Your March market update on inflation, jobs, real estate, and more.
In today’s housing market update, let’s talk about jobs, inflation, the stock market, and, of course, real estate in general.
First, we need to address The Great Resignation. People everywhere are leaving their jobs. Surprisingly, we added 467,000 jobs in January. The good news is that we’re adding jobs at a steady pace, but the bad news is that the job increase is another reason behind rising interest rates.
We are at the lowest we’ve been for long-term joblessness that we’ve been for a while. In January 2020, that number was at 4 million, but right now, we’re are only at half of that.
Some major interest rate hikes are looming over our economy. Wall Street is predicting seven increases in this year alone. In March, The Federal Reserve will raise rates again, and if the economy doesn’t backslide, they’ll keep increasing. These increases will be about 0.25% each, so if you have a 4% interest rate, lock in these rates now before they climb.
We all thought that inflation would be a hot mess, but it looks like it’s backing off. The numbers aren’t in quite yet, but it is looking good so far. The COVID money is all drying up, so it looks like people are heading back to work and restraining their spending.
However, rents have skyrocketed. The single most expensive thing is the cost of living, and the second is cars. Brand new and used cars are at an all-time high, which is really hurting people’s disposable income.
The stock market has been a wild ride.70% of all stocks traded on the NASDAQ were down 20% or more, while 40% were down 60% or more. Facebook jumped down 24%, while Amazon jumped up 24% on the exact same day. Stocks have been overvalued for a while, so we probably won’t see another 20% growth like we did last year. Just stay steady; don’t worry about the ups and downs.
Let’s move on to real estate. In January 2022, we saw the lowest inventory levels in history, so why is that? Simply, fewer sellers are going on the market. Because of this, homes have gone up 16% to 18%, and we’ve seen a big push of buyers trying to get a new home before interest rates rise again. Rents have also gone up, and people want to put their money into their own property instead of paying those high rents.
In Portland, we saw a mass migration of people moving out. People want a lower cost of living. With higher prices and sales taxes, it’s harder for people to size down here, so they’re moving to more affordable states. Sellers also have a lot of equity, so they are pushing prices up when they go to buy a new home.
My prediction is that we will continue to see multiple offers heading into spring, but we will see a slowdown as we make our way through the year. The interest rate hikes will affect buyers’ purchasing power, and they’ll get fatigued over time. If you own a home, you may want to sell sooner rather than later.
If you have any questions about this market update or real estate in general, feel free to call or email me. I would love to hear from you.