Rick Palacios Jr. Profile picture
Director of Research | John Burns Real Estate Consulting @JBREC | Previously @MorganStanley & @MilkenInstitute | All things housing, economics and finance.
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Aug 2 8 tweets 2 min read
Apartment transaction market appears to be in price discovery phase. Bid/ask wider as highly leveraged buyers take a breather. Asset values down ~5% to 15% and cap rates up ~50 to 100 basis points based on earnings commentary last week... Mid-America: “~40 bps change in cap rates last 2 to 3 months. Majority of fallout related to higher levered buyers pulling back & buyers with shorter-term time horizons pulling out of market. Assets not well located or inherent issue could see [cap rates off 75 to 100 bps].”
Jul 18 4 tweets 2 min read
Home builder market share dynamics are worth paying attention to as housing demand softens. Couple builders known for resetting the market on price are now lion’s share in many geographies, not just Tampa (shown below). National home builder market share concentration at the top has grown quite a bit in recent years.
Jul 11 22 tweets 7 min read
June home builder sentiment and survey results are in. Top themes: 1) A lot more new home buyers cancelling. 2) Price cuts becoming fairly common. 3) Drop in demand finally cooling construction cost pressures (builder layoffs also happening). Market commentary to follow… #Atlanta builder: “Someone turned out the lights on our sales in June!”
Jun 8 23 tweets 7 min read
May homebuilder survey results published last week. Top themes: 1) Builder metrics quickly deteriorating across the board. 2) Price cuts on standing ‘speculative’ inventory accelerating. 3) Buyer incentives are back. Market commentary to follow… #Austin builder: “Some parts of town where finished homes are now taking a month to sell versus hours. Market is definitely correcting. Incentives are back and seeing some builders cutting prices on inventory.”
May 20 4 tweets 2 min read
Seeing ripple effects of rising rates reverberate across housing market. Starts with entry-level buyers (already slowing). Move-up buyer also showing signs of slowing. Home equity rich helps offset 5%+ mortgage rate shock, but need a buyer to sell/move-up in market (often an entry-level buyer), that's now pulling back.
May 9 29 tweets 8 min read
April homebuilder survey results are here. Top themes: 1) Demand is slowing, namely entry-level due to payment shock. 2) Investors are pulling back. 3) Ripple effect of rising rates starting to hit move-up market. Market commentary to follow… #Dallas builder: “Interest lists are shrinking or buyers are truly pausing.”
Mar 7 21 tweets 7 min read
Homebuilder survey results are in for February. Top themes: 1) Record high new home price increases at +20% YOY nationally. 2) Record low builder finished inventory. 3) Demand still off the charts & quality of home buyer prospect lists still solid. Market commentary to follow… #Charlotte builder: “Restricting sales in all communities. Several communities with VIP lists over 1,000 and one of those communities only has 51 homes. Increasing mortgage rates haven’t slowed buyers down at all.”
Jan 12 4 tweets 1 min read
A few gems from today's Fed Beige Book on crazy tight job market. Employers pulling out all the stops, even "no-meeting Wednesdays" to attract people. "Extreme new-worker turnover"
Jan 11 27 tweets 8 min read
Home builder survey results are in for full month of December. Top themes: 1) Still a ton of demand for new homes. 2) Rampant construction material & labor shortages. 3) Bit of chatter on possible margin compression several quarters ahead. Market commentary to follow… #Atlanta builder: “Have virtually no available inventory & huge backlog of 1,000+ units going in to 2022. Still metering sales in most communities, where the demand of waiting buyers still outnumbers our supply.”
Dec 13, 2021 12 tweets 1 min read
We’ve been asking building product dealers about supply bottlenecks for several months. Seems like status quo holding for now (not getting better, but also not getting worse). Labor & logistics remain the biggest concerns, see survey commentary to follow… “All beam products, glass faced gypsum products, windows, & interior trim products continue to tighten.”
