Marketplace - All these sellers, but where are the buyers?

Episode Date: February 17, 2025

Tons of sellers listed their homes in January, after months of waiting in vain for mortgage rates to fall. But many would-be buyers are facing economic uncertainty and aren’t ready to make an offer. Plus: A FEMA rule forces residents of flood-prone areas to make a difficult decision, developing countries will drive global energy demand in the next few years and when colleges close, local communities suffer.

Did you know housing makes up roughly 16% of the U.S. economy? We're going to talk about it from American Public Media. This is Marketplace. In Baltimore, I'm Amy Scott in for Kai Rizdal. It's Monday, February 17th. Good to have you with us. One of the weaker pillars of this relatively strong economy has been the housing market, with the combination of high prices and interest rates, plus a low supply of homes for sale. But that last part, supply, has been picking up lately. A new report from Redfin says there are more homes for sale now than there have been at

any other point in the last five years. Demand for homes, though, is the lowest it's been since then. Marketplace's Samantha Fields looks into what's keeping would-be buyers on the sidelines. It has been a slow start to 2025 for the housing market. There's a lot of pent up demand out there, but buyers were certainly moving very cautiously in January. Lisa Sturtevant at Bright MLS says there are a couple of reasons for that. The most obvious is that mortgage rates have just remained much higher than maybe some prospective home buyers were hoping. Many of them were expecting mortgage rates to come down after the Fed cut interest rates last year.

Instead, they ticked up. But I think the biggest is really people feeling a little bit uncertain about the overall economy. There's a lot of psychology and emotion that goes into home buying. And we know that when consumer confidence falls, we also see the housing market soften. And consumer confidence has been falling.

Right now, to put it simply, we're going through a chaotic period of time. Benga Agilori at the Center on Budget and Policy Priorities says, imagine you work for a federal agency and you're suddenly wondering how long that'll be true. You're not going to buy a house if you're worried about a job, if you don't know where your next paycheck is going to come from. You can't make big purchases, thinking about long-term future when your short-term future looks very uncertain. Ultimately, though, Darryl Fairweather at Redfin

says with this housing market for a long time now... What people have been hoping for has been an improvement in affordability, and we haven't seen that. If there are improvements, namely if interest rates come down, even half a point, she thinks buyers will come off the sidelines, economic uncertainty and all. I'm Samantha Fields for Marketplace. Demand for housing may be down, but demand for electricity is headed up both in the U.S. and around the world. A new report from the International Energy Agency predicts global demand will grow by about 4% a year through

2027. That's like adding more than the equivalent of Japan to global electricity consumption every year for each of the next three years. Marketplace's Elizabeth Troval has that one. In some rich countries, electricity consumption has remained relatively flat or declined in the last 15 years, but in 2024 that changed. And in the next three years, the IEA expects many advanced economies, including the U.S., to see growth in electricity demand driven in part by data centers and EVs, but it's emerging economies that will be responsible

for 85% of the growth in global electricity demand in the next three years, according to the report. Todd Moss is with the Think Tank Energy for Growth Hub. We're talking about orders of magnitude differences in developing countries. And so most of the energy investment and infrastructure is going to be in Asia, Africa, Middle East. China, Southeast Asia and South Asia

are some of the major drivers of demand growth, says Columbia's Gautam Jain. All these countries are obviously growing and the middle class is growing. And these are countries that are actually much more exposed to climate change. He says in countries around the equator, including India and Indonesia, days above 95 degrees Fahrenheit are more frequent.

So there's a need for more air conditioning. To meet additional demand for electricity, countries are turning to renewables and nuclear energy, says the IEA's Aaron Cham. Basically stabilizing the global emissions growth. He found that CO2 emissions associated with electricity generation will roughly plateau in the next three years. I'm Elizabeth Troval for Marketplace. US markets were closed for Presidents Day.

We'll have details when we do the numbers. KS – Fewer people are going to college in this country than a decade ago. And with fewer students paying tuition, some colleges are having a hard time staying afloat. Karen Fisher is a senior writer at The Chronicle of Higher Education, where she wrote about what happens to a small town when its college closes. Karen, thanks for being here. Thanks for having me. I was kind of stunned by that number. An average of one college closed every week last year. What is causing this situation? It was kind of a perfect storm of things. It's the combo of the declining demographics and,

you know, there was COVID relief funding that was keeping a lot of colleges going through the pandemic. And that's all dried up and disappeared. And we just have a lot of colleges. So the competition for students is pretty great. And so a lot of colleges have been kind of in precarious financial states for a while.

