At the South Carolina Realtors Capitol Conference, I was thrilled to hear a housing market update from my favorite economist, Dr. Joey Von Nesson.
At the South Carolina Realtors Capitol Conference, I was thrilled to hear a housing market update from my favorite economist, Dr. Joey Von Nesson. Dr. Von Nesson is with University of South Carolina’s Darla Moore School of Business and delivered another thorough and easy to understand presentation. Here are a few of my biggest takeaways:
- We still haven’t experienced the most predicted recession in history.
- Our economy, which was overheated by 6 trillion dollars of government stimulus money, is cooling down.
- The stimulus was mostly spent in the goods market, and not the service market.
- We experienced one of the fastest labor market recoveries in history.
- Jobs are a very good indicator of the housing market. If people are working, they can afford a mortgage. If they are not working, they cannot qualify to buy a house.
- Much of the housing market impacts from higher interest rates is behind us. The housing market gets hit the fastest and the hardest when interest rates rise.
- We still have lower levels of inventory which was created by more than a decade of under-building. I find it hard to believe in Horry County (where there's new construction everywhere) but nationally, building did not match population increases. This helps explain why people are moving here. We’re building houses.
- The Fed is walking a tightrope to bring inflation down to 2% without a recession. So far, they’ve managed a soft landing.
- COVID supply chain disruptions reduced globalization. Decreased globalization increases prices because there are fewer suppliers competing.
- Conflicts in Europe and the Middle East are creating uncertainty in global markets leading to increased prices of energy.
- Inflation seems to be stalled out between 3-4%. If it continues to be “sticky”, the Federal Reserve could raise rates but hopefully, they will leave rates where they are and possibly increase them slightly.
- The job market took a huge hit during COVID because Baby Boomers postponed retirement when their 401k's took a huge hit during the Great Recession. So more people kept working after they were eligible for retirement. Then COVID hit and not only did those people retire, but a huge portion of Boomers retired early. The market will continue to recover from this labor force exodus for years.
I always appreciate Dr. Joey’s insights! If you have any questions about any of the information above and want to know how it applies to your situation, please don’t hesitate to contact me. I’m here to help!
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