What I’m Reading
Levelling Off? Active housing inventory for sale is up 29% year over year. However, it has been sitting at this level for three weeks now after soaring earlier in the year. Per Bill McBride: “This might be noise, or it might suggest a slowdown in inventory increases.” Calculated Risk
Bottleneck: The entitlement and construction process for new industrial builds is taking five months longer on average than it did pre-pandemic. The result: a significant backlog of facilities in the construction pipeline. Starts increased by a whopping 64% between 2019 and 2021 to meet a 120% increase in tenant demand—but deliveries ticked up by just 5.7% during that time. Globe Street
Long Slog: Low return-to-office figures persist as the summer wears on, with offices seeing roughly the same level of traffic in July, after workers returned from the Independence Day weekend, as they did in June. At the same time, the US office sector has suffered 7.8M SF of negative absorption nationwide during the second quarter of 2022. Bisnow
Locked Out: The US housing market is entering a ‘deep freeze’ as surging borrowing rates and sky-high home prices hit buyers, sending sale volume substantially lower. Insider
In Balance: The median household income for market-rate apartment renters so far in 2022 soared to an all-time high of $75,000, up 15.4% since 2020. Over the same timeframe, the median monthly rent on a new lease jumped 21.9% to $1,510, nationally. That reversed a pattern of eight straight years of rent-to-income ratios inching downward. The share of income spent on rent ticked up from 21.3% in 2019 to 23.2% in 2022, marking a return to the 2011 norm, and still well below the generally accepted affordability ceiling of 33%. RealPage
Chart of the Day
Household + financial sector debt is 151% of GDP compared to 215% in Q4 2007. We could have a major housing downturn that leads to a recession but it won’t be anything like 2008.
Source: Eric Basmajian
WTF
Gotta Hear Both Sides: Per a recently filed lawsuit, a Taco Bell manager dumped boiling water on a woman and girl who asked for their incorrect order to be remade. NY Post
Thunderdome: A video of a rat attacking a pigeon has gone viral because New York. NY Post
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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