Happy Labor Day!

DID YOU KNOW? 

• 92% of home sellers who sold within the last year had accepted some buyer-friendly terms. 41% had accepted some contingencies in the contract. (MARKETWATCH)

• UK house price growth slowed less than expected in August (prices up 10%) as a lack of housing supported prices, despite falling household incomes and rising mortgage rates. (FT)

• Goldman Sachs economist Ronnie Walker said housing starts have dropped 20% from their peak and existing home sales have dipped by 30%…..but let’s not forget all of this is being compared to extreme activity in 2021. High mortgage rates at 5.8% — they were just 3.2% in January — are partly to blame. Sales and permits have fallen more sharply in regions where they increased the most in the earlier part of the pandemic, suggesting a retreat from the pandemic-related boost to housing. Walker estimates existing home sales will fall another 12% by the 4th quarter, and new home sales will be flat. He estimates house price growth on a quarterly basis will slow to 8.5% in the 3rd quarter and 3% in the 4th quarter, which will take the year-over-year rate down to 14% by the end of 2022. In 2023 Walker predicts home price growth will stall completely. (MSN)

• Economist Steve Hanke predicted last year that U.S. inflation would be somewhere between 6% and 9% in 2022. Now the model is running at between 6% and 8% at the end of 2022 on a year-over-year basis, and 5% at the end of 2023 going into 2024. (Marketwatch)

• Blackstone’s single-family investment arm announced that it was pausing all home purchases in 38 U.S. cities as markets cool. But while sales activity is slowing and prices are cooling due to rising interest rates, experts say only a matter of time before institutional investors, with their ability to buy homes in cash, return to the market in full force with an even bigger advantage over individual homebuyers and mom-and-pop investors. (BISNOW)

• At Amazon – and arguably at any company with any sizable in-house engineering team – technology is and always will be just a tool to apply to achieve a better business outcome. In Jeff Bezos’s seminal 1997 shareholder letter, you’ll find that the word ‘technology’ doesn’t appear in that letter, at all. Not once. The letter focuses on how Amazon will continue to improve the experience it offers customers to achieve better business outcomes, and, by doing that, how it will focus on maximizing the present value of future free cash flows. Amazon’s 2010 Letter describes many of the technologies that Amazon deploys – but all of them are simply a means to an end, a way to solve a problem or capitalize on an opportunity. Technology is the fundamental tool we wield to evolve and improve every aspect of the experience we provide our customers. Sound familiar? (Greg Hart, COO COMPASS, ex-VP Amazon)

~By Leonard Steinberg