{"id":4744,"date":"2023-01-04T20:41:45","date_gmt":"2023-01-04T20:41:45","guid":{"rendered":"https:\/\/imsfund.com\/?p=4744"},"modified":"2023-01-04T20:41:45","modified_gmt":"2023-01-04T20:41:45","slug":"builders-are-getting-frustrated-and-now-theyre-doing-this","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/01\/04\/builders-are-getting-frustrated-and-now-theyre-doing-this\/","title":{"rendered":"Builders Are Getting Frustrated, And Now They&#8217;re Doing This"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\"><button class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">The mixture of (relatively) high interest rates and economic volatility with the fact most homeowners have fixed, low-interest rate debt had induced what real estate economist\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/calculatedrisk.substack.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bill McBride<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0refers to as the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-sellers-strike-has-begun-why-the-housing-market-is-going-dark\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">\u201csellers strike.\u201d<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0As should be expected on the heels of such stubbornness, developers are beginning a \u201cbuilders strike\u201d to follow suit.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As\u00a0<\/span><em><span data-preserver-spaces=\"true\">CNBC<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2022\/10\/31\/homebuilders-say-steeper-downturn-is-coming-as-buyers-pull-back.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">reported<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0at the end of October,<\/span> <span data-preserver-spaces=\"true\">\u201cHousing starts for single-family homes dropped nearly 19% year over year in September, according to the U.S. Census. Building permits, which are an indicator of future construction, fell 17%. PulteGroup, one of the nation\u2019s largest homebuilders, reported its cancelation rate jumped from 15% in the second quarter of this year to 24% in the third.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Rick Palacios Jr., the director of research at John Burns Real Estate Consulting, has\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/twitter.com\/RickPalaciosJr\/status\/1590447524560908288?s=20&amp;t=t9tKhvcYEK_b6_wLws9lnw\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">an interesting thread<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0on builder sentiments from around the county. It\u2019s not exactly good.<\/span><\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Home builder commentary from our survey this month was about as negative as I&#8217;ve seen to date. Here&#8217;s some of the market color that jumped out\u2026<\/p>\n<p>\u2014 Rick Palacios Jr. (@RickPalaciosJr) <a href=\"https:\/\/twitter.com\/RickPalaciosJr\/status\/1590447524560908288?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">November 9, 2022<\/a><\/p>\n<\/blockquote>\n<p><span data-preserver-spaces=\"true\">A few samples include a builder in Boston saying, \u201cOctober was exceptionally weak,\u201d in Baltimore, \u201cThe market is terrible,\u201d and in Wilmington, \u201cThe market is falling off a cliff,\u201d etc.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">You get the idea.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Overall, single-family housing starts are falling rapidly. However, multifamily housing starts are, somewhat surprisingly,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/calculatedrisk.substack.com\/p\/october-housing-starts-record-number\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">remaining relatively stable<\/span><\/a><span data-preserver-spaces=\"true\">. It\u2019s likely that multifamily building is propped up to a certain extent by government-subsidized\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/en.wikipedia.org\/wiki\/Low-Income_Housing_Tax_Credit\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">LIHTC projects<\/span><\/a><span data-preserver-spaces=\"true\">, but even still, they will likely decrease soon.<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146192 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 2\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM.webp 1412w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-300x204.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-1024x696.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-768x522.webp 768w\" sizes=\"(max-width: 1412px) 100vw, 1412px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM.png 1412w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-300x204.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-1024x696.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-768x522.png 768w\" sizes=\"(max-width: 1412px) 100vw, 1412px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146192 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 2\" alt=\"housing starts \" height=\"960\" width=\"1412\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM.png 1412w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-300x204.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-1024x696.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.19.23-PM-768x522.png 768w\" sizes=\"auto, (max-width: 1412px) 100vw, 1412px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>Housing Starts, Single and 2+ Unit Structures \u2013 <a href=\"https:\/\/calculatedrisk.substack.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Calculated Risk<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Of course, a major slowdown in building is to be expected. New construction is always heavily dependent on interest rates, and the Federal Reserve has brought the discount rate that underlies the mortgage market\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bankrate.com\/rates\/interest-rates\/federal-discount-rate\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">from 0.25% to 4.5%<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in less than a year.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The reason\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.youtube.com\/watch?v=Zv6ZcQNaNzQ\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the real estate market is unlikely to collapse<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0is because, unlike in 2008, homeowners have low-interest fixed-rate debt, lending standards are relatively strong, and most have a decent amount of equity in their homes. Absolutely none of that has anything to do with the calculus developers use when deciding whether to build a property. In other words, the fundamentals holding up the housing market don\u2019t apply to the market for new construction. Thereby, new construction is falling drastically and could possibly collapse.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In other words, the builders are frustrated, and they are going on strike.