Strip Malls on high-speed roads - STROADS - could offer a solution for architect and urban designer Peter Calthorpe has been promoting an ambitious vision for 'stroads', suggesting not just transforming them into boulevards but replacing the strip malls and parking lots with multi-family residences. Will these locations offer a compromise solution to suburbanite fears that high-density housing will deplete the quality of life/nature of their neighborhoods, while also offering affordable housing options AND finding new use for these vacant spaces? (BLOOMBERG)
UK Central Banker Charles Goodhart thinks a seismic shift is underway in the world economy, one that fiscal stimulus and the post-pandemic recovery will only hasten. A long glut of inexpensive labor that had kept prices and wages down for decades is giving way to an era of worker shortages, and hence higher prices. Massive global income disparities - if sustained - could force labor costs even higher.....and inflation. He predicted that inflation in advanced economies will settle at 3% to 4% around the end of 2022 and remain at that level for decades, compared with about 1.5% in the decade before the pandemic. Good to own real estate, or have a fixed-rate mortgage..... (WSJ)
In December 2021, median home prices in the City of Bellevue, Washington surpassed Manhattan! In January 2022, it surpassed San Francisco! Bellevue now has the 2nd highest median home price, only trailing the South Bay town of Sunnyvale, CA. Steve Curran of COMPASS Bellevue shared these and some other very interesting insights into his city that is about 15 minutes' drive from Seattle. Similar to a degree to Ann Arbor- Detroit, MI, Hamilton - Cincinnati, OH, Dallas, TX to Irving, TX, Franklin- Nashville TN, 'second-tier' cities, considered to be mid-size with less than a million people and while smaller in scale than first-tier cities, these mid-size cities still tend to have a strong job market, top-notch amenities and plenty of cultural opportunities - are rising!
The head of XPO Logistics - a huge trucking entity - said the key to his company solving staffing issues was TRAINING a new generation of drivers. XPO has a driving school to train and educate new drivers after many retired during the COVID pandemic. Aside from a high COVID death rate amongst truck drivers, professional truck drivers have one of the highest rates of injuries and illnesses of all occupations because of the potential for traffic crashes on highways. Truck drivers also have one of the highest rates of fatalities of all occupations. And truck drivers are in even greater demand as growing e-commerce fuels deliveries to our homes.
Home prices are up significantly over the past decade in most parts of the US. But home inflation - which has been around for decades and is often much higher than 'regular' inflation fueled by supply-demand imbalances - makes today's dollars buy less than they did 10 years ago, often LOTS less!
Recently we reported on the spectacular volume of $10 million-plus sales during 2021. Historic! Yes, but...... A home that sells today for $10 million probably cost $7 million or less (sometimes much less) than it did 10 years ago if you assume 4% home inflation.....or what I call LUXEinflation, a different kind of inflation specific to luxury markets which is being fueled by massive wealth growth amongst the wealthy driving a much bigger demand than there is supply.
So this year while we bemoan the lack of inventory, let us also be thankful that (often much) higher prices will offset the lowered transaction volume. Then again, I strongly urge anyone to never ever evaluate a year until December 31st. It's early. If home inflation is 7% this year, a $9.35 million sale today may be a $10 million sale by the end of the year....and a $935k house may rise to over $1 million.....lets re-convene on December 31st!