McKae Properties Real Estate Market Commentary

OPENING COMMENTS The end of the year has always been a period of clean up of inventory.  This year is no different.  We are faced with the same issues past markets have been faced with.  Except, the present situation is in reverse.  The increasing rates have supplanted the falling rates.  which in turn has meant rising mortgage rates; rather than, falling rates that in some area of the world dipped to negative rates.  The problems face in the past were economic and health, lower interest rates and increasing money supply helped save the world economy.  Unfortunately, the excesses that occurred led to problems that are in todays economic environment.  Those problems were over speculative tendencies that lead to over priced assets.  Those assets created problems with housing and the lack of affordable housing.  Other assets such as new business have created Poster Children of our time.  You know them well, we may see others join the list as interest rates slowly creep up in the future. S

 Somewhere's in my readings, I came upon the quote,"the problems are the path".  It was  based upon the learning process of humanity; in that, we learn and progress from problem solving.   We do have problems we need to solve.  The problems started with the Pandemic, the shortage of employees and the shortage of homes for sale.  This was then combated with the Federal Reserve System (FED) dropping rates to unheard of low that affected the entire world with some countries going to negative rates.  At the time the Risk Free Rate of Return was down to less than 1%.  That meant that investments of all sorts were fair game.  Next to nothing in money market funds, T-Bills or saving accounts were not with leaving money in them and panic buying occurred in Real Estate, Commodities, Stock Bonds and the esoteric investments; such as, Crypto Currencies.   With the Pandemic over, those laid off went back to work.  All were flush in savings with the $9+ Trillion the FED fed into the e