I think that most of us stand to lose more capital in bonds, stocks and real estate than we might gain with higher interest rates. That depends of course on many things, not least of which is how long or short term our fixed investments are. I have been wary of duration for at least a year but even so I will suffer an immediate loss in the reactions to interest rate increases.
One issue that has become clear is that markets expect higher mortgage rates are coming, and that this will cut home building, hence demand for lumber and OSB, which should cut demand for timber. The formerly very hot local real estate and rental markets are cooling off too. I can see 4 active cranes looking out my window. I wonder if any of these cranes will stop working before finishing their projects? In 2008 I was in a less urban neighborhood, but plenty cranes were idled in Seattle that time.
BTW, what rough % of the new housing in your area is sided with sawn timber like lap siding or vertical tongue and groove or shingles? These are becoming flat out rare around here, even in $1+ million dollar homes. Fiber cement board everywhere. The big timber companies like Weyerhaeuser have traded down lately.
Likewise disappearing where I am are common bricks. Beautiful, but I guess just too expensive installed, other than used as accent panels or sections If anyone understands about this I'd like to hear from you.
Ha
