Weekly Brief – May 3, 2021

Although I could easily write about the ongoing themes of the red-hot residential market, the cratering retail sector, the hot industrial market, or the enigma that is the office market, this week the focus is on the future of the residential market.

The unknowns in the residential market are whether the trend to bigger homes and the flight to suburban and exurban areas will continue. The other unknown is what will happen to the residential inventory when the foreclosure moratorium is finally lifted. The numbers appear to be trending in the direction that we will have a bump in foreclosures and not a tidal wave. If that is the case, the inventory of homes on the market may continue to be constrained through 2022. Unfortunately, new construction does not appear to be a savior for the inventory issues, as the pandemic has caused raw material prices to skyrocket. So the answer to our constrained inventory of homes for sale continues to evade.

All of that leads to the conclusion that, contrary to my intentions, I guess I am writing again about the red-hot residential market. Until the inventory constraints are lifted, the market appears poised to remain a serious seller’s market, and prices seem destined to rise.