This Housing Market’s Something You’re Never Gonna Forget

Joseph Hargett

3 years ago

Housing Market Prices Meme

You Ain’t Seen Nothin’ Yet

G-g-g-great Ones, you just ain’t seen nothing yet.

Is … is that a good or bad thing?

Ummm. Depends whom you ask? (Typical.)

Remember earlier this week when we talked about how hard it is to get analysts on the same page these days? Back when we were watching Hyzon (Nasdaq: HYZN) both miss and beat earnings expectations because no one can get their $#!% together?

Yeah … now imagine what the ever-crowing crowd of analysts is predicting for the ballooning housing market.

Oh no…

Oh yes! Between homebuilders’ supply chain holdups, Wall Street buying up Main Street, spiking mortgage rates, people getting priced out of buying … like, everything … no one can escape the housing market inquisition, even on a bright and cheery Sunday morning.

And much like the blind men’s description of the elephant, each analyst offers up a different piece of the housing market puzzle.

As you’ll remember from last Monday’s deep dive into the housing market clime, National Association of Realtors Chief Economist Lawrence Yun — phew, what an introduction — predicted “the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”

Houses with still-higher prices because of looming supply costs? Oh boy, I can’t wait…

So, that’s one analyst’s take for the pile. Then you have analysts like Ian Shepherdson, chief economist for Pantheon Macroeconomics, who predicts “a substantial downshift in activity, which will trigger a steep decline in the rate of increase of home prices, starting perhaps as soon as the spring.”

Well, Shepherdson, spring has sprung.

We’re already seeing home sales plunge as mortgage rates rise and houses remain expensive as ever. And with homebuilders expecting higher costs to eat into their margins and sales … how steep is this “steep decline” you’re expecting in home prices?

And then you have Zillow (Nasdaq: Z).

Zillow over here expects home prices to only accelerate faster, with the wildest price swings still ahead of us.

So, Zillow … is that why you sold out of your house flipping division? Because you’d make too much money? Really?

I’m still not convinced that anyone’s actually, you know … going to buy those uber-expensive homes. And where does that leave you, Great Ones?

Confused. Very confused.

Don’t be — you ain’t seen nothin’ yet!

The housing market has yet to reach its reckoning point, but the cracks are beginning to show. Well … they’ve been “beginning to show” for over a year now, if you’ve kept up with your Great Stuff.

One analyst I don’t disagree with? Julian Kettle at Wood Mackenzie, who we shouted out as 2021’s Quote of the Year:

Prices had gone too far, too fast. The fundamentals don’t actually justify the price we had seen.

Same as it ever was, Great Ones. When it comes to the housing market, we’re still stuck in the revolving door of investors’ emotional cycles. And prices going “too far, too fast” might turn out to be the Quote of the Year for 2022 too.

Whoa, so many twos, dude.

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