McKae Properties Real Estate Market Commentary

 We certainly do not have a rising tide; other than, interest rates.  The issue with the rising rates is that they have occurred in a quick like fashion that does not allow the market place to adjust.  The result the tide is going out.  As a result many of the rocks, debris and sunken ships are exposed.  This is especially the case when the rates rise without time to adjust. The issues of the past indicate the problems of the future.  Whenever the FED has found themself behind the curve the quick action to raise rates to catch up to inflation has created issues.  This goes back to the 70's and the eventual result of the end of the 70's with the numerous financial crisis that occurred.  The reoccurrence of the lowering tide has created issues in the past and they can be seen in the present. The issues are complicated by the various securities created by Wall Street and Banking.  Specifically: LDO...loan default obligations, and CDO....collateral debt obligations.  Insurance comp

Asset Dis-Inflation The FED has publicly stated that interest raises are being done to stop inflation.  If you paid close attention to FED Chairman Powell's last remarks, he stated he wants to lower "home prices" for all Americans.   Elon Musk stated in one of his posts that his view was the FED was looking at asset dis-inflation.  That to me also mean Stocks, Bonds, Investment vehicles of all color and types, and Real Estate What we have seen so far is that Real Estate prices are dropping across the United States; irrespective of location.  Luxury Home Sales Plunge Across the U.S. per a Wall Street Journal article dated September 23, 2022.  Locally the Luxury Market is defined by Atherton, Woodside and Portola Valley.  Prices in those markets come down by 7 digits in some cases.  One Woodside home was originally listed at $110 million with several price cuts it is now at $48 million.  Days on the Market are increasing and Sales Price to List Price have come down to a dis