A weekend topic starting with Fox. “Since mortgage rates will continue to rise but are not expected to increase considerably, experts suggest it may be worth it to wait until there is more supply or choices available later in the year or next. Yet, be aware, waiting longer also equates to higher prices as home values continue to increase. ‘Do everything you can to put yourself in the position to make the strongest offer now. You might not be able to afford the same area by the end of the year,’ added Eric Jurmo, a Detroit agent.”
“One thing is certain: homebuyer fatigue is settling in. Ron Melendez, a senior agent in Los Angeles with Compass added: ‘This market requires the right mindset and trust that what feels like an exorbitant price now will look like a bargain in a month. It is starting to feel like buyers are tapping out, unwilling to play the game anymore.’”
From Go Banking Rates. “If you’re a homeowner who was flirting with selling anyway, you might feel like you’re living inside of a giant lottery ticket — and who could blame you? ‘Selling a house is both a personal and financial decision,’ said Eric Hegwer, a realtor in Austin. ‘Before you list to sell, ask what your motivation is.’ He poses the following three questions to all prospective sellers: Do you need more or less space? Has your job changed and you need to be closer? Do you have a lot of equity and want to get some for a different purchase or investment?”
“If you don’t answer yes to any of those questions and selling is a choice instead of necessity, then Hegwer said, ‘I wouldn’t sell because I believe the market is still going up, at least for the next two years.’”
From Newshub New Zealand. “With growth in the housing market slowing and asking prices plummeting in some areas a property expert believes now might be the right time for people to start searching for their first home. CoreLogic chief property economist Kelvin Davidson told AM on Monday the housing market is a little bit ‘sluggish.’ ‘The key thing we’ve seen turn around is listings, there is still a reasonable flow of listings coming onto the market but what’s happened is sales at the other end of the pipeline have tailed off as credit has tightened up,’ he said.”
“‘I have seen some stats from around Auckland that some auction clearance rates have been really poor so the mood has changed,’ Davidson told AM. ‘That is the other thing here, it’s not just interest rates or credit availability or listings, there is also the mood in the housing market that matters a lot and expectations matter a lot. If a buyer puts in a sneaky offer, maybe the vendor thinks ‘is that the best offer I’m going to get? Not sure I’ll get a second offer so I’ll take it.’ So once that mindset changes, it can change really quickly and it means a lot. It is hard to quantify but that could be going on too.’”
The Calgary Herald. “The roof is unlikely to collapse on the housing market now that the Bank of Canada has began hiking interest rates. ‘There is still tremendous buying power,’ says Chris Alexander, president of Re/Max Canada, noting the prime lending rate, affected by the increase, is 2.45 per cent. ‘The interesting thing is there are already signs of more inventory coming onto the market,’ he says, pointing to February data from across the country showing new listing increases. ‘That’s a positive sign because prospective buyers are getting a little tired with the currently tight market conditions.’”
From Better Dwelling. “A Canadian Big Six bank took on a key narrative from the central bank in a research note to clients this weekend. BMO Capital Market’s Rates and Macro Strategist Benjamin Reitzes addressed remarks from the Bank of Canada (BoC) Governor Tiff Macklem. Last week the Governor said high inflation was a supply issue, and low rates did not raise demand. Reizes found this particularly odd, especially when it comes to real estate sales (and prices). BMO not only disagreed with the BoC, but flat out said the central bank’s low rate policy drove real estate towards a bubble.”
“The recent challenge of the BoC’s statements is just the latest episode of, ‘What The Hell Are You Talking About, Macklem?’ Almost a year ago, statements from the central bank stopped making sense when contrasted with data. More recently, Canada’s largest bank made the highly unusual move of the CEO advocating for an interest rate hike. Let this sink in for a moment. How odd does the BoC have to act for banks to basically say the central bank is creating excess business for them? One would have to guess it’s getting close to reckless.”
From Bloomberg. “Ominous signs are piling up that more turmoil is still coming, as key indicators point toward a potential recession. ‘Over time, the three biggest factors that tend to drive the U.S. economy into a recession are an inverted yield curve, some kind of commodity price shock or Fed tightening,’ said Ed Clissold, chief U.S. strategist at Ned Davis Research. ‘Right now, there appears to be potential for all three to happen at the same time.’”
“Meanwhile, the Fed is unlikely to intervene to prevent sell-offs, according to George Saravelos, Deutsche Bank’s global head of currency research. That’s because the root cause of the current spike in inflation is a supply shock, rendering the playbook used to fight downturns for the past 30 years all but useless.”
From The National. “Human beings have always been prone to fads, fashions and manias — and investors are arguably the worst of the lot. History is full of examples of crazy investment manias, from railways to canals to South Sea stocks and Dutch tulip bulbs, and the irrationality continues to this day. We seem more prone to investment frenzies than ever.”
“Fads are dangerous things unless you are ahead of the trend, Chris Beauchamp, chief market analyst at online trading platform IG, says. ‘Too often, most investors only really hear about them when the big initial moves have already happened, as with ARK Innovation,’ he says. The herd piles in at the point of peak excitement and overpays horribly. ‘Afterwards they stick around, hoping that stellar performance will return. Sometimes it does, but frequently it doesn’t, and these investors end up holding the bag while the market moves on to the next big thing,’ Mr Beauchamp says.”