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Message
re: credit bubble vs house prices
Posted on 5/9/24 at 8:18 pm to Bard
Posted on 5/9/24 at 8:18 pm to Bard
quote:
Granted, it's not a massive drop but it's a drop happening as inflation is rising,
I mean, housing prices have come down modestly in a lot of areas, that's to be expected. And inflation has not been rising - it's been falling. quote:I'm not sure this has much to do with resi.
CREs though? CRE foreclosures began a stark rise last year. Full disclosure: CRE delinquency rates are still near historic lows but have been trending up for the last year and a half-ish and as the economy slows due to returning inflation growth (if that continues, and I have no reason to think it won't for at least the next couple of months) that is likely to continue (thus also pushing foreclosures up).
1
Posted on 5/9/24 at 11:35 pm to fareplay
quote:
We can afford it now, it will be ~ 25% of our post tax income on a mortgage, but also don’t really think it’s the best value. Also to further provide info: this is a very expensive area and have gone up 60%+ within past 1 year so even more concerning
Move
Posted on 5/10/24 at 4:03 am to WhiskeyThrottle
quote:
The market hasn't made logical sense in some time.
It’s truly amazing seeing people still waiting on a housing market ‘crash’ at this point. There’s low inventory and prices have remained stable despite rates skyrocketing. If one can afford a home today I’d rather buy it now where there is less competition then wait and have rates drop because all that is going to do is cause another buyer frenzy and you will be bidding for the same house you could get now against 2 or 3 other people. Buy now and refinance later.
Posted on 5/10/24 at 6:14 am to Big Scrub TX
quote:
And inflation has not been rising - it's been falling.
No, inflation has gone up. PCE went from 2.5% in January and February to 2.7% in March. CPI has increased every month this year YoY and has been .3, .3 and .4 MoM.
Now if you're talking about just the Shelter category, fair enough. It's still ridiculously high though (5.6%) and I imagine it's even higher in the areas the OP is looking at.
Posted on 5/10/24 at 6:43 am to Bard
quote:Normally I’d agree with that assessment, but this is an election year with a president who is almost Jimmy Carter bad (those memories stay with you).
quote:2 more bad jobs reports and the Fed is 100% going to cut Only if inflation is moving down. They know if they cut while inflation is moving up they will just be pouring gas on the fire.
There’s no bad decision they won’t be willing to make to try and win the election.
Posted on 5/10/24 at 8:21 am to ronricks
I was "waiting" on the vehicle market to move downwards. It's a high price item but well below housing costs, with more volume than housing and I'd think that market would take a hit before housing. This is me thinking logically and absent of any professional experience. But logically, it would seem that the vehicle market would be a leading indicator before the housing market tanked. My truck was paid off and I wasn't in a hurry to get another vehicle payment but the wife wanted to get a horse trailer so I went ahead and pulled the trigger last year on a truck to pull it. So far, I still can't find a better deal than what I got. When I bought, we had kept hearing "just wait another 6 months" for the previous 3 or 4 years. The indicators saying prices should come down exist, but prices just aren't moving enough to make a material difference.
To Bard's defense, the debt bubble isn't sustainable and it's only a matter of time before that implodes on banks. When? Who knows.
To Bard's defense, the debt bubble isn't sustainable and it's only a matter of time before that implodes on banks. When? Who knows.
Posted on 5/10/24 at 8:40 am to WhiskeyThrottle
quote:
To Bard's defense, the debt bubble isn't sustainable and it's only a matter of time before that