Seasonality is returning to the Denton County housing market. Home sales fell for a fourth consecutive month in October. Closed sales were down 15 percent. Pending sales fell 9 percent from the same time a year ago. Home prices in Denton County are still overheated. Median prices were up 17.3 percent. The average price of a Denton County home was 22.6 percent higher compared to last year.

While prices remained off their record highs seen in August, prices on a per square foot basis set new records. The median of $186 per square foot was a new record for Denton County. The average of $192 tied the record seen in August. With the Fed now committed to tapering its asset purchases, the liquidity that was fueling rampant home price inflation is going to start shrinking next month. This reality has not been lost on the market.

It is worth noting that the average percent of list has also declined for four consecutive months. At 101.7 percent, we’re still far hotter than normal market conditions, but below the manic peak of 105.4 percent seen in June.

Inventory remains very low, so that is providing lift to prices. Months of supply in Denton County fell to 0.9 in October. With less than a month of supply, some buyers are still willing to bid up the limited inventory. Days on market, while still near historic lows, remained on an upward path for a fourth consecutive month.

Mortgage interest rates remain near 3 percent and liquidity is still plentiful. All of that excess liquidity is pushing inflation through the roof. The government’s official measure of inflation hit a thirty year high according to the latest data for October. The CPI headline print of 6.2 percent caused quite a stir in the markets. Some economists were generally surprised that inflation has been so sticky. Officials at the Federal Reserve still seem to be oblivious to reality. Remember the time when inflation was at a 3o year high and the Fed funds rate was at zero? Me either. It’s never happened before.

CPI Inflation vs Federal Funds Rate October 2021

As Fed and government officials scramble to contain the inflationary spirits they unleashed with massive Covid stimulus measures, markets are still trying to figure out how this all ends. If history is any guide, it’s going to be a bumpy ride.

Speaking of bumpy rides, Zillow deserves a special shoutout for one of the biggest home-flipping disasters in U.S. history. After diving head-first into the brokerage and home flipping business, it certainly didn’t take long for Zillow Offers to crash and burn. Adding insult to injury for prospective home buyers, the Wall Street Journal is reporting that Pretium Partners (aka Progress Residential, one of the nation’s largest single-family landlords) is going to buy 2000 of Zillow’s remaining homes in inventory. There’s nothing like Wall Street parasites giving the middle finger to prospective American home buyers.

If you are in the market for a home, don’t despair. Remember what Jerome Powell keeps telling us. Inflation is transitory. Oh, wait. Who are we kidding. It’s pretty obvious by now that the central bankers running monetary policy for the U.S. are a bunch of con artist profiteering clowns. If you have been shopping for just about anything lately I’m sure you can relate. It’s no mystery why American workers continue to revolt en masse in the pursuit of higher wages. Behold the destruction of the purchasing power of the U.S. consumer dollar.

Purchasing Power of Consumer Dollar October 2021