America Is Richer. So Why Are You Poorer?

You may be following the debate about the economy, on one hand concerns about inflation and the Fed raising rates, on the other side sharing success in raising average wages by over 5%. Which is true?

Well, both, kind of.

It is true that US household income is at an all time high, adjusted for inflation raising 50% over the last 50 years or so.

Also, poverty rates are at a record low, at approximately 10% of the US population, declining from over 23% when statistics were first kept in 1960.

Both those numbers are better than the opposite, but how good are they? Well, a 50% rise, compounded over 50 years, is a real raise of less than 1% per year for 50 years.

Put that way, its about the interest you would get by putting your life’s savings in a checking account at Bank of America. And it gets worse.

The numbers above are the AVERAGE, or, in statistical terms, the MEDIAN. That is taking the total numbers and dividing by the population. But the middle class is doing way worse. I took the US Bureau of Census numbers and recalculated the numbers and the term is the MEAN, which would be the exact middle, with half doing better and half worse. And the MEAN is doing better than the MEDIAN by 45% as the income gains are disproportionately absorbed by the top percentage.

If our economy was more evenly distributed instead of the middle class average being $87,460 it would be $126,700. When one talks about the middle class being squeezed, that is the number that identifies it.

And it's getting worse. The variance was 22% IN 1985 but has doubled to 45% in 2025.

And if you look at the data, the difference in gaining in speed in its disparity.

How does that manifest in our society? We end up with haves and have nots. In the city of Los Angeles, we have some of the wealthiest neighborhoods in the world surrounded by homeless encampments. A startling map I was recently was the map defining the service areas of Waymo, my favorite ride-sharing company featuring driverless technology.

If you look at the map they service the city primarily North of the 10 freeway between the ocean and the 110 freeway. Think about other industries that overlay the same area. How many good restaurants? Clubs? What are the schools like in the two different areas defined. And if Waymo won’t drive their cars there, does that explain why many people will not move into those areas even though the housing is much less expensive.

The problem called “housing affordability” is really the destruction of the middle class which, for the most part, cannot afford to buy a house and raise their family with one income as was done for the majority of this country’s history, and instead our population is being deceived into settling for renting or accepting substandard housing. The solution is to focus on what raises the economic tides for the majority of Americans, and then more people will be able to afford buying a home.

Let's take a look at the news from this week.

My weekly overview of the housing market always starts with a look at the key demand and supply factors fundamental in any economy. The driver of demand is interest rates, and supply is measured by the homes for sale.

Mortgage rates closed over the 7% rate again this week, closing up another ⅛% of rate at 7.20 from 7.08 last week.

On the supply side, inventory grew in July to exceed last year's rate by about 3% or almost 22,000 more homes for sale.

By historical standards, while inventory has increased, it is higher than any COVID year and lower than any pre-COVID year. As long as inventory remains at these levels housing prices CANNOT substantially decrease nationally, and create pressure for more home building.

All real estate markets are locally driven. While there is news nationally, our market is affected by local events and factors. In Los Angeles, our market continues to be slightly favoring sellers closed again at 35 according to Altos Market Data.

With inventory in Los Angeles growing and price per square foot dropping, this market is finally moving towards a balanced market for buyers just as the interest rates are dropping, making this the best opportunity for buyers in almost a decade.

So, in the news this week…

The Compass CEO Robert Refkin continues his propaganda war against EVERY other competitor, this week in his “Corr Values” post making a case that “agents should be able to share listings with other agents and their buyers without being forced to hand client and listing data to portals and AI companies.” Sounds noble, and, in fact, is the current state of service in our industry. My MLS, the Combined Los Angeles Westside MLS or CLAW, allows a slew of customization on how listings are marketing and only requires that any deviation be approved by the client in writing.

This graphic is very small, so here is a video that shows it in better detail.

Watch detail video: https://www.awesomescreenshot.com/video/56657297?key=b0f876b99389d3ce8a486e4fdfe86763

What you will see is that I have all kinds of choices on how to market the property, including if I want it on the internet at all, if I want to display the street number and name, allow automated valuation models, whether or not to put it into ListHub which syndicates the data to websites like Zillow and Redfin, Homes.com, Realtor.com, and I can even write different remarks for the online version of the listing than in the MLS.

The whole idea that Compass is needed to give our clients and agents choice is propaganda to hide their real motive, to be the ONLY MLS in the country and thus drive more buyers into using them based on the lack of proper information and to fool sellers that their performance is better than it really is based on data.

Another of his posts was “Learn from Reality.”

It is surprising advice from a company that prevents their sellers from getting actual market data while they hid the listing in order to double end it and make a higher commission. Once a property is listed, there are lots of metrics to observe to tell how the market is responding, from clicks, saves, shares, etc. Hiding the listing to only show to a selected party not only limits the buyer pool but also deprives the agent from REAL market data with which to assess what is going on with the listing. I would suggest Mr. Refkin takes his own advice and learns from reality instead of playing around with other people’s assets.

How do you think Karen Bass is doing in fighting homelessness? Well, she graded herself a B+

I am just going to say, what do you think?

Are you wondering when the city will help families that lost their homes due to fires? Well, it will be a longer wait than we expected, with news last week that half, or $5 million of the original $10 million set aside for fire victims is being used to pay for rent for migrant households that claim hardships due to ICE.

Translation: taxpayer dollars collected on the basis of helping other taxpayers is instead being given to illegal aliens who do not want to follow federal immigration laws.

Redfin tries to scare the market and hides the most telling statistics. Their headline screams that buyers are being pushed out of the market.

And, yet, in the article, they hide that 25.5% of homes sold went for over their asking price, up from last year. That obviously shows a competitive market for the homes that are on the market and motivated buyers getting them.

Robert Refkin, chief of company propaganda for Compass, provides another example of their propaganda, with his post emphasizing the importance of moving fast.

I agree that speed is a critical advantage in business. However, I think he needs to explain how hiding his customer's listings off market for 3 weeks or more BEFORE putting on the MLS accomplishes the speed to market advantage when, to me, it seems like he is surrendering it.

So, what should YOU do about buying or selling real estate in today's market?

If you want to move or downsize, it's still a great market to sell, but a bit more challenging than in the last few years.

Finally, if you can find a property that will give you cash flow, this is a great time to get solid cash flow and enjoy the tax benefits of real estate.

How can I help you? Call, text, or email me.

Schedule Consultation All posts