For the first time in a couple of years, the economic forecast is showing genuinely troubling signs. We have long been due for a Wall Street adjustment; the inevitable adjustment has been propped up for quite a few years by deficit spending and cheap money. With inflation rising, the Fed has had to raise rates pretty dramatically, leading to a full-point spike in interest rates for a 30-year fixed mortgage. In context, that puts rates right around 4%, which is still obscenely low. I remember when I was a kid, auto dealerships offered 19.9% financing. A $400k house on a 30-year note at 4% is roughly $1,800/mo (minus taxes and insurance). On 20% it’s more like $5,600. Yeesh.
“But John, you omniscient seer,” I hear you ask, “is the DFW market faced with a correction?”. Well, dear reader, no, Unless the laws of supply-and-demand economics are turned upside down. Tens of thousands of refugees from California continue to wash up on our fertile shores, with nary the clothes on their backs and $4,000,000 in their bank accounts after selling their shanties in Malibu. We’re also seeing an incredibly high number of first-generation Americans enter the metroplex. I had 30 offers on a listing just outside Allen, 27 of them were from either Indian, Asian or Persian-Americans. I heard a great many stories about parents wanting to buy a piece of property for their children, I wish I could have sold all of them acreage.
As of my writing this, I’m staring out the window at a frozen wasteland. Temperatures stand at 25 degrees, traffic is at a minimum. God, I miss the days of minimal traffic. If there’s one thing that really frustrates me about Dallas’ growth, it’s the traffic. It’s high-time we hit the age of flying cars.