The world lost a force of nature in the passing of Bill Williams last week. Bill co-founded CWS in 1969 with Jim Clayton after the two of them met at an Indian Guides outing, and both came to learn that they had read the same book about how to create wealth in real estate.
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For, you see, so many out-of-the-way things had happened lately that Alice had begun to think that very few things indeed were really impossible.
—Chapter 1, Down the Rabbit Hole
The impact of higher mortgage rates has definitely thrown a wrench into the typical cause-and-effect relationship between rates and home prices.
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I’ve been wrestling with the theory that we have had a regime change from the credit dislocation cycles that have led to emergency-type measures from the Fed via balance sheet expansion and near 0% interest rates to one that has inflation as much more of a central concern due to powerful fiscal expansionary tendencies and other factors such as onshoring of manufacturing,
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Just when the market prices in four cuts for 2024, either the Fed comes out to talk the market down or data is released to suggest investors are being too aggressive in pricing in the number of Fed cuts.
We are now back to the point where the market and Fed are once again aligned on the number of cuts in 2024.
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Last week the CPI report was released. One can see that shelter is now by far the biggest component of inflation. Non-Housing Services are growing at a moderate rate while Core Goods prices are declining.
This chart shows how CPI excluding shelter has been moderating quite significantly,
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Last week we had our annual investor meeting. It was the first time we met in person since 2019. It was so nice to be together again. Despite not communicating the rosiest of messages, it was an evening that had great positive energy.
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With the renewed runup in interest rates, I thought it would be appropriate to revisit the homeownership market via a frenzy of charts. Of course, all real estate is local, but these overall trends are pretty powerful, so it would be unusual for most markets to be immune to them.
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Gary Carmell
Posted in Apartments, COVID 19, Economy, Housing, Market Bubbles, News, Real Estate
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Give me a word
Give me a sign
Show me where to look
Tell me, what will I find?
What will I find?
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Gary Carmell
Posted in COVID 19, Economy, Housing, Interest Rates, Investing, Trends, Wealth
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Last week was pretty important in confirming the trend change in interest rates and solidifying a slowdown in economic activity. Evidence of the economy slowing is reflected in more U.S. firms cutting their earnings guidance versus raising them.
As the above chart shows,
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Starting in 2012, my late wife and I began to invest in residential real estate beyond our primary residence and CWS investments. In 2013 Roneet decided that she wanted to have a small weekend place in Laguna Beach. I thought it was an idea definitely worth exploring,
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