Since my last check-in the economic turmoil seems to have leveled off a bit. The ripple effect of the collapse of Silicon Valley Bank is largely over, although there are plenty of vulnerable banks out there. I’ve wondered for years when we’ll face the next economic reckoning, and it amazes me how quickly people have forgotten the lessons we should have learned in 2009.
Looming over the market now is the next meeting of the Federal Reserve. Chances are they’re going to raise rates yet again to combat inflation, although given the government won’t stop printing and spending money it’s like giving a blood transfusion to someone who has a severed artery. “Optimal” inflation is 2%, we’re still 5+. Furthermore, earnings reports aren’t particularly rosey. Fortunately for DFW, we are a top-5 economy and a top-5 real estate market. It’s not to say we won’t be affected in the coming downturn, but we stand to be incredible fortunate.
“But John, you shining paragon of human virtue,” I hear you ask, “Surely DFW is doomed for a market adjustment after the last 2 years of price inflation.”. Well, fictitious person, while it’s true those who bought a home above list price last summer will likely need to sit tight for a couple of years, it’s merely a return to what is normal. There was once a time, let’s call it all of recorded history preceding 2020, when Dallas had a market comparatively sleepy to other major metropolitan areas, when you could count on a steady escalation of prices, usually 3-5% per year.
On a positive front, the housing affordability index had improved a bit. Up from it’s all-time low (low is bad) of 75 last summer, it sits now at 89. Basically 89% of families can afford the median-priced home in the DFW market. We’d love to see that at 100 or higher, but barring a very stagnant market for the next few years, it’s unlikely wages will catch up with prices.
Lastly, as I write this I’m preparing for yet another spring client appreciation party. It’s always a great time and a chance to thank people for their business, referrals and continued support, but I must admit getting the house in the condition for 40 people to come over takes a toll on Kacie. If it was just me, I’d be living off of egg crates and an old ratty leather couch… apparently the standard of living requirement is just another perk of marriage.
A classic architectural style found all over the world, Spanish Colonial first appeared in the Americas in the 1600s when Spanish settlers arrived, using local resources like adobe with a stucco finish for both interior and exterior walls, and clay tile roofs. While the Colonial period ended in the 1800s, the style was revived in the 1900s, becoming very popular with homebuilders.
Best suited for warm climates due to their adobe/stucco construction, Spanish Revival also features small and infrequent windows which facilitate airflow, wooden support beams, very few (if any) decoration, and typically an interior or exterior courtyard complete with an outdoor kitchen that prevents unduly heating the home’s interior.
A great many higher-end new construction homes in Dallas’ most premier neighborhoods are Spanish Revival.
In a lot of ways it feels like 2008 all over again. Uncertainty dominates the business world, and it’s invariably affecting the real estate market. Interest rates dropped a bit with the collapse of Silicon Valley Bank; the Fed hopes a little more liquidity to banking will help. What’s different from the crash of 2008? Quite a bit actually.
Sidebar: I’m going to point out here the therapeutic effect of expressing frustration on a computer and deleting it. I’ve written this paragraph a half-dozen times raging about various political an economic figures, then wisely deleted them because it would end up pissing someone off.
Needless to say the real estate market was among the chief causes of the 2008 crash, in 2023 it’s a symptom. I’m not into predicting the future, but we can all be fortunate that Dallas is going to be one of the top performers in the nation yet again. What that looks like I don’t know, but thus far we’re seeing real reflections of 2016 and 2017, which were good but not great years.
I took a trip down to New Orleans the weekend of the 18th to see a show. Anyone who has never been to the French Quarter owes themself the trip, but don’t expect to be there longer than a couple of days. It reminds me a lot of the West End, with turn of the 20th century buildings that have been endlessly repurposed, reconfigured and reconstructed. Every night it serves as a drunken playground to the United States, and every morning it is cleaned up and made ready for the next night. There’s a really cool energy to it, albeit dirty and certainly not a place I could live. Among the people I met was political strategist Donna Brazile. She was a very interesting, extraordinarily intelligent lady. Great handshaker.
From 1880-1900 a very monochrome style of house, reminiscent of Queen Anne architecture, rose to prominence, gaining notoriety for the heavy employment of shingles on walls, gable ends, curving towers and porch columns. It was appropriately named Shingle Style. Although it never gained the popularity of Queen Anne, it nonetheless spread from New England all over the United States.
In addition to shingled walls and roofs, Shingle Style featured expansive front porches, asymmetrical designs, irregular, moderately pitched roofs, and polygonal or round shingled towers.
It’s becoming a running joke at this point because he seems to have done it all, but yes, Frank Lloyd Wright did significant dabbling in Shingle Style.
Let me start with the fact I am notorious for my disorganized, messy office, so I’m writing this article as much for myself as I am for you.
So many people moved home full-time during the pandemic began 3 years ago; many have continued working from home full-time to this day. While it was a easy transition to some, to other it’s taken a toll on their productivity, and maybe it’s time to take the spring cleaning spirit to your home office.
1) Remember It’s An Office – Home offices can easily become the catch-all for mail, bills, kids soccer gear, golf clubs, etc. If your home office is truly your work station and you use it regularly, treat it as one. No superfluous junk items, boxes or clutter. It is your temple to do work.
2) Reasonable Minimalism – In a perfect world, your office would consist of a clean desktop, your computer, printer, and organizing pieces, but there are some things you use all the time. If you use a notebook, box of envelopes, roll of stamps, etc on a regular basis, don’t let organization impede efficiency, but don’t be afraid to have a place for them when you’re done.
4) Different Areas, Different Tasks – If you do regular tasks requiring different spaces, organize appropriately. Be it a computer station, mailing station or research station, consider if your work flows from one task to the next and plan accordingly.
5) Don’t Forget Your Health – We no longer live in the days of the vanilla workspace. If you have back issues, consider a Varidesk that can be used standing up. It’s a rare person who couldn’t use more steps, there are plenty of apps on your phone or computer that can remind you to take a break and stretch your legs. If you want to make posture a priority, consider a resistance ball instead of your standard desk chair.
If you look the most recent MLS statistics, the signs are all over the place. Median days on market is still very low comparative to historic averages, but market inventory has doubled and interest rates have certainly stretched home affordability. While I’ve been told we’ll see rates in the upper 5’s this spring and summer, recent economic reports have shown that current rates are not cooling down inflation. It would appear that the “soft landing” we were hoping for will turn into a recession. To those of us who remember the Great Recession, it’s unlikely we’ll see anything like that. Real estate was a if not the primary driver then, now the market slowdown is just a byproduct of more money that has ever been printed in human history being pumped into the US economy.
If there is a positive statistic to the market leveling off, it’s home affordability. Dallas was historically one of the most affordable major metropolitan areas in the United States (probably due in part to our crippling summers and lack of natural topography…). Since the 80’s, however, DFW has worked very hard to present a very diverse economy, and the benefits are being reaped in the form of mass migration to the area. Unfortunately, basic rules of supply and demand have driven up home prices because as the old real estate idiom says, “They ain’t making any more dirt.”.
A housing index of 100 means the median income home can afford the median-priced home. We’re hovering slightly below that right now, and it’s not being helped by the slow return to normal homebuilding rates. It’s likely going to drop a bit over the next few months as it does the first half of every year, but I wouldn’t be surprised if it eclipses 100 in the winter, which is when many are predicting the recession is going to arrive. Hopefully I’m wrong.