Let’s talk real estate.
I am a magnet for residential real estate questions. Having more or less gotten the 2000s RRE mess right, I get regular questions about real estate investments, pricing, cycles, and values. I don’t always know the answer, but can usually find the person who does.
This current housing market is unusually confusing, for lots of reasons, but let’s reference a few of them.
Start with the undersupply of single-family homes. We discussed this in detail last Summer. The tl:dr is that heading into the pandemic, we had a decade of reduced demand and underbuilding, a huge lag in household formation, building up to lots of pent-up demand.
Add to this mortgage costs were the cheapest in modern times.
Third, the pandemic disrupted the usual chain of sales. Normally, this looks something like this: First-time buyers buy a home from a growing family – one kid,