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, they can\u2019t do so before finishing and liquidating what could become a minor boondoggle in the American economy: a new construction glut.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">The Coming New Construction Glut<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Already,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.businesswire.com\/news\/home\/20221108005490\/en\/29-of-Homes-for-Sale-in-Third-Quarter-Were-New-Construction%E2%80%94a-Record-High\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">a record 29%<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0of homes for sale in the United States are new construction. Buyer cancellations\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/wolfstreet.com\/2022\/11\/23\/massive-cancellations-make-mess-of-already-low-new-house-sales-inventory-glut-at-deep-housing-bust-1-level-buyer-traffic-plunges\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">increased 7.5%<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0for new builds from September to October and showed no signs of abating. Months of inventory for new construction have increased over 50% from January of 2022 to October, from 5.7 months to 8.9 months. (Generally, six months of inventory is considered a balanced market).\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">And while the amount of time it takes to sell new houses has typically outpaced existing inventory, the gap between the two has become quite pronounced. In October, there were only 3.3 months of inventory for existing inventory (still a seller\u2019s market), only one-third of what it was for new construction.<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146193 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 3\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42.webp 1168w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-300x116.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-1024x395.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-768x296.webp 768w\" sizes=\"(max-width: 1168px) 100vw, 1168px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42.png 1168w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-300x116.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-1024x395.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-768x296.png 768w\" sizes=\"(max-width: 1168px) 100vw, 1168px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146193 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 3\" alt=\"monthly supply of new homes and months supply\" height=\"450\" width=\"1168\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42.png 1168w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-300x116.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-1024x395.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/fredgraph-42-768x296.png 768w\" sizes=\"auto, (max-width: 1168px) 100vw, 1168px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>Monthly Supply of New Homes and Existing Single-Family Home Sales in terms of Months Supply \u2013 <a href=\"https:\/\/fred.stlouisfed.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">St. Louis Federal Reserve<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Unfortunately, there\u2019s no real reason to believe this is going to get better before it gets worse. While inflation\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.kiplinger.com\/economic-forecasts\/inflation\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">has cooled a bit<\/span><\/a><span data-preserver-spaces=\"true\">, the Fed has indicated they plan to keep rates high (relatively speaking)\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pbs.org\/newshour\/nation\/fed-plans-to-keep-rates-high-as-us-recession-still-a-growing-a-fear\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">at least through 2023.<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">But possibly more importantly, as Bill McBride points out, there are more housing units under construction now than there ever have been before!\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146194 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 4\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM.webp 1598w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-300x184.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1024x627.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-768x470.webp 768w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1536x940.webp 1536w\" sizes=\"(max-width: 1598px) 100vw, 1598px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM.png 1598w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-300x184.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1024x627.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-768x470.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1536x940.png 1536w\" sizes=\"(max-width: 1598px) 100vw, 1598px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146194 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 4\" alt=\"housing units under construction\" height=\"978\" width=\"1598\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM.png 1598w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-300x184.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1024x627.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-768x470.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.24.52-PM-1536x940.png 1536w\" sizes=\"auto, (max-width: 1598px) 100vw, 1598px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>Housing Units Under Construction \u2013 Calculated Risk<\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">\u201cRed is single-family units. Currently, there are 794 thousand single-family units (red) under construction\u2026Blue is for 2+ units. Currently, there are 928 thousand multifamily units under construction. This is the highest level since December 1973!\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cCombined, there are 1.722 million units under construction. This is the all-time record number of units under construction.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The increase in construction was in large part due to\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewtrusts.org\/en\/research-and-analysis\/blogs\/stateline\/2022\/09\/08\/more-housing-is-coming-but-the-national-shortage-will-persist\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the nationwide housing shortage<\/span><\/a><span data-preserver-spaces=\"true\">, which is predominantly what\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/how-did-the-housing-market-get-so-hot\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">fueled skyrocketing housing prices<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0over the previous few years. In addition to that, supply chain issues have delayed many projections causing a backlog of properties to remain under construction longer than was intended.\u00a0\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Unfortunately, unlike homeowners who are rarely compelled to sell, builders have little choice. Sure, many will turn to rent these new builds, but the rental market is already\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/money.yahoo.com\/rent-prices-fall-november-2022-134838504.