And this is just a sort of a tipping point for a number of them, unfortunately. So you spent some time reporting in a town called Aurora, New York, where it's small college Wells College closed. Can you talk about what happened to Wells and what it's meant for the community? Sure. Wells, like many of these other colleges, had been having some financial troubles for a long time. It actually, it's a liberal arts college or was a liberal arts college and it was a women's college and it had gone coed in part to try to sustain itself. But then

this spring or last spring in April, it just announced that it was closing and it took everybody by surprise. The students had already registered for classes, the faculty members signed their contracts, and they took the community by real surprise as well. The college had just as recently as a few months earlier assured them that their financial health was fine. And they just had never really contemplated, I think the community members, what it would be like not to have this college in the center of their town. Yeah, and you talk about the, not only the economic impact, this is the town's

largest employer, but also the effect on just basic services in the community? Sure, I mean, you know, colleges and medical centers, they're anchor communities, I mean, they do have this great economic impact. They create jobs, they buy things in the communities. But they also, and many of these towns have grown up around the college, and so they're very interconnected. In Wells' case, the college actually ran the water treatment facility. And so all of a sudden, the town just didn't even know how it was going to continue to go on, you know, and have safe drinking water for its residents. But there's also other ways. I mean, I think the people think of these places very much as, you know, they're cultural magnets, they are points of pride, they

can be community gathering places, and all of a sudden that was lost to this town. Right. And the health center is hanging in the balance as well. Yeah. So Wells is a very small college. And so years ago, in fact, had sort of merged its college infirmary with the community health center in town. And so they used the college's bold infirmary space and it was sort of a win-win. It, you know, gave the college, you know, on space and it was sort of a win-win. It gave the college on-site medical providers, but it also served as the only community health center for about 15

miles, which in New York in the winter is not insignificant. And because the college housed the community health center, now with the college campus, it's a future uncertain. So is the future of the community health center. And you write that this is not just limited to this town of Aurora that's happening in small towns around the country. What kinds of solutions do you see to this problem of towns losing their economic lifeblood really in some cases. I mean, I think there's questions about what can you do ahead of time? Are there ways that communities and colleges can work together more effectively in ways that maybe perhaps it could

stave off some of these closures? Were there know, towns can do, for example, the stoning that could help the colleges sell property or use it in more mixed ways. I think there's also the feeling and it came out very clearly both in Aurora and Wells and some other communities that I talked with that also had pretty abrupt college closures, communication would be really outful. You know, a lot of people said it's one thing for the college to shut down, but for it to shut down so abruptly and take us by surprise, that didn't enable us to do any kind of planning for what was next. But I don't think, unfortunately, there is any sort of magic bullet, some solution that's going to make colleges finance this whole and, you know, avert other auroras and other wells from going through the same thing.

All right. Karen Fisher wrote the story, When Gown Leaves Town for the Chronicle of Higher Education. Thanks for sharing your reporting. Thanks, Amy. Coming back to the housing theme, according to AARP, most older adults, 75% want to stay in their homes as they age, but at the same time, 44% don't think they'll be able to. Between accessibility issues and affordability, aging in place can be hard, but not impossible, which brings us to the latest installment of our series, Adventures in Housing. I live in a senior cooperative in Golden Valley, Minnesota. My mom, about six months after my dad died, we had a conversation. She was living in Omaha, Nebraska, and wanted to move back to the Twin Cities area. And so she came to a visit, and we took her to a couple condos and she liked them but didn't love that.

And then we saw an open house at a cooperative. It was a senior 55 plus housing cooperative. So it's resident owned, resident run, and then if something breaks down, the cooperative is the one who comes in and either fixes it or replaces it. Midway through the tour, my husband whispers to me, you know, maybe we should be thinking of moving here, whether your mom wants to or not.

So she moved in one week and then we closed the week after. We are in a two-bedroom unit and we paid $115,000 for the unit. And our carrying costs, so monthly, we pay a little less than $1,500 a month. And that includes cable, internet, everything. In our particular building, we have a solarium. We have guest rooms. We have a woodworking room where people are doing woodworking. And there's activities all the time. The one downside of our particular

place is that we don't have in-unit washers and dryers. But that's never been a problem for us. And now my husband's brother and his wife, who is my longtime best friend, have also moved into our co-op. And so now we have like this big family affair at our cooperative that we just love. It's like we're back in our dorm in college. Part of our appeal was that we could be in the same place as my mom. And to not necessarily be on top of her,

she's kind of a medical obstacle course as far as various surgeries and orthopedic issues. And so for people who can afford it, you can age in place. And we've now gotten into a community that we didn't know we needed. into a community that we didn't know we needed. Kirsten Harrison in Golden Valley, Minnesota. You know, we can't do this series without you, so wherever you are in your housing journey, tell us about it.

