?? Chin up, neighbor

Hey homeowners! Welcome back to?HomeSweet??- where homeowners get their news. We will give you the tools, resources, insights, and memes to both build wealth and build a better life at home. If?President?Powell provides the huge block of solid ice, we're here to help you carve it into a beautiful and detailed sculpture. OK, let's get it!?

The Blueprint???

• ?Front Porch News:?Luxury home sales down bad. Fed does what it said it would do.
• ?Weekend Warrior:?Royal bathroom curtains.
• ?Shower Thought:?What's up with rent?
• ?The Toolshed:?Rent out your room or even your garage!
• ?Meme Menu:?Tapping into the homeownership g*d knowledge.

Front Porch News???

'Crickets' from luxury home sales?(WSJ).?Damn, 2020/21 were the good ole days, no? Normal housing rates and everything going up and to the right. Well, the high-end market has finally started to hiccup as buyers wrap their heads around unforgiving 40y-high inflation, recession fears, and a Fed flailing to figure it all out. As we head into Q4, these niche corrections will become more mainstream.

• Chloe?Says: We believe that, in general, the first price corrections will occur in (a) higher-end homes of ~$1 million+ and/or (b) in the western US, like California, Arizona, Seattle, and the like. Just the other day, a home in SF's Hayes Valley was?marked down 30%?from a July listing of $1.4 million (now $1.0 million).?We're just getting started, baby.?Then, over time, the corrections will bleed into other geographies with less-inflated valuations. Remember: real estate is more?overpriced?now than it was in 2007! Reach out with any questions about your area???
• Chloe?Action: If you are NOT looking for a luxury home, wait it out for 3-6 months. If you are looking for a luxury home (and really want it?now), then your timetable probably has moved up; the best deals are likely to happen between now and New Years. Trying to sell? Sell now, if you can, to a desperate buyer (such buyers exist in every market, as you never know what is happening in someone's life).

Fed predictably raises rates?(Yahoo,?Reuters).?Chairmen Powell lifted rates by 75 basis points last week (aka 0.75%). No surprises there. In line with this news came further elevated construction costs, dampened homebuilder sentiment, less applications for building permits, and the seventh straight month of cooling home sales. That last piece, again, has not happened since 2007.

• Chloe?Says: The latest Fed meeting and the resulting news is a good reminder just how much the central bank matters in all things housing.?Sheesh!?Furthermore, regarding housing, Powell literally said "we need to go through a correction to get back to that place." At Chloe, we are pretty sensitive to political spin (the almighty "spin zone"), so to hear explicit words like these from one of the most important people on earth, we somewhat sigh with relief.
• Chloe?Action: If you 100% buying a home right now, at least shop around for the best mortgage (after?you've identified a price correction of some kind!). If you already own a home purchased at non-peak levels, now is great time to tap your?home equity?since rates are not coming down any time soon; for older folks, this is even more important since people today live longer and thus need more money for retirement. Get in touch with us for the best HELOC options and more.

Weekend Warrior?????

We got another inexpensive afternoon project for you all:?

• Use ceiling-to-floor shower curtains for tiny bathrooms. Skip any sort of carpets or rugs in an already small bathroom. The extra "furniture" will make your already small bathroom feel downright claustrophobic. Avoid this and remember: space = grace.

Shower Thought????

Well, people are paying way too much in rent right now (see below). It's not just SF and New York.

The rent rule of thumb is to stay at or under 30% of your pre-tax income. So if you make $100k, then you should spend $2.5k max per month ($100k * 30% / 12). The chart above says that about half of Americans are not doing that. Couple this with climbing consumer debt (think credit cards) and all of the other?$%^&?going on, and you have a potential disaster ahead. What would this mean? No crystal ball here... BUT if you did pass us the ball and told us to give it a shot, we'd say: a nontrivial amount of forced home-selling may occur in the next 2-3 quarters (yes, starting in Q4, which begins in less than a week). On the rent side, landlords could soon see delinquent tenants and evictions while pinched renters may need to seek cheaper housing/cities.?

Looking at the recent news of?FedEx?stock tanking and?Google?letting employees go, we are ever vigilant. Unlike unemployment (which is a lagging economic indicator), we think too many people will sleep on these other albeit smaller-seeming?leading?indicators.?

The Toolshed ??

Two things we found this week that will make your life better as a homeowner:

• Neighbor?helps homeowners earn an extra $100-$400/month by renting out their garage. Click?here.
• Belong?helps homeowners rent their home or individual rooms.?Click?here.

Meme Menu ??

Thanks for coming through. See you next week!?

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Eyal,?Ben, and?Aaron??

Last thing before you go... what's?Chloe??

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DISCLAIMER:?None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.