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Enjoy summer because it’s going to get ugly after that.

Election season is upon us. It would be naïve to think that the election won’t have an impact on markets, specifically the real estate market. We’ve discussed if the Fed will get pulled into the politics and how that would impact interest rates and housing. Today, I want to talk about the impacts of the election from a broader perspective.

I’m worried about losing friends.

Do you remember the 2020 election season? It wasn’t pretty. Granted we were in the midst of a pandemic, racial injustice and police reform, there was a supreme court vacancy at play…oh, and we were questioning the legitimacy of elections and democracy itself. It makes sense that our country was as polarized as it’s ever been, even before you consider biased media sources and social media fanning those flames.

You know what I think it worse than all of that?

People are feeling poor. Money makes us behave very, very badly. So as we sit across dinner tables from people we love through all the years that aren’t election years, I fear things will be more heated this year because people are financially strapped. It is not a matter of voting with your wallet, it’s not even a matter of fiscal policy versus social issues. It’s simply that when you have money problems, your ability to think straight is highly impaired.

Bad Money Cycles

I have a unique vantage point when it comes to other peoples’ finances. My job is to hand out financial strip searches. I’ve noticed a lot of people in viciously self-destructive cycles when it comes to money. They are stressed about it, sitting there staring at the screen in panic about how they are going to pay for everything due this week. That panic is paralyzing. So then they fuck up at their job. They miss opportunities to make money and make all the mistakes that cost them more money. It’s happening even with entrepreneurs and independent contractors. They get behind and then the money doesn’t come in and then they get stressed that the money isn’t coming in and get further behind.

It’s helping me a lot right now to keep in mind that people are struggling. When a borrower bites my head off about something inconsequential or a realtor snaps at me, when my team at work is dragging or my kids piss someone off – I’m reminding myself to show people grace because these are hard times. Someone cuts me off on the road, I just try to get out of the way. I don’t know how unhinged they feel today and I live in Reno, where most people are carrying regardless of their level of hinged.

2024 Election Issues

We’ll have some of the usual election issues to discuss this fall – climate change and social justice. I think it’s safe to say we’ll still be discussing the legitimacy of elections and voter fraud. I know for certain global issues and geopolitics will be a big deal. I’m also certain that the economy will be the headliner at every debate. Housing affordability, wealth distribution, inflation.

When I was in my 20’s I felt certain that politicians were heroes. This guy was going to save us all and change the world, while the other guy would ruin us all. Call it old age and cynicism, but I don’t feel that way anymore. I don’t think either of our prospective candidates gives a shit about me and family. I don’t think they care about the families I’m trying to help afford homes and build wealth.

So my message today is: Let’s have a good summer with our friends where we have civilized conversations and enjoy each other’s company. Come fall, I might be hiding from all y’all until things calm down.

(Kidding, you know I’ll still be here with the weekly updates, and they’ll probably be spicy.)

Wait Shivani, what’s going on with rates and real estate?

Oh yeah, I forgot, that’s why you folks are here.

My team is currently the busiest we’ve been in almost 2 years. And not just attempting to preapprove people who don’t qualify or putting together offers that won’t get accepted. We are seeing more families be successful in this market. After this weeks’ closings, we have 20 families getting read to close on a home in the next 30 days. I’m also noticing more inventory come on across several price points.

Interest rates have cooled following a weak jobs report and decent inflation reading. Those two reports gave headway to over 100 bps of improvement with rates. It seems to be sticking too. Some economists are predicting a rate cut this year, maybe even two. Goldman Sachs forecasts the first cut in September. Just in time for election season.


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