Home Sellers are Dropping Prices

• 3 min read
Home Sellers are Dropping Prices

MARKET MOVERS

  • Home sellers are dropping their prices. Data from the online brokerage Redfin shows that 15 percent of home sellers dropped their asking price during the four-week period ending May 1, compared to nine percent of sellers during the same period a year ago. But even though price drops are becoming more common, most homes are still selling above asking price and in record time. Read more here.

  • National average for gasoline hits a record $4.37 a gallon. Prices are unadjusted for inflation. The national average is now $4.37 per gallon, according to AAA. In California, the state average is $5.84. Diesel prices, meantime, are also surging. The national average hit $5.55 per gallon on Tuesday, also a record. The industry is grappling with the same pressures playing out in the rest of the economy, including labor constraints. Read more here.

  • Tesla is slashing Shanghai production as parts shortage hits. The company mostly shut down its Shanghai facility again because it doesn’t have all the parts it needs. Supply-chain problems arising out of China’s latest Covid-19 lockdowns just won’t go away. Tesla delivered just 1,512 vehicles from its Shanghai plant in April down from almost 66,000 in March, and a monthly record of almost 71,000 in December 2021.

  • Goldman Sachs pauses work on new Spacs after SEC takes tougher stance. US regulators want to bring them in line with conventional public listings. And that’s making Spacs less appealing to Wall Street. The SEC wants to introduce liability rules for banks or for underwriters. So if you have someone like Goldman who’s underwriting a Spac IPO, they would also be held liable for the eventual merger and the company that the Spac merges with.

  • Homebuyer sentiment hits another new record low. The percentage of Americans who think it’s a good time to buy a home fell to 19 percent in April, breaking the previous record low of 24 percent seen in March. The current lack of entry-level supply and the rapid uptick in mortgage rates appear to be adversely impacting potential first-time homebuyers in particular. A larger share of 18- to 34-year-olds said it was a bad time to buy a home.

  • Construction costs continue to soar. It experienced the largest spike since 1970. In one year, the year-over-year increase in construction costs was 17.5%. Jason Hartman says that whatever the hard construction costs are, the builder has to add a profit to that. So if their profit margin is around 5-10% then that will also be added to the ultimate final price of a delivered home. Source(14:17)

WHAT TO WATCH

  • Elon thinks he can quintuple Twitter’s revenue in the next six years. He thinks he can double its revenue with subscriptions alone and quintuple in the next six years. His strategy includes cutting reliance on advertising to 45% of total revenue. He wants to add a payments business to the platform. He also plans to drive up Twitter Blue subscriptions while also adding a second subscription called X. Source(8:24)

  • Housing supply is showing signs of improvement. In April, inventory was 12% lower than the year-earlier month, the smallest year-over-year decline since the end of 2019. The shift in supply is likely due to a slower sales pace stemming from the recent rapid increase in mortgage rates, which has made expensive homes even pricier. The number of active listings is still down 67% from pre-pandemic levels.

  • Pfizer to buy Biohaven Pharmaceuticals for $11.6 billion. Under the terms of the Biohaven acquisition, Pfizer will acquire the migraine drug Nurtec ODT, sold in Europe as Vydura. It will also acquire Zavegepant, a similar drug currently under consideration from the Food and Drug Administration to treat migraines, and five preclinical drugs of the same class. Read more here.

  • Cathie Wood’s Ark takes a stake in GM for the first time. The purchase valued at more than $6 million  was through the ARK Autonomous Tech. & Robotics ETF. The purchase comes about a month after Wood said she was keeping an open mind about investing in the Detroit automaker. Wood said she was fascinated by how GM’s CEO and chair is turning the company around and investing in new technologies. Read more here.
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