{"id":9385,"date":"2024-06-11T18:58:11","date_gmt":"2024-06-11T18:58:11","guid":{"rendered":"https:\/\/cobiaholdings.com\/?p=9385"},"modified":"2024-06-11T19:25:54","modified_gmt":"2024-06-11T19:25:54","slug":"whats-happening-in-the-housing-market-2024","status":"publish","type":"post","link":"https:\/\/cobiaholdings.com\/whats-happening-in-the-housing-market-2024\/","title":{"rendered":"What’s Happening in the Housing Market 2024"},"content":{"rendered":"\n
This post was originally written as a conclusion to our other post on the NABOR post<\/a>, but as it grew, we’ve decided to break it out into it’s own post. <\/p>\n\n\n\n To summarize the previous post – basically prices have continually increased, mostly sudden during COVID, and then a slight dip overall – but a continual\/but gradual increase in home values continues – despite the fact that very few people are actually buying homes. The question is … what is really going on and where are things heading? <\/p>\n\n\n\n A Quick Note on the General Economy<\/strong><\/p>\n\n\n\n One of the key indicators that has been used since time immemorial on how well the economy is doing – is overall cost of goods (monitored through the CPI) as well as the affordability of housing. Today (as we’ll explain) housing is outside the per-view of many workers. In Southwest Florida – for example – the average income for the last decade has been approximately $35,000. Conventionally, home ownership (or even rental) was 20-30% of income. At that rate housing would have to be $500\/month. There is literally nothing available (and there hasn’t been anything available for at least the last 2 decades). As we’ll show below a conventional house in the Naples market now costs roughly 20% MORE than that salary – and that’s JUST the mortgage – at today’s rates. So something is clearly broken. Combining this, with the ever rising cost of goods and services, due in part to inflation and you have a recipe for disaster – one that we believe will ultimate mean a couple of things: <\/p>\n\n\n\n Our conclusion on the previous question of how can the market price continue to climb despite record inventories, and very modest unit-sales increases is multi-faceted and it’s unclear where this is going – but as I’ll prove, this area (southwest Florida) is ONLY unique in the severity of the rise (and eventual fall) – the massive and fast price increases were entirely due to fed policies and has nothing to do with the “unique” qualities of the area. This as actually occurred in every market (at least in the U.S. residential housing market). <\/p>\n\n\n\n Take a look at this modified graph I took from the FED’s website on housing prices in Naples\/Marco over the last 25 years<\/a> (modified to show the slope of the rise in prices during the previous housing recession boom and bust): <\/p>\n\n\n\n\n