Your Survival Guy and Gal celebrated our 27th wedding anniversary earlier this month, where it all started: Key West, FL. It feels like yesterday when a nervous Survival Guy stood in front of our guests, beginning my toast with: “So far, so good.”
And it has been.
Which brings me to this month’s RAGE Gauge, and a trip down memory lane when we first began spending time in Key West, Florida. I remember Dick and Debbie buying the home they live in now, selling their first one on Catherine Street.
When they were living on Catherine Street, they could put a pot of water on the stove, walk to Louie’s Backyard for a beer, and by the time they got back, it would be boiling. The new home was a renovation/new build project, and being in the middle of one myself, that’s never cheap, no matter when you do it. But I can tell you from my experience, real estate has never been cheap.
When Your Survival Guy bought a three-family in Marlborough, MA, I was working at Fidelity Investments across Route 495, about ten minutes away. I had tenants on the third and second floors and roommates in two of the three bedrooms on mine. That gave me enough to eventually put a down payment on our first home in Newport, and enough cash to buy a six-pack of beer and a pizza to have on the front steps with a future Survival Gal.
Earlier this month, walking the streets in Old Town Key West to grab a con leche, it was noticeably quieter than in years past. Let’s not confuse this observation with lower prices because they’re still sky high. And that will always be the case in the most desirable places, such as in the 16th and 8th in Paris, downtown Newport, Old Town Key West, and over the bridge in Palm Beach, to name a few.
But for those living on the edge, who own too much property and carry too much debt, it’s not about location, location, location; it’s about holding on for dear life.
For my younger readers, talk with your parents and grandparents and ask them what they paid for their first home and how they made it work. Figure out a way to get in the game. But do it in a way where you can live comfortably even if prices don’t save the day.
Here’s the lay of the land:
When it comes to real estate and the housing market in the United States today, it’s a mixed picture with some indications of strength, some weaknesses, and regional disparities. Take a look at my charts below.
The number of permits for new privately owned residential homes is declining quickly and has dropped below its historical mean value to 1.33 million last month.
Existing home sales have been pretty flat since 2023, but the number of active listings has climbed from around 600,000 at that time to around 1.1 million today.
The S&P/Case-Shiller 20-City Composite Home Price Index shows that prices for houses have been declining since peaking in February.
The sales price of condos is falling in the South and West regions of the country, indicating that some of the real estate problems are regional, at least for the moment. Condo price growth is still positive in the Midwest and Northeast, but the rates of price growth have fallen in those regions as well.
Another indicator that the troubles in real estate could be regional is that the median number of months a home sits on the market is 2.7, which is still historically very low. So there is still appetite, at least in some markets, for homes that go up for sale.
Housing starts have been declining since a recent peak in April of 2022. That doesn’t suggest that homebuilders find the current market inspiring.
You can reach me here: ejsmith@yoursurvivalguy.com
Originally posted on Your Survival Guy.
