Location Strategy Chartbook 011124

Welcome to our newsletter, where we guide you through the dynamic world of economics. Explore trends from household net worth to the rental market, employment shifts, and an upcoming surge in apartment supply. Join us in uncovering the stories of adaptation, challenges, and opportunities that shape our economic landscape.

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Location Strategy Chartbook

Record Surge: Core Producer Prices Up 17% Since Biden's Election

In a significant economic shift, core producer prices have hit a record high, surging by 17% since President Biden's election. This raises questions about the causes and potential impacts on various sectors, necessitating a closer look at factors like supply chain disruptions and increased demand. Join us as we explore the complexities surrounding this notable economic development.

Decoding Economic Patterns: Unveiling the Potential Second Wave of Inflation

This chart shows past inflationary spikes in the 1940s and 1970s that each had a scond wave. With the apparent resurgnce of inflation in December, a second wave of inflation looks increasingly possible,

Assessing Rate Cut Expectations: Market Sentiment and FOMC Forecasts

In recent updates, there has been a further easing of market expectations for rate cuts in 2024. However, it's important to note that these expectations, while tempered, still exceed the projections set forth by the Federal Open Market Committee (FOMC).

This discrepancy between market sentiment and the FOMC forecast sparks interest and raises questions about the factors influencing these divergent expectations. As we navigate through this dynamic landscape, keeping a close eye on economic indicators, global events, and central bank communications becomes essential to understanding the evolving outlook for interest rates.

Decoding Employment Trends: Different Surveys, Divergent Results

In a surprising twist, the employment numbers from the Household Survey took a different turn compared to the Establishment Survey, showing a noticeable drop in December. While the Establishment Survey mainly focuses on payroll employment, the Household Survey considers various employment factors, including self-employed and agricultural workers.

This difference highlights the challenge of accurately measuring employment trends using various survey methods. Understanding these variations is important for making informed decisions about the economy, and it’s one of the reasons we distrust some of the economic data coming out of the government.

Changes in Jobs: More Part-Time Work Recently

In a recent development, there has been a noticeable shift in the composition of jobs, with a move from full-time to part-time employment in the past month. This change prompts a closer examination of the factors influencing this transition and its potential implications for the workforce and the broader economy.

That is, the employment data doesn’t look as good when you consider how many part-time jobs it includes.

We will watch this data for more developments. Below are annual job growth forecasts for major markets. Texas Generally is in the clear.

Financial Resilience Unveiled: Household Net Worth Surpasses Pre-COVID Levels

Post-COVID wealth effects are still pretty strong, even though we see household net worth figures coming down slightly in the last quarter.

Trending Now: Rental Costs and Vacancies

The present state of the rental market introduces a fascinating dynamic, marked by a dual trend of moderating rental costs and a simultaneous rise in vacancies. As rental costs undergo a moderating trend, tenants are presented with a valuable window of opportunity to explore a broader range of housing options that align with their financial goals.

Concurrently, the increasing number of vacancies prompts property owners to navigate strategic adjustments, requiring a thoughtful approach to property management, pricing strategies, and tenant attraction efforts. This dual development not only reshapes the immediate landscape of the rental market but also underscores the need for stakeholders to adapt and make informed decisions in response to these evolving dynamics for the long-term sustainability of the housing sector.

Anticipating Growth: Surge in Apartment Supply Signals Shift in Real Estate Dynamics

The apartment market is going to see the largest number of units delivered to the market since 1974.

Rising Momentum: Cities Experience Positive Rent Growth

Cities are seeing more positive rent growth, creating opportunities for renters and property stakeholders. This shift could mean higher rental costs for tenants, but it also brings improved housing options and better amenities. For property owners and investors, the increase in positive rent growth signals a favorable market for potential returns on investment, emphasizing the need for strategic property management and awareness of local market dynamics.

This trend reflects the resilience of the real estate sector and suggests potential economic growth and increased housing demand. Staying informed about regional variations, market conditions, and evolving rental trends is crucial for all stakeholders. Whether you're a renter exploring housing options or a property professional navigating the market, understanding the dynamics of positive rent growth in cities is essential. Keep an eye on these developments and share your thoughts on how this trend is impacting your local housing market.

Mortgage Applications Show Resilience, Hovering Just Below 2016 Levels Last Week

Mortgage applications rose slightly last week, just below 2016 levels, signaling resilience in the housing market. Factors like low interest rates and increased economic confidence may be driving this positive trend. Monitoring future trends will offer insights into the real estate market's dynamics and its impact on the broader economy.

CoreLogic Forecasts 2.5% Increase in Home Prices by November

CoreLogic predicts a 2.5% year-over-year rise in home prices by November, signaling a shift in the real estate market. This moderate yet steady growth raises questions about the factors driving this increase, such as supply and demand, economic trends, and regional variations.

Goodbye WFH: Adapting to the Return to Office

Full-Time Job Numbers Indicate Elevated Recession Risks

Recent data on full-time employment suggests that the risks of a recession may be higher than previously anticipated. Delve into the implications and factors contributing to this concerning economic trend