What I’m Reading
Shedding SZN: The popular narrative in the warehouse space is that Amazon has a glut of warehouse space and is looking to dump it via sublease. A closer look at Amazon’s plans to sublet warehouse space show that it is largely looking to shed traditional, mid-market warehouses that aren’t ideal for first-mile or last-mile use in markets where it now has new, state of the art space. Wealthmanagement.com
Coming in Hot: The CPI report surprised to the upside once again on Friday, soaring to 8.6%, the highest level since 1981. As a result, yields soared and stocks crashed.
Chopped: Lumber prices are off by more than half since March as the soaring cost of home ownership foreshadows a substantial slowdown in homebuilding. Bloomberg
Closing Door: Mortgage equity withdrawal remained positive in Q1 of 2022 but will likely decline going forward as higher rates take a toll. To be clear, homeowners have a record amount equity that could be withdrawn but higher borrowing costs make it more punitive to do so. Expect it to eventually be a drag on growth. Calculated Risk The flip side is that this massive amount of untapped equity represents potential demand that could spark a further economic boom when rates eventually fall again.
All Time High: Median national asking rent passed $2,000 for the first time ever in May. With more people living alone and rising interest rates stressing homebuying affordability, demand side pressure is making renting more expensive but increasingly attractive versus buying. Redfin
Chart of the Day
It would be difficult to find a much better illustration of the bullwhip effect.
Source: The Daily Shot
WTF
Make it Rain: A Burger King employee was caught on video throwing drinks on a couple after a dispute over an order because Florida. WFLA
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
Visit us at RanchHarbor.com