Property Market a Mess, Shelter in Place Say Experts
Posted on 06/09/2023
The U.S. Federal Reserve frequently comments on “shelter inflation.” Shelter inflation has increased about 8% year over year from 2022. Patrick Harker, CEO of the Federal Reserve Bank of Philadelphia commented: “There is already evidence that the most expensive metro areas are not achieving their full economic potential because millions of would-be participants simply can’t afford to live there.” Harker is hoping zoning laws will allow population density to increase.
It is a less than ideal time to buy in the personal home market. Even with falling prices, as interest rates have risen, the houses are actually more expensive than they were at the pandemic peak. Moody’s says houses in England will fall by 10%. In the U.S., the highest flyer in the technology-enhanced property market, Zillow, just dropped out of the Fortune 500. Fortune calls the U.S. housing market “broken.” However, some properties are still having bidding wars.
Redfin commented on the unusual times: “New listings of homes for sale fell 25% from a year earlier during the four weeks ending June 4 to their lowest level of any early June on record. The continued lack of new listings has pushed the total number of homes on the market down 5% year over year to its lowest level on record for early June.”
Those who have homes are stuck in them due to the low rates they enjoy. It is also a challenging time to move from renter to owner despite the fact that over 5% of homes listed have had their asking price lowered.
Keywords: Federal Reserve System.
