Weekly Round-Up #11

Weekly Roundup – February 11th, 2022

Urgent, incisive, and actionable insights concerning NorCal CRE. Curated weekly by Sparacino Realty.

We have a bit of a mixed bag this week. Inflation spikes more than expected, adding urgency to the Feds’ plans to raise interest rates. Mortgage loan application volume drops, but foreign investment in U.S. commercial property soars to nearly double the 2020 volume. Oh, and you can go sans mask now if that’s what you’re into. 

U.S. Inflation Charges Higher With Larger-Than-Forecast Gain

Labor Department data released Thursday revealed that the consumer price index climbed 7.5% from a year earlier following a 7% annual gain in December –– the biggest hit to American paychecks since 1982. This surge comes as a small shock sending the yearly inflation rate to a fresh four-decade high and adding more urgency to the Federal Reserve’s plans to start raising interest rates. Expect housing prices to offer a tailwind to inflation in coming months. (Bloomberg

Traders Lean Toward Half-Point Fed Hike After Inflation Surge

The follow-up to the above: traders ramped up wagers that the Federal Reserve will raise interest rates more aggressively after the unexpected inflation spike. Futures are pricing in a greater than 50% chance the central bank will boost rates by a half-percentage point next month for the first time since 2000. After months of asserting that rising consumer prices were transitory, Fed Chair Jerome Powell left the door open to increasing rates at every meeting this year. At a press conference after the latest Federal Open Market Committee meeting, he didn’t rule out the possibility of a 50-basis-point hike. (Bloomberg

Mortgage Loan Application Volumes Drop

US mortgage loan application volumes to purchase or refinance a home in the U.S. dropped 8.1 percent on a seasonally adjusted basis over the past week. According to the Mortgage Bankers Association, they were down 6 percent in the absolute, with a 10 percent drop in applications to purchase a home. This drop is steep, with activity down 12 percent on a year-over-year basis, while refinancing activity is currently running 52 percent lower than at the same time last year. And as Socket Site stated earlier this week, purchase activity in San Francisco is down by double digits, as well. (Socket Site

Berkeley, Alameda County will join state in lifting mask mandate Feb. 16

This Wednesday, Berkeley joined the rest of the Bay Area with health officials dropping the mandate that vaccinated people wear masks in most public spaces. City leaders will leave businesses the option to require customers to mask up. They cautioned that continuing to wear a face-covering indoors is still “strongly recommended” with omicron and all the other fun new variants raging. (Berkeleyside

Foreign Investment in U.S. Commercial Property Exceeds Pre-Pandemic Levels

Overseas investors are joining American investors by honing in on warehouses and rental apartments. Foreign investment in U.S. commercial property surpassed pre-pandemic levels in 2021, as overseas investors bounced back in the game on the back of easing travel restrictions and revival of the U.S. economy. Pensions, sovereign-wealth funds, and other foreign institutions purchased $70.8 billion of U.S. commercial real estate in 2021, according to data firm Real Capital Analytics. This was nearly double the 2020 statistic. Booyah. (WSJ)

Past Insights

Taking a break from Commercial Real Estate Brokerage

Hi All, I dislike it when people don’t keep up on blogs.  I am an offender in my own eyes and I apologize to you, the reader if you feel the same way.  The truth is that I’ve decided to..

Read More

US Housing Affordability Worsens to New Record Low on High Rates

Interesting article from Bloomberg about housing affordability in the US. See the link here.

Read More

Contact us

Life is 10% what happens to you and 90% how you react to it. It does not matter how slowly you go as long as you do not stop. Confucius.

Footer Contact Form