What we’re reading (8/27)
“Shorting Zillow Is Your Best Bet In Housing This Year” (Zillow). “U.S. home seekers are desperately eyeing an expected turn in housing prices, but the best near-term deal in real estate could come from yet another price cut to Zillow’s stock. Having lost two-thirds of its value over the past 12 months on the heels of its home-flipping implosion, Zillow Group has already fallen to a market capitalization of barely $8 billion, despite the fact that virtually every U.S. adult is still “surfing” its namesake site monthly.”
“Is America On The Verge Of A House Price Collapse? Prices Could Crash By Up To 20% And Homes Are Overvalued By As Much As 72%, Expert Warns” (The Daily Mail). “housing inventory is at its highest level since April 2009, as sellers struggle to get rid of their property because mortgages have become more expensive, and other financial pressures - high gas prices, soaring costs of groceries - continue to be felt.”
“The Rent Crisis On Main Street Just Took A Turn For The Worse” (CNBC). “Nationally, apartment rental prices, which have soared, are among the inflation indicators that may have recently peaked. But the Alignable data shows that the rent inflation crisis for small businesses is actually getting worse. Forty percent of small business said they could not pay their rent in full this month, up 6% month over month and setting a record for 2022.”
“Get Used To Startups Trying To Reinvent Housing” (Wired). “For the past two decades, a confluence of factors has caused young Americans to give up on buying houses, a pattern also seen in the UK and some other European countries. New construction has stalled, existing supply has remained tied up, and population booms in urban areas have driven up housing costs. Nearly one in five homes in the US is now bought by institutional investors—not individuals—adding further competition. As a result, the share of first-time home buyers has shrunk, leading more millennials to rent well into their thirties and forties.”
“China’s Overextended Real Estate Sector Is A Systemic Problem” (Michael Pettis, Carnegie Endowment for International Peace). “[W]hat happened in Henan was not the first adverse credit event to hit the Chinese financial system. It was just the most recent in the country’s latest string of notable financial events, which can be said to have started back in May 2019 with the intervention in Baoshang Bank. A little over a year later, Baoshang became the first Chinese bank to be shut down since Shantou Commercial Bank closed shop in 2001.”