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAFp-ckVWj_Z9pAOHeb_IqwU5Feyd5rECb_GIB_VihPksR2QDZ7qnntU5LGDLvTbNA4Ka05VWOmLpowyp1XIpw7vilfzN9fPnAETDMeUzOmXxfxLICHXCOUeQ6yILMRiPxfcBqiOxtP9bUGwr8WFllrIiKJpP0dL2tvnRrGSn7jSF\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">starting to become saturated<\/span><\/a><span data-preserver-spaces=\"true\">. For most, they\u2019ll have no choice but to sell in what is a buyer\u2019s market and what is likely to become substantially more of one.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Conclusion<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">With notable exceptions (most notably that which is government-subsidized, like LIHTC), it\u2019s probably not the best time to start new development projects. If you are a developer in the middle of such a new build, it would be worth at least considering if it\u2019s economically feasible to rent the property (or some of the properties if developing a subdivision).\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If selling is the only option, it would be wise to get ahead of the curve. While existing home prices probably will only fall a moderate amount over the next year, new home prices will likely sink substantially more. You don\u2019t want to be caught chasing the market downward while you hold onto inventory. I would recommend leading the market and cutting your price upfront. Offering attractive incentives, such as\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.builderonline.com\/money\/mortgage-finance\/higher-mortgage-rates-push-builders-toward-flexible-and-impactful-incentives-for-buyers_o\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">interest-rate\u00a0<\/span><\/a><span data-preserver-spaces=\"true\">buy-downs (where the builder pays the lender to lower the interest rate for the buyer in the first year or more), should also be something to consider.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Every investor and developer will take hits in this business at some point or another. It\u2019s better to come to terms with that now than try to hold out hope that you can sell at the same price you could have when the typical homeowner was buying with interest rates in the 3% range. To hope the market shifts back to what it was six months ago will likely leave you holding the bag as holding costs eat away any profit you could have made. And after that, you\u2019ll likely have to eventually sell for even less than the discount you could have offered upfront.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">On the other hand, if you are looking to buy a home\u2014particularly one to live in\u2014and are frustrated with this meme being far closer to reality than such a buyer would prefer:<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146195 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 5\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM.webp 1154w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-300x292.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-1024x997.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-768x748.webp 768w\" sizes=\"(max-width: 1154px) 100vw, 1154px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM.png 1154w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-300x292.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-1024x997.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-768x748.png 768w\" sizes=\"(max-width: 1154px) 100vw, 1154px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146195 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 5\" alt=\"Meme about cost of housing in 2021-2022\" height=\"1124\" width=\"1154\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM.png 1154w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-300x292.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-1024x997.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-04-at-12.26.26-PM-768x748.png 768w\" sizes=\"auto, (max-width: 1154px) 100vw, 1154px\"\/><\/source><\/source><\/picture><\/figure>\n<p><span data-preserver-spaces=\"true\">New homes would be something to look into. Particularly look for one\u2019s offering rate buy downs. Either way, you will certainly have the upper hand in negotiations.<\/span><\/p>\n<div class=\"is-layout-flow wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\">\n<div class=\"wp-block-group__inner-container\">\n<div class=\"wp-block-group__inner-container\">\n<h3 class=\"has-text-align-left mt-0\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n<figure class=\"wp-block-image size-large is-resized\"><picture decoding=\"async\" class=\"wp-image-142373 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 6\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.webp 768w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.webp 1380w\" sizes=\"(max-width: 256px) 100vw, 256px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"(max-width: 256px) 100vw, 256px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-142373 sp-no-webp\" title=\"Builders Are Getting Frustrated, And Now They're Doing This 6\" alt=\"Fundrise logo horizontal fullcolor black\" height=\"63\" width=\"256\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"auto, (max-width: 256px) 100vw, 256px\"\/><\/source><\/source><\/picture><\/figure>\n<p class=\"mb-0\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n<p class=\"mt-0 has-slate-600-color has-text-color\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n<p><a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&amp;si=8000000019411002&amp;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" the=\"\" market=\"\" blog=\"\" sponsor=\"\" click=\"\" referrer:=\"\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/builders-are-getting-frustrated-and-now-theyre-doing-this\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article The mixture of (relatively) high interest rates and economic volatility with the fact most homeowners have fixed, low-interest rate debt had induced what real estate economist\u00a0Bill McBride\u00a0refers to as the\u00a0\u201csellers strike.\u201d\u00a0As should be expected on the heels of such stubbornness, developers are beginning a \u201cbuilders strike\u201d to follow suit. As\u00a0CNBC\u00a0reported\u00a0at the end [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":4745,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/01\/home-construction-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-4744","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=4744"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4744\/revisions"}],"predecessor-version":[{"id":4746,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4744\/revisions\/4746"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/4745"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=4744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=4744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=4744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}