I’ve got a few things on my mind today. Some light stuff and some deep stuff. Let’s talk about lumber, food in listings, that leaning building in San Francisco, bias in valuations, and a slowing vibe in the housing market.
Skim topics or digest slowly.
5 THINGS ON MY MIND
1) Lumber is lower (sort of):
The good news is the price of lumber as a commodity is coming down. The bad news is that doesn’t necessarily mean savings are being felt by the consumer immediately. For instance, here’s a snapshot of the price of a 2×4 at my local Lowe’s yesterday. In short, the local price here is still at an all-time high despite lumber overall dropping about 45% lately. If you didn’t know, a 2×4 was under $3 just over a year ago.
2) Real estate listings mentioning food:
How often is food mentioned in real estate listings? These are words associated with food and retail in the public description of home sales and listings in the Sacramento region so far in 2021. These words were chosen at random and they’re honestly pretty rare, but I’m still tickled (and hungry).
3) That one leaning building in San Francisco:
We’ve all been glued to news about the heartbreaking tragedy unfolding in Florida right now with the condo building collapse. Not to bring up real estate, but this is going to spur on many conversations about structural integrity, the role of HOAs, and liability. Speaking of structural issues, here is a visual of sales in Millennium Tower in San Francisco, which has been documented as a building experiencing tilting and sinking. By the way, residents were informed in 2016 that the building had issues. Can you see the difference of that news?
4) Conversation about bias:
Last week I was on Agent Kee’s podcast along with Dr. Jesus Hernandez. We talked about lots of stuff, but at the 55-minute mark we had a ten-minute discussion about valuations and racial bias. I find it’s not easy to talk about this today, but this is what should be happening. Ultimately as an appraiser I am doing lots of listening and self-reflection. I’m also clear we need to be careful about quickly saying it’s racism every time an appraisal comes in lower than expected. This conversation is only the tip of the iceberg, but I’m hopeful we can have more discussions like this. Please note I won’t approve any toxic comments because that’s not the culture of this blog.
5) Steroids & slowing (two realities of today):
The market is moving about as fast as it ever has, so it feels like it’s on steroids, but we’re also seeing what looks like seasoning slowing. For those interested I’ll be talking on Thursday at the Yolo Association of Realtors about this dynamic (I think you have to be a member).
FEWER MULTIPLE OFFERS:
Having fewer multiple offers is a symptom of slowing. Even though we’re basically seeing some of the highest levels of multiple offers ever, the numbers have been slightly lower for two months in a row. So clearly competition has begun to pull back slightly (which is what we’d expect to see at this time of year).
INSANE PRICE GROWTH:
With that said, prices are still rising. It really isn’t a slow market, but we are noting some slowing (two different things).
Anyway, that’s what’s on my mind today.
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Questions: What topic stands out to you most above? What’s on your mind these days? I’d love to hear your take.
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