Marketplace: All These Sellers, But Where Are the Buyers?
Host: Marketplace
Release Date: February 17, 2025
Housing Market Hits a Snag: High Prices and Low Demand
The housing market, a significant component of the U.S. economy accounting for roughly 16%, has shown signs of weakness despite the overall economic resilience. Amy Scott opens the discussion with Samantha Fields, highlighting a recent Redfin report that indicates an increase in housing supply not seen in the past five years. However, this surge in inventory hasn't translated into higher demand.
Samantha Fields notes, “[Buyers] were certainly moving very cautiously in January” (02:29), citing Lisa Sturtevan of Wright MLS who attributes this slowdown primarily to persistently high mortgage rates. Fields elaborates, “Many of them were expecting mortgage rates to come down after the Fed cut interest rates last year; instead, they ticked up” (02:37).
The emotional landscape surrounding economic uncertainty plays a crucial role, as explained by Fields: “There’s a lot of psychology and emotion that goes into home buying” (02:50). Benga Adjalouri from the Center on Budget and Policy Priorities emphasizes the impact of job security fears on purchasing big-ticket items like homes: “You’re not going to buy a house if you’re worried about a job” (03:06).
Darrell Fairweather of Redfin underscores the necessity of improved affordability for buyers to engage actively: “[Interest rates] come down even half a point, she thinks buyers will come off the sidelines” (03:43). The consensus among experts suggests that unless mortgage rates become more favorable, the housing market may continue to experience subdued demand.
Rising Global Electricity Demand Amid Economic Shifts
Transitioning from real estate, Elizabeth Troval explores the surging global demand for electricity, a trend highlighted by the International Energy Agency (IEA). The IEA predicts a 4% annual growth in electricity consumption through 2027, effectively adding more energy demand equivalent to Japan each year (04:22).
In developed economies, electricity use had plateaued or declined over the past decade, but the landscape is changing. “In 2024, that changed,” Troval reports, referencing Todd Moss from the Energy for Growth Hub. The increase is driven by expanding data centers and the rise of electric vehicles (EVs), particularly in advanced economies like the U.S.
Gautam Jain from Colombia adds, “Most of the energy investment and infrastructure is going to be in Asia, Africa, Middle East, China, Southeast Asia, and South Asia” (04:55). These regions are experiencing rapid economic growth and an expanding middle class, fuelling the demand for energy-intensive technologies.
Aaron Chaum of the IEA comments on the environmental implications: “To meet additional demand for electricity, countries are turning to renewables and nuclear energy,” (05:22) aiming to stabilize global CO2 emissions growth. This strategic pivot is crucial in addressing climate change while accommodating increasing energy needs.
College Closures: A Small-Town Crisis
The episode delves into the troubling trend of college closures across the United States, with Karen Fisher from the Chronicle of Higher Education providing an in-depth look. The closure of Wells College in Aurora, New York, serves as a poignant example of the broader crisis affecting small towns nationwide.
Dell Technologies recounts the unexpected announcement: “Wells just announced that it was closing. It took everybody by real surprise” (07:40). The immediate fallout from such closures extends beyond the educational realm, crippling local economies and essential services. The college, being the town’s largest employer and a key provider of services like the water treatment facility and community health center, left Aurora grappling with significant operational voids (08:36).
Fisher explores potential solutions, suggesting enhanced collaboration between colleges and communities to mitigate the impact of closures. “Are there ways that communities and colleges can work together more effectively to stave off some of these closures?” she asks (10:25). However, she acknowledges the complexity of the issue, noting that there is no simple fix to ensure financial stability for these institutions.
Aging in Place: Navigating Accessibility and Affordability
In the “Adventures in Housing” segment, Samantha Fields introduces Kirsten Harrison's story from Golden Valley, Minnesota, highlighting the challenges and triumphs of aging in place. Harrison shares her experience of moving into a senior cooperative, emphasizing the community-oriented and supportive environment it fosters.
“We are in a two-bedroom unit, and our carrying costs are less than $1,500 a month, which includes cable, Internet, everything” (12:18). The cooperative model provides residents with amenities such as a solarium, guest rooms, and communal activity spaces, creating a sense of family and belonging. However, Harrison also points out the limitations, such as the absence of in-unit washers and dryers, although this hasn’t been a major issue for her family.
The segment underscores the importance of accessible and affordable housing options for the aging population, with 75% of older adults expressing a desire to remain in their homes as they age. Yet, 44% fear they won’t be able to do so due to various barriers, including financial constraints and accessibility challenges.
Retail's Changing Landscape: The Closure of a Typewriter Shop
Sarah Leeson takes listeners to Arlington, Massachusetts, to witness the closure of Cambridge Typewriter, a beloved repair and retail shop operating for 57 years. The store's owner, Tom Furrier, shares his emotional farewell as he prepares to retire: “I’m not putting off retirement anymore. We’re just going to have to close the shop” (26:06).
Despite a steady flow of customers driven by a renewed interest in vintage typewriters, Furrier struggled to find a buyer to take over the business. The shop, which sees a mix of nostalgic enthusiasts and younger generations intrigued by retro aesthetics, represents the broader challenges faced by niche retail establishments in a digital age.
Customers like Maggie Caldwell and Charles Gilroy illustrate the diverse clientele that frequented the store. Caldwell seeks a typewriter for personal use, while Gilroy, diagnosed with Parkinson’s, relies on typewriters as an accessible tool for his daily needs. Furrier reflects, “The best part of my day is when I get to leave my workbench, come out here and geek out over typewriters with someone that I just met” (28:10), highlighting the community and passion that sustain such businesses.
Government Challenges: Potential IRS Layoffs and Data Security Concerns
In the final segment, Amy Scott touches on the looming threat of layoffs at the IRS amidst efforts by Elon Musk and his Department of Government Efficiency to streamline federal operations. Reports indicate that Musk’s team is attempting to access sensitive IRS systems containing detailed financial information of taxpayers, businesses, and nonprofits.
A federal judge has expressed intent to rule swiftly on a lawsuit aiming to block Doge’s access to information systems at seven other federal agencies. This development raises significant concerns about data security and the integrity of federal financial information management.
Looking Ahead: Upcoming Housing Data and Market Indicators
As the episode wraps up, the host previews the crucial housing data releases anticipated in the coming week. The Home Builder Confidence Index and January's housing starts and building permits are expected to show declines, potentially further highlighting the sluggishness in the housing market. Additionally, retail sales data from the Census Bureau indicates a notable downturn in furniture and home furnishing store sales, falling 10% from December, nearly double the decline in overall retail sales (16:35).
Conclusion
This episode of Marketplace effectively navigates through the complexities of the current housing market, rising global electricity demand, the socioeconomic impact of college closures, challenges in aging in place, shifts in the retail landscape, and governmental data security issues. Through insightful interviews and detailed reporting, listeners gain a comprehensive understanding of the multifaceted economic and social factors shaping today’s landscape.
Notable Quotes
- Lisa Sturtevan, Wright MLS: “Have just remained much higher than maybe” (02:35)
- Benga Adjalouri, Center on Budget and Policy Priorities: “Imagine you work for a federal agency and you're suddenly wondering how long that'll be true” (03:06)
- Darrell Fairweather, Redfin: “With this housing market for a long time now, what people have been hoping for has been an improvement in affordability” (03:38)
- Kirsten Harrison, Golden Valley, MN: “For people who can afford it, you can age in place” (12:18)
- Tom Furrier, Cambridge Typewriter: “We’re just going to have to close the shop and people will have to, you know, find other means” (26:06)
For more in-depth stories and updates, visit Marketplace.org.