Home Prices in Denton County Hit New Records in May | Commercial column

“Given the fundamentals in place that should support housing demand, we believe the effect of the subprime industry turmoil on the broader housing market is likely to be limited, and we do not expect any significant market fallout. subprime loans on the rest. economy or financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past increases in house prices have left most homeowners with significant amounts of home equity, and job and income growth should help keep most household financial obligations manageable. “

– Ben Bernanke, then chairman of the Federal Reserve, May 2007

The government’s official reading on inflation, the CPI came warmer than expected for April. The consumer price index climbed 0.8% for the month. The inflation rate for the past year has increased by 4.2%. This was the highest level of inflation in the past 13 years, according to the official government measure known to seriously underestimate real inflation in the economy. Any fool knows that the CPI is a carefully crafted work of fiction that the government uses to justify various policies.

Home prices in the town of Denton are like tulip madness. The median price of a home in Denton increased 18.3% from a year ago to a record high of $ 320,000. The average home price in Denton rose 22.7% to a record high $ 346,954. Hedonic quality adjustments actually make it worse in this case, because it does. Based on price per square foot, median and average home prices in Denton rose 23.7% and 27.3% respectively in April.






Aaron Layman


The supply of available housing in Denton is still at record levels, just over two weeks of inventory. FOMO (fear of missing out) is the only way to describe the current behavior of buyers in the local market, as buyers, investors and speculators help create a food frenzy for homes. Denton’s latest closing data shows a number of transactions in which buyers paid 15-20% of the actual list price. The average listing percentage for April was 102.4%. This reflects an out of control market, but the first week of closings in May is even crazier, with 106.3% of the list.

It’s certainly not rational for someone to pay $ 60,000 more than the asking price for a $ 300,000 house in Denton, Texas, but it has happened. It’s a dumb game that only the rich can afford to play, throwing money away like there is nothing wrong with the world.

Home prices in Denton County continue to challenge the Fed’s transitional narrative. As Jerome Powell and various Federal Open Market Committee officials grind to the continued stimulus, homes in North Texas are becoming increasingly unaffordable. When you receive your new assessment from the Denton Central Assessment District, don’t forget to thank Uncle Powell.

Denton County has about three weeks of housing. This has helped push home prices in the region to another all time high. The median price of a home in Denton County climbed 26% to $ 395,000, while the average price of a home in Denton County climbed 28% to $ 464,020. Looking at the price per square foot, things were just as crazy. Median and average prices increased by 20% and 21% respectively. Denton County homebuyers are always throwing up deals for homes like Halloween candy.

All of this manic activity begs the question of whether there will be goblins visiting the local housing market once the Federal Reserve curbs $ 120 billion a month in asset purchases. Mortgage interest rates have recently cooled after rising sharply in the first quarter of the year. Signs of inflationary pressure in the economy continue to build as the Fed hesitates to remove unprecedented stimulus measures to support markets. Meanwhile, the price of lumber climbed 377% in a single year to a record high of $ 1,635 per 1,000 board feet. Manheim’s used vehicle value index is up 54% compared to April last year.

Business owners continue to worry about these inflationary pressures as they complain about a shortage of skilled labor. Other experts say government unemployment support is preventing low-wage workers from returning to their dead-end service jobs. Heaven forbids peasants to last $ 15 an hour while Mr. Bezos builds a $ 500 million yacht. In truth, there is no shortage of manpower. If you pay people a living wage (something above basic unemployment assistance), people will come forward to work.

I have seen a number of professional economists and housing industry representatives play the “resilience” of the housing market during the COVID pandemic. Call it economic quackery if you will. The truth is, no one can accurately assess the health of the housing market until Powell and the company stop supporting it. The Fed refuses to let the markets, especially the housing market and the stock markets, run because they understand what a glorious mess they’ve made.

The latest official inflation readings are seriously complicating things for the Fed, as real data shows the Fed is behind the curve again. Powell and his company have spent billions of dollars on stimulus stimulus to bail out Wall Street and existing asset holders. Now workers are clamoring for a larger share of GDP growth in the form of higher wages, a perfectly reasonable demand given that the Fed is eroding the dollar’s purchasing power by pushing inflation up.

As the summer selling season approaches, buyers are turning to one of the most difficult housing markets in history. Housing supply has never been lower and prices have never been higher. Simply put, there are no good choices.

Buying a home in today’s market is difficult because the Federal Reserve has destroyed the normal price mechanisms. There may still be some upside if the Fed continues to pump quantitative easing, but the downside risk is greater. The Fed has pulled back into a corner. Powell and his FOMC counterparts must find a way to wean the markets off the heroin they’ve injected without watching the whole house of cards implode. April CPI numbers suggest there is no time like the present.

The Fed has a monumental problem in its hands. But before you soften up and cry a tear for Jerome, just remember that every Fed governor is a multimillionaire. There are over 1,700 “other agents” in the Fed’s inflated system, lowering average salaries by more than $ 200,000 per year. The privileged class inhabiting the Marriner Eccles building and the Fed system will be largely immune to the fallout from their latest policy mistakes until the American people and Congress decide to hold them accountable.

Welcome to your warped, overturned and inflated US real estate market sponsored by the Federal Reserve Bank of the United States.


Source link

About Teresa G. Wilson

Check Also

Residents of this state cannot pay their energy bills – 24/7 Wall St.

Special report November 26, 2021 1:00 p.m. At least two things have happened to affect …

Leave a Reply

Your email address will not be published. Required fields are marked *