Marketplace.org slash Adventures in Housing. closing. Coming up... As soon as I posted that we're closing March 31st, it went crazy and it's been like this every single day, all day. Kind of makes you want to stay open though, right? But first, let's do the numbers. Markets were closed today in observance of what the New York Stock Exchange officially calls Washington's birthday. Samantha Fields was telling us about the rough start the housing markets had so far this year. This is a big week for data

on that market. We'll get the Home Builder Confidence Index tomorrow and January's numbers of housing starts and new building permits on Wednesday. Consensus is those numbers will be down. Maybe you could even see the sluggish housing market in the retail sales report for January that the Census Bureau put out on Friday. Sales at furniture and home furnishing stores were down one and seven tenths percent from December, nearly twice the decline in overall retail sales. You're listening to Marketplace. This economy can be complicated. That's why the Marketplace newsletter makes understanding it all simple.

Get smart takes on the week's biggest stories delivered to your inbox every Friday. No jargon, no hype, just economics you can use. Sign up today at Marketplace.org slash subscribe. Hi, I'm Kai Rizdal, the host of How We Survive. This season is all about the institution that shaped me, the U.S. military, and how it could shape the future of climate tech. You've probably heard that 2024 was the hottest year on record, that wildfires devastated Los Angeles, and that the U.S. withdrew from the Paris agreement again.

And while all that might feel pretty terrible, the climate crisis is not an inevitable reality. From simulated climate emergencies to microgrids and sustainable aviation fuel, we look at how the military is investing part of its $850 billion budget in a greener, more resilient future. Listen to How We Survive wherever you get your podcasts. This is Marketplace. I'm Amy Scott. Kentucky is recovering from heavy rain and flooding over the weekend with another winter storm on the way. At least 11 people died in the floods and more than a thousand had to be rescued. Flood risk is growing

in many parts of the country due to climate change and when communities rebuild after disaster the Federal Emergency Management Agency has a rule aimed at preventing repeat property damage in the future. It's known as the 50% rule. Carlyle Calhoun from the podcast, See Change, looks at how it's played out in two different communities. 90% of the entire historic town of Mandeville, Louisiana is in the FEMA flood zone. I'm getting a tour from Rod Scott, and all the houses we pass are lifted up on pilings 12 feet in the air. This is the one that's going up right now. Look at that. feet in the air. This is the one that's going up right now. Look at that.

Scott's a contractor who specializes in elevating buildings. He's raised 1,500 all over the country. Better breeze, better view. You don't have to flood. Scott tells me Mandeville has flooded 17 times in the last 18 years during storms and hurricanes. And when houses are significantly damaged, homeowners have to elevate because of FEMA's 50% rule. The rule says if your house is damaged and repair costs are over half of your house's

market value, you can't simply repair your house to how it was before. Now almost all the buildings in historic Mandeville are perched high up on pilings. Houses, restaurants, stores, all up with the birds. Mandeville is the most flood adapted retrofitted community on the planet right now. But it's expensive. Just a small house costs $150,000 to elevate. And most of the houses in Mandeville are not small. Some homeowners

here have shelled out a million dollars to raise their house. Homeowners insurance doesn't cover it, so almost everyone in Mandeville has paid out of pocket. So in this community there was enough wealth to write a check and do that. But 80 miles south of Mandeville, it's a different story.

Reverend Tyrone Edwards is the council member in Pointe-A-La-Hatch, a majority black town right on the banks of the Mississippi River. Because the law that FEMA created was forced elevation, people can't afford it. Forced elevation. That's how a lot of people refer to the 50% rule. And Pointe-A-La-Hatch is at severe risk of flooding. I'm afraid because I know if a hurricane comes today, this community can't rebuild. In this community, most residents don't have over a hundred grand to elevate if their homes

are severely damaged. There are FEMA grants available to help cover elevation costs, but demand is high and these grants are hard to get. So I had a grant to elevate the house. Like one of the few in this area that got the grant. That's Chadwick Onkaleid, one of two residents in Pointe-à-La-Hatch who received a FEMA elevation grant after his house was damaged in Hurricane Katrina. Now, his home sits 23 feet in the air. The house is that high. I see over the levee. I can see the ships. I see everything. Beautiful view.

