Gooood morning readers! I'm Phil Rosen. On tap today we've got a great interview with a top real estate economist and this week's best markets stories, including updates on the Silicon Valley Bank meltdown.
Before we get to that — who do you think I should speak to next?
I love reading your suggestions every week — tweet me @philrosenn or email me at prosen@insider.com with your best recs for my next Q and A.
Now, let's get to today's conversation.
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Nadia Evangelou
Nadia Evangelou is senior economist and director of real estate research at the National Association of Realtors.
This conversation has been lightly edited for length and clarity.
Phil Rosen: You don't anticipate a housing crash this year. What's behind that forecast?
Nadia Evangelou: What we see in the data is that the housing market will likely pick up in the coming months, in the spring season.
One very important indicator is the pending home sales index, which just rose significantly for the second straight month.
And we actually expect inflation to ease faster than expectations in the second half of this year, which could bring mortgage rates down to the lower range of 6%. So we expect home sales to pick up and the housing market to perform better.
In your view, what's keeping home prices from crashing, which some Wall Street firms have forecasted?
NE: It seems that homesales activity has bottomed out, and 2023 will be the turning point for the housing market.
But what we do have in mind is that the US is suffering from a severe housing shortage. Back in 2008, we had an oversupply of homes by like 4 million, but now we have less than 1 million. This is the main factor that keeps home prices from falling.
Due to low inventory, even though there are relatively few buyers on the market, housing demand continues to outpace housing supply.
What about home sales activity?
NE: Our forecast is that even though activity will pick up in the next months, we still expect fewer homes to be sold in 2023 compared to 2022, up to 11% drop in home sales activity.
But in 2024 we expect a rebound — home sales activity can increase about 18%.
We expect 4.5 million homes to be sold in 2023, and about 5.3 million homes to be sold in 2024.
Read the full story from our conversation.
What do you think of Evangelou's housing rebound forecast? Tweet me @philrosenn, or email me prosen@insider.com.
And here are the top stories from markets this week:
Reuters
1. Regulators shut down Silicon Valley Bank on Friday. Turmoil at the tech-focused bank dragged the wider bank sector lower and left venture capitalists scrambling. Read Insider's rundown of what happened.
2. Banking rivals of Silicon Valley Bank are looking to capitalize on the tumult. As Insider senior correspondent Ben Bergman reports, other financial firms have moved to publicly encourage tech clients to move their money. But behind the scenes, some bankers have been told not to poach SVB clients: "We can't afford for them to fail."
3. Nobel-winning economist Paul Krugman is still baffled by the economy. He said he couldn't get a good read on this week's labor data, since it was difficult to tell whether the job market was cooling down or not. He doubts the Fed's next move matters much.
4. FTX's lawyers and advisers cost $38 million for a month of work. Court records cited by CoinDesk revealed the steep cost that the hundreds of legal staffers billed to start the year. The exchange's new CEO, John Ray III, submitted his own bill for $305,565 for the month of February.
5. This 27-year-old real-estate investor bought three homes and flipped them for profit. John Crenshaw shared before-and-after photos of properties he fixed up in Austin, Texas. He explained how much he made on each house — including one that only cost $65,000.
6. It's time to be cautious on Big Tech stocks even though the Nasdaq has outperformed the S&P 500 this year. DataTrek Research pointed out that, historically, the Nasdaq sees declines after it outperforms the latter index over a 50 day stretch by five points or more. Get the full details.
7. Goldman Sachs said Apple stock will soar more than 30% over the next year. The market is currently underestimating the strength and stickiness of the Apple ecosystem — and that's what compelled the bank to recommend the tech name for the first time in nearly six years.
8. Silicon Valley Bank's troubles could be the sign of a new financial crisis. At least that's what experts including "Big Short" investor Michael Burry, Bill Ackman, Ryan Cohen, and Mohamed El-Erian suggest. See what the top commentators have said over the last 48 hours.
9. Morgan Stanley recommended investing in this batch of tech stocks right now. With these names, the strategists said you could protect your portfolio from disappointing earnings and a coming market downturn. See the list of 16 stocks.
10. Wall Street firms have shared their best bets for the artificial intelligence sector. The red-hot industry could add trillions in economic impact over the coming years — and here's what top strategists recommend for investors looking for a piece of the pie.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com
Edited by Max Adams (@maxradams) in New York.