JPMorgan's $750B Bet on the Housing Market

Henry Washington (0:05)

What's going on, everybody, Henry Washington here, and happy Labor Day. I hope you're all doing something super fun. On the feed today, we're sharing an episode of our sister podcast, On the Market, that was originally published on August 20th. James Daynard, Cathy Fettke and I broke down a few big recent real estate news stories. We covered JPMorgan's announcement that they're investing 750 billion, that's a billion with a B, into the housing market, and also talked about whether the market has already peaked for 2026 and whether the latest inflation report could stop the Fed from raising interest rates. We'll be back with a brand new episode of the BiggerPockets Podcast in just a couple of days. Here's that conversation with me, James and Cathy.

James Daynard (0:46)

So let's just jump right in. Henry, what do you got today?

Henry Washington (0:49)

Well, I picked a story that was very near and dear to my heart, top of mind, something I am always thinking about. The headline is, The market may have already peaked for 2026 and the summer isn't even over yet. This is an article I found on usnews.com and it's talking about what's happening in the real estate market in terms of sales. So the article goes on to talk about that existing home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million. Even as the median home prices have climbed to a record for the month, the national median existing home price rose 2% year over year. That's up to $434,000 in July, making that the 37th consecutive month of annual price gains. So housing prices have gone up and the market seems to have already peaked in terms of sales price. And now that we haven't finished summer yet, but we're moving into what would normally be a winter slowdown anyway, could be just a not pretty time in terms of real estate sales in the country. And as I was researching this article, I came across another article that talked about how first home purchase sales are down, but luxury home sales are up. And I think all of this is tied to affordability, interest rates peaked over the last month, and that's caused a slowdown in the market for people who are just barely priced into the market. But there's also a lot of people who have made a lot of money or are making a lot of money in stock market gains.

And so the wealth gap is pretty substantial. And so the people who have more money are buying more luxury homes. And in my market, I'm seeing exactly that.

And why do I know that? Because I'm trying to sell my house right now, my personal house. And every house in my neighborhood, in the luxury market, when it goes up for sale, it is under contract in less than 30 days. But when I'm selling my flips, I am seeing longer times on market. It's a little harder to sell them. There's more competition. And so I think all this just plays into affordability. But I was very curious, James, is that the same thing you're seeing in your market? Your market is substantially more expensive than mine, but you're doing deals consistently.

James Daynard (3:23)

Yeah, it's flat. Things are sitting on market. I mean, it depends on what it is. There's velocity in every city.

So I think one of the most important things that we've been going over the last 90 days is where's the velocity at in every zip code. Because it doesn't matter if it's luxurious or it's a first-time home buyer, there's a price point that's moving in that pocket. Not everything is not selling, but there's a lot of things that aren't moving. So we're really locking down by zip codes, price points, where's the velocity, and that's what we're really targeting. For example, in North Seattle, if you have a house that's 1.5 million and it's a good street, that is selling and it's going to sell in the first weekend. If you're 1.7 million not selling, your market times are going to 100 days. So you really got to look at every type of price point. It's kind of looking 10% blocks and then focus on that because it tells you where to be aggressive and not to be aggressive. I mean, it's not enjoyable in the summer when you're sitting on, I think I got like 18 for sale. I would say I'm taking off two to three a month. But one thing I do want to stress is this was no different last summer. Last summer was terrible.

And so what I'm hoping is we actually did see a little bit of uptick in momentum the last two weeks. I think we sold five new construction of ours, like a little bit more starter units. I sold a couple of different flips.