Onkaleid knows when the next storm hits, his elevated house will probably make it through all right. But his mom, Fergie Onkaleid, lives next door, and her house is barely off the ground. Here we are, you know. What's going to happen if something happens to my home? I don't have the funds to elevate, you know? I don't have the funds to elevate, you know, I don't have the funds to elevate anything. It's easy to imagine Chadwick Enclave's house is one of the few that survived the next storm.

And he's worried about his mom and his neighbors. This is a tight-knit community, and he says people don't want to leave. It's part of you, it's part of your being, So it's like losing a part of yourself if you leave. The goal of FEMA's 50% rule is to create safer communities. But what that often looks like on the ground is pay to go up or find a new place to live. In Pueblo La Hache, Louisiana, I'm Carlisle Calhoun from Marketplace. You may have noticed we do a lot of stories on this show about retail because how stores

are doing tells us a lot about what's happening in the economy. Or in the case of this next story, how the economy has changed. Marketplaces Sarah Leeson went to visit a store that's closing its doors after 57 years. Along the main thoroughfare of Arlington, Massachusetts, is a tiny typewriter repair and retail shop, Cambridge Typewriter. The place has been around so long that the phone number on the big sign above the front door doesn't even have the area code. It's packed on a Saturday morning. Amidst towers of typewriters, some refurbished and shiny, others clearly in need of some

love, customers edge around each other to look at what's in stock. Among them is Maggie Caldwell. She drove down from Bath, Maine to see if she could snag a typewriter before the place closes. My mom had a typewriter and like it's very nostalgic for me to like hear the click clack sound. And now I have a little daughter and I kind of want to like bring that back.

She's browsing the wares with Tom Furrier, the shop's owner of 45 years. You're probably gonna like this. I just acquired this like 20 minutes ago. Oh my God. This is way nicer than what I got over there. Okay. Can I play around with it a little?

Yeah, I'm going to put this over there for you. Sure. He puts down a Royal Portable Typewriter for her to check out. Tom has no shortage of customers these days. As soon as I posted that we're closing March 31st, it went crazy and it's been like this every single day, all day. I haven't got anything done at my bench. Which is fine because I love, you know, meeting people and talking, you know, typewriters.

But I need to fix some of these machines before I go. Tom is turning 70 this year. He says he's ready to retire. Over the last year, he's tried to find a buyer for the shop, but it hasn't worked out. I just said, that's it. I'm not putting up retirement anymore. You know, we're just gonna have to close the shop

and people will have to, you know, find other means. There are more than 50 typewriter shops still operating across the US, according to data from Old Bob's Old Typewriters, a website for typewriter enthusiasts. Yeah, they have those. Tom calls his store a break-even kind of business, pulling in 130,000 a year these days, give or take.

But the early 2000s saw an explosion of interest in typewriters, as vintage came back into style. And there might be another reason. I think Taylor's given a resurgence to it, perhaps. Megan Moralia, a 23-year-old studying for her MFA at Boston University, is of course referring to Taylor Swift. This is Megan's first time at the store, and she's here to see if she can get her family's typewriter fixed up.

She's really wanted to take retro aesthetics and revisit them and consider how they can be applied to the contemporary. Tom estimates about a third of his customers these days are young adults like Megan. But not all first-timers fit that category. Charles Gilroy is here from Hingen, Massachusetts. He was diagnosed with Parkinson's back in 2008. My handwriting is so bad, some things come back to me where they can't read it in the post office.

I've been trying to find a program for my computer that would be able to write on a check. I haven't been able to find one that you could just take an envelope, stick it in, and just line up the lines and write the check. So a typewriter. Tom digs one out that seems like a perfect fit. It's an electric Corona Smith, and he tells Charles he'll sell it to him for just under $200 after he's gotten it fixed up.

It's going to add to his repair backlog, which is about four months long now. 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, you know? It's beautiful. He still has about a month to make those memories and fix all those typewriters. In Boston, I'm Sarah Leeson for Marketplace. This final note on the way out today, Kai ended the show Friday talking about potential layoffs at the IRS as Elon Musk and his Department of Government Efficiency worked their way through the federal bureaucracy.

Now several outlets are reporting the DOJ team is trying to access an IRS system that includes detailed financial information about every taxpayer, business, and nonprofit in the country. Meanwhile, a federal judge said today she hopes to rule within 24 hours in a lawsuit aimed at blocking Doge's access to information systems at seven other federal agencies. Our daily production team includes Andy Corbin, Iru Ekpunobi, Nicholas Geyong, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio.

I'm Amy Scott. We will see you tomorrow. This is APM.