Market Reacts to Rising Rates with Growing Inventory

Home inventory sees an unusual growth in late September, marking a 1.8% rise from the previous week.
Despite a 9% to 10% drop in new listings from last year, inventory continues to climb.
Buyers are on the fence, anticipating potential mortgage rate decreases; current rates are at a two-decade high.
This year's inventory growth rate surpasses the previous year, contrasting starkly with trends during the pandemic housing boom.
New pending sales have decreased 10% to 15% compared to last year, with impending reports likely to reflect reduced sales.
An increasing 37% of homes on the market have slashed prices, suggesting potential softening in Q4 prices.
The current median sales price hovers around $440,000, barely showing year-over-year growth.
Despite previous discounts, new listing prices suggest potential future price weakness.
Although rising, mortgage rates haven't prompted a significant influx in inventory, maintaining market balance.

China's Property Sector in Long-Term Distress

China's rapid urbanization over the past decade may be reaching its end, impacting the already struggling property market, says Hao Hong, Chief Economist of Grow Investment.
Hong suggests that resolving the property sector's issues might span years or even a decade due to excessive housing development.
Major property companies, Evergrande and Country Garden, face significant debt issues. Evergrande recently postponed a debt restructuring meeting, while Country Garden is close to defaulting.
Two years ago, property sales in China amounted to 18 trillion yuan ($2.46 trillion). Hong believes that achieving 10 trillion yuan in sales this year, or even 5-6 trillion in the future, would be optimistic.
In August, new home prices in China decreased by 0.3% month-on-month, indicating a continuing property market decline.
He Keng, a former deputy head of China's statistics bureau, commented on the excess of real estate, stating that China's population couldn't occupy all the available apartments.
Despite post-Covid economic recovery setbacks, Hong remains hopeful about China's economic future, emphasizing the potential benefits of diversifying growth away from the property sector.

Miami Couple Embrace Tiny Living, Thriving on Airbnb

John and Fin Kernohan shifted from Miami's city life to a simpler existence in a Georgia forest tiny home.
Their 304-square-foot living space, known as the Beloved Cabin, was created from a lofted cabin shell costing $6,500, emphasizing the tiny living ethos of reduced expenses.
In 2015, they relocated the cabin to a 3-acre plot by Lake Oconee, implementing eco-friendly solutions such as solar power, rainwater collection, and HomeBiogas systems.
Their lifestyle drew attention on social media, leading to the establishment of the United Tiny House Association with 183,000 Facebook followers.
Inspired by a family trip to Thailand, the Kernohans expanded their property to 16 acres, creating a unique Airbnb experience with different tiny homes, each designed with distinct international aesthetics.
Their offerings include tiny houses, yurts, domes, a tent, a revamped bus, and the Beloved Cabin, ranging between $99 and $148 per night.
Amid their Airbnb success, they prioritize community, offering additional amenities like hiking, biking, kayaking, and spa treatments.
John highlights the benefit of hosting Airbnb guests on their land, allowing them to maintain a watchful eye, ensuring no disruptive parties occur. Fin cherishes the tranquillity, stating, "You only spend time doing things that you love to do."

Drake's Big Texas Purchase: Not Just a House, But a Ranch

Canadian rapper Drake reveals his recent property acquisition in Houston during his "All A Blur" tour stop.
A video shared by HipHopDX, originally from Drake's Instagram, features the artist touring a vast pasture, confirming he bought not just a home but an entire ranch.
Embracing the country vibe, Drake jovially shares, “Me and my partna’ we done gone country on y'all mane.”
The property boasts 10 horses, with four currently being boarded. Drake mentions the significance of having a "nice place for their horse to stay."
The ranch showcases a fenced corral and is surrounded by tall oak trees, suggesting its location might be in places like Rivercrest, away from urban areas.
Drake's affection for Houston is renowned. With his new part-time residency, fans speculate on his deeper integration into the local culture, possibly participating in RodeoHouston or joining a Black Trail Ride.

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