Monday, December 21, 2020 / by Vanessa Saunders
Tonight marks one of the most significant events in the annual astrological calendar, and also one of the rarest cosmological events of the century. The annual Winter Solstice marks the shortest day (and consequently the longest night) of the year. The second, the Great Conjunction, is an every 800 or so year event in which the two largest planets in our solar system will nearly overlap to viewers on Earth to form a visual “double planet.”
For astrologists who use the stars to tell the future, this is a significant event. According to Emily Segal, an astrologer who leads an astrological think tank named Nemesis, “This event...marks the official shift from a 200 year period during which Jupiter and Saturn made conjunctions primarily in Earth signs into a 200 year period of conjunctions in Air signs, marking the advent of a new epoch in a larger 800 year Macro-cycle.”
What Ms. Segal sadly fails to include in her statement is any reference to real estate, and when this crazy market will end.
The real estate market in the Hudson Valley (not to mention in the whole of the United States as well) has been knocked on its ear in 2020. Have you seen how buyers are fighting over listings these days? Why does everybody want to buy a house during a recession? Three reasons, basically tell the story.
1. People are fed up with living and working out of small apartments in expensive ghost cities.
2. They are taking advantage of their employer’s new work-from-home policies and are packing up and fleeing to suburbs and cheaper cities.
3. Interest rates have sunk from 3% and 4% to a record 2.9%. Anybody with a down payment and a dream can suddenly afford a house, even despite record housing prices.
But the problem is you can’t buy a house that’s not for sale. We are experiencing the greatest housing shortage in modern American history. The number of homes currently listed for sale could be sold in just under two months. That’s six times quicker than at the height of the 2008 housing boom.
Last December, we were just climbing out of a “shortage threshold” for the first time since 2006. Home builders were building enough homes to very nearly meet current demand. Then Covid hit and new housing starts fell off again. Home construction has bounced back, but it’s nowhere near the level needed to quench the pent-up demand.
So if we’re in a recession, where is the tsunami of foreclosures? We have 30+million Americans out of work. In a recession, people lose jobs and default on mortgages. Then foreclosures flood the market with listings and push down real estate prices. The answer? Thanks to the Cares Act, that hasn’t happened. Since April, Uncle Sam has doled out $720 billion in extra unemployment benefits and checks. The result: during one of history’s worst economic crises, Americans’ income grew at record levels.
There is no easy answer to when this crazy market will finally end, but when it does, it won’t be without pain. Uncle Sam will have to stop handing out checks. Builders will have to throw up new homes for years to come. Interest rates will need to stay ridiculously low, and a sad wave of foreclosures will finally quench the market’s thirst for inventory.
Until then, keep your eyes on the skies for any real estate changes in our new 800-year MacroCycle.
Photo by Ian Stauffer on Unsplash