Dec 2, 2021 14 tweets 6 min read
Some interesting comments from today's Fed Beige Book on both housing (investors, lot shortages, market normalizing) & labor market tightness (namely continued wage spike). #Atlanta Fed housing commentary on investors
Nov 29, 2021 25 tweets 8 min read
Monthly pulse of resale housing market still rapid according to 4,500 agents we just surveyed. Top 3 themes: 1) Bit of market normalizing. 2) Skittish sellers fearing nowhere to move. 3) End of travel ban boosting international buyers. Commentary across the country to follow… #Houston resale agent: “A lot of people are not listing because they don't know where they are going next. Seems that many people listed too high even for a sellers' market, so I am seeing more price reductions now than earlier in the year.”
Nov 16, 2021 12 tweets 3 min read
Over the last few months I’ve spoken with dozens of real estate & mortgage industry executives, trying to gauge what impact (if any) #crypto is having on the #housing market. Here’s what I’ve concluded. (1/) realestateconsulting.com/bubblicious-cr… The number of home buyers w/documented crypto accounts has risen from ~0% one year ago to between 5% & 10% today. Platforms such as @coinbase $COIN were noted most often in my conversations, with $BTC & $ETH common plays. (2/)
Nov 10, 2021 5 tweets 4 min read
Home prices still accelerating through October in majority of housing markets we track. Handful below finally moderating (#Austin, #Boise, #Phoenix, #Seattle, & #DC). Here's #Austin. #Boise home prices
Nov 8, 2021 25 tweets 8 min read
Fresh October home builder survey results. Top themes: 1) Builders are finally lifting sales caps (though not all). 2) Lack of lots & land development delays will hold back growth in 2022. 3) Most builders expect prices to keep rising. Market commentary to follow… #ColoradoSprings builder: “One cautious trend to watch is single-family rental businesses paying more for land than builders. This will suck up trade capacity & supply at a time we can't afford it.”
Oct 23, 2021 12 tweets 4 min read
Some new data & market commentary on who's buying land from our 3Q-2021 land broker survey. Build-for-rent operators snapping up 15% of raw land in #Florida & outbidding home builders on deals across many markets. Couple charts & market commentary to follow... Here's the chart where we asked land brokers if they've observed build-for-rent operators outbidding home builders on land deals in their market. 46% said 'yes' when we rolled it up nationally, and as high as 77% in the Southeast.
Oct 21, 2021 7 tweets 3 min read
Yesterday's Fed Beige Book commentary on #wages was pretty eye-opening. I'm hearing this daily across housing sector, but definitely spiking across the board. #Dallas Fed wage commentary
Oct 7, 2021 36 tweets 11 min read
Just published September home builder survey results (sales, prices, costs, communities, etc.). Big themes: 1) Supply chain, supply chain, supply chain. 2) Monthly price hikes no longer the norm. 3) Some of the hottest markets sounding toppy. Market commentary to follow… #Austin builder: “No end in sight for labor & material issues. Told by logistics guy last week that his company believes it will take at least a year to get the supply chain back to working.”
Sep 8, 2021 25 tweets 8 min read
Companies tied to housing revising guidance due to supply chain. Commentary from our builder survey this month indicates things getting worse before they get better. Homes sitting, waiting for materials (dead days). Big delays in windows. Delta outbreaks. In sum, a crapshoot. 🧵 #Nashville builder: “It's a crap shoot. Some municipalities will issue permits in 1 week, & others are 6-9 months behind. Supply chain is a mess. Windows are now 7 months out, cabinets are 6 months out, etc.”
Sep 2, 2021 10 tweets 3 min read
Just surveyed ~400 pro remodelers. Top 4 themes: 1) Big remodels all the rage; 2) Many remodelers are booked until 2022+; 3) Product lead times & labor shortages still bad (see chart); 4) Homeowners fixing & staying put, not selling. Commentary from across country to follow… #Texas remodeler: “I can’t grow with 20 week lead times on basic products. I started asking my suppliers what products are easiest to install. I don’t have enough labor to spend more time installing a touchless faucet than absolutely necessary.”
Aug 20, 2021 24 tweets 7 min read
Just surveyed 6,000+ real estate agents across country. Top themes from our 1st ever RESALE agent survey: 1) Buyer fatigue, w/rumblings of remorse. 2) Bidding wars a bit less bonkers. 3) Cash is King & ton of investors. 4) Inventory gridlock. Commentary across country to follow… #LosAngeles agent: “20-minute allotted home viewing time slots with offers due next day by noon, & buyers are asked to give up every contingency under the sun.”