I’m in no way saying this is representative of the nation as a whole, just reporting what I’ve seen lately.
One of the places I own rental housing in is Cobb County, GA - I’m rather new to that area as an investor but it fits my criteria: Metro Area, mix of Club Chipotle, replete with student loans, puppies and Pelotons, + budding immigrant community, many times - to fill the service sectors demanded by the the more mature professionals. I like the lower price stuff, within a decent area. For instance - the units I have in Northern Virginia are around $320k - - but just half mile up the street in Millennial Mayberry, the same square footage - albeit with more granite and stainless steel and status-symbol cars in the parking lot are seeing for 450-500k. I can only speak to my lowly price point though.
Anyhow back to Cobb Georgia - this time, Acworth.
Townhomes that were selling for $250k 1 year ago, are easily selling for $290k today.
There’s a few more units for sale than before - - but basically instead of selling in 3 days, they seem to be selling in 9-10 days. Certainly - could these be mortgages that were approved before rates went up but I can’t of course know that - but if an offer was put in last week, and the people were approved a month ago that means the rates were indeed ticking up.
Another anecdote, It’s no secret, but I can say with 100% certainty that the backorder of cars is on. Not just at highland brands - but bread-and butter brands too. It’s not uncommon for an auto dealer to have 6 months worth of pre-sold orders on units ranging from $30k- $90k - I’ve seen the books - and my God it’s a license to print money.
Observation? I continue to believe that yeah, people will be miffed with rates. BUT - if mortgage and auto rates merely go back to pre-pandemic…I’d say home and auto sales were darn robust in those years. If SAAR for auto sales gets to 16 million a year once production ramps - heck there were years the industry would’ve smooched someone’s back-of-their-front for those numbers.
Back to homes: It certainly can change soon - but today - for the lower priced homes - there’s NO letting up that I can see. Metro Atlanta is a hot market - but NOT hot as Boise or Austin has been. People are still signing up. Heck there was a fixer upper in the ugly part of town for $250k. I figured I’ll wait a weekend, and hit them at 240K. It’s already under contract.
I’m not learn-ed (hyphens are fun) to know how soft landings and recessions will come about. But… with autos pre-sold. With homes selling. With a labor shortage…I’d be mighty impressed to see 2 quarters of economic shrinkage, but I guess stranger things can happen.
Methinks it would take yet another decent sized global systemic hit for things to get that bad.