What I’m Reading
Dried Up: Refinance activity has dried up and isn’t expected to rebound this year per Old Republic Title’s earnings call. Housing Wire
Drying Out: Arizona has become the first state to experience deep cutbacks caused by a drought-fueled decline in the Colorado River. The reduction will hit farms this year, leaving large amounts of land unplanted. If shrinking water flows in the river don’t reverse, cities in Arizona and other states could be affected next, officials say. Wall Street Journal This is obviously a huge issue considering the rapid growth in population that Arizona has been experiencing. It will be next to impossible for that growth to continue without a solution that provides water.
The Empire Strikes Back: Roughly 40% of the nation’s goods now travel through the Inland Empire as the logistics industry has grown to dominate the region. However, the proliferation of warehouses – and the trucks and trains that service them – has resulted in the worst air quality in the US. As a result, environmental groups and local residents are pushing back against future development. LA Times
Backstop: Soaring mortgage rates and housing prices may lead to more homes falling out of contract with buyers who no longer qualify for a loan. Institutional investors are being eyed by the industry as a backstop with cheaper financing, especially at the entry level. However, the political backlash to investor buying is already underway and will continue to intensify if their share of purchases continues growing at a time when more people are priced out of home ownership. Globe Street
Hangover: Amazon built and hired rapidly during the pandemic to meet ramped up demand for ecommerce. That ramp up has resulted in excess capacity in its fulfillment and transportation network and an overstaffing problem. As a result, Amazon is now expected to withdraw some of its planned projects. Currently, it looks like 3PL providers are filling in the gaps in an extremely tight industrial market. Bisnow
Chart of the Day
Three out of five income quintiles have still seen a positive real disposable income growth, despite inflation. The bottom quintile is definitely hurting, but it also accounts for 7% of total consumption.
Source: Marko Papic
WTF
Surprise: A couple found an 8-foot long alligator hiding in their garage because Florida. News 7 Miami
Hamburglar: A woman got into a shootout with woman in a McDonalds because Florida. News Channel 8
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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