The Fog of War
In the middle of March, 2020 a couple friends who were 40 years old and in the middle of buying a home reached out to me. What should they do? We were at peak uncertainty with COVID-19 lockdown underway. The stock market had crashed, and the big fiscal stimulus programs weren’t obvious yet. Nobody knew what would happen, but I told them household balance sheets were in good shape, mortgage underwriting had been incredibly conservative over the past decade, affordability was reasonable, mortgage rates were low, and there was pent-up demand from Millennials hitting their family-forming years. Maybe home prices would go down for a bit but they had their families to think about – I’d go ahead and buy.
We joke about that moment now, because none of us imagined home prices would surge over the next two years and the housing market would end up where it did. We were all just doing the best we could at a noisy and scary time. I’ve spent my career making sense of the housing market so that people can make informed decisions rather than panic. The Housing Frame represents my belief that there’s more need for that than ever in an emotional, cluttered media environment.
How I came to love housing
Growing up in the northeast – I spent half my childhood in suburban Washington, DC, and the other half in suburban Boston – a house was just a pile of sticks and bricks to me, somewhere to live. I then moved to Southern California for college – the part of the region where Los Angeles ends and the Inland Empire begins. Watching new development sprout up in places like Ontario, Fontana, and Rancho Cucamonga in the early 2000s I began to understand how a housing boom changes the emotional temperature of a place, creating both excitement and at times a sense of unease.
After graduating I moved to the San Francisco Bay Area, first for a brief stint in tech before landing at a large hedge fund in downtown San Francisco. Looking out at sunrises over the Bay Bridge with views of the Ferry Building, I figured my Inland Empire drives along Foothill Boulevard in search of fast food and donuts (shout out to Donut Man) while housing subdivisions sprouted up all around were a distant memory, something that would have no professional value in my new life with a Bloomberg Terminal and spreadsheets.
My job at the firm was risk management, and the pivotal moment for me was when our financials analyst came back from a conference in the summer of 2006 and said the subprime mortgage situation seemed concerning. We didn’t have credit experts at the firm, and I got drafted into helping out. That led to phone calls with Greg Lippmann at Deutsche Bank – the guy who Ryan Gosling’s character in the Big Short was loosely based on – and two years of tracking the subprime deterioration, coming up with housing-related trading ideas, and managing the risks associated with the spillovers into the broader financial system and economy.
Seeing the monthly deterioration in portfolios of mortgages every month in 2007 based in Florida, Nevada, Arizona, and the Inland Empire made it personal to me. On one level they were numbers in a spreadsheet, assets in a portfolio, risks to manage. But on another these were real places I felt a connection to and real people who had been excited to get into a home with a seemingly-attractive monthly payment who had seen their homes surge in value over the past few years, only to watch it all unravel.
Those years were exhilarating but generated a lot of emotional baggage, and by 2010 I was looking for a fresh start. I chose Atlanta because it was closer to my family on the East Coast, I felt like smartphones and the mobile internet would make knowledge jobs easier to find and do outside of the traditional coastal hubs, and of course because housing was much cheaper.
Since moving here I’ve learned that the housing market in Atlanta and other similar Sun Belt hubs function as relief valves when housing in New York and California gets scarce and expensive. Nosebleed rents in Manhattan become an opportunity for apartment developers in Midtown Atlanta.
This journey around the country, formative experience with the mortgage market during its crisis, and years of writing about housing and the economy for Bloomberg Opinion have now led me to launch the Housing Frame. Housing is people, it’s places, it’s feelings, it’s data, and it’s numbers in a spreadsheet – everything matters.
Why the Housing Frame?
Housing data is much easier to find than it used to be. A variety of data is on the FRED website. Lance Lambert of ResiClub, a housing analytics site, has created the ResiClub Terminal, a powerful tool for deep dives into local and regional housing market data. Artificial intelligence over time will likely lead to new ways of getting housing data.
What’s missing are ways of helping people make sense of the data, what it means beyond the narrow scope of any single data report, and how people should think about it as they make economic or housing-related decisions. Any big theme reshaping the economy – artificial intelligence, inflation, supply chain bottlenecks, immigration – usually has a housing market angle. The Housing Frame is about having a broad lens on the economy, finding the housing angle, and identifying what’s noise and what’s signal.
Why subscribe?
Free subscribers will receive:
A weekly podcast/essay focused on important dynamics or inflection points related to housing
Paid subscribers will receive:
Weekly subscriber-only analysis with charts and data geared towards industry professionals, investors, and junkies who want to go deeper than the headline numbers
Rapid reactions to news and events shaping housing — breaking news, unexpected market moves, important tidbits from corporate earnings reports, Federal Reserve policy actions
Let’s chat! Something I’ve loved about housing over the years is how lowercase-d democratic it is. Whether you’re a real estate agent, mortgage originator, work for a homebuilder, or are a homeowner, and whether you’re in Boise, Buffalo, or Birmingham, you have something to contribute to housing discourse. I’d love this space to become a community for constructive discussion.
I’ve been analyzing and writing about housing for the past 20 years and hope to be doing it for another 20. I’d love to have your support. Thanks!
Conor