What I’m Watching Closely This Year

Sentiment: Rates matter. Confidence matters more. I’ve been saying this all year as we navigate economic and administration changes that have had some effect but not to the largest culprit: consumer sentiment. Buyers and sellers still respond emotionally. They’re waiting for clarity, permission, or a “signal” that things are safe again. Mortgage applications are increasing but buyers are just sitting at the door waiting to step in. Once sentiment shifts, movement will follow…quickly. 

Inventory Velocity: There’s been a shift in pricing as stagnant home price appreciation last year didn’t lead to more sales, it led to which sold and which didn’t. How quickly homes’ go under contract—especially within specific price ranges and neighborhoods—will matter more than construction costs. Stale listings don’t mean buyers disappeared, they mean pricing missed the market. Ignore rising inventory in the headlines—velocity tells the truth. 

The Lock-in Effect Dissipates: We’re still living in a post-pandemic world. Nearly half of homeowner still sit on mortgages under 4%. That dam won’t break all at once—but even small leaks matter. Look, lifestyle moves, job changes, and family growth don’t wait forever. When sellers decide the trade-off is worth it, supply will appear in clusters!

Construction Capacity + Costs: The news loves to cover costs. What I’m watching is capacity—the real constraint. Labor availability, permitting timelines, and material predictability will shape what actually gets built—not demand alone. Projects penciled today will look very different under prolonged uncertainty. I know this well, as an owner of a construction company and investor in numerous real estate projects; my foot has been loudest on the brakes this year than any other. 

Rates: Rates remain the most misunderstood and politicized stories in real estate. The Fed prefers to live a quiet life—adjusting just enough that we ignore they exist and the economy keeps chugging on. But recent economic turmoil and over or too little inflation adjustments have been a hot topic. Can the Federal Reserve’s all-powerful lever remain independent and can it change the economy? My thought: last year exposed the flaw in the thinking that raising rates = slow the economy whereas cut rates = restart housing. The Fed can influence short-term borrowing but it doesn’t control the outcome. Even as the Fed cut rates late last year, mortgage rates barely moved. The yield spread between what banks borrow at and what consumers pay widened. Like by a historic spread. Translation: the Fed eased, but housing didn’t feel it. With a new Fed chair coming this spring, questions on the Fed’ independence might be tested. Instead, what I’m watching, isn’t what the Fed does—but whether the market listens. Because in my opinion, the next move in housing won’t come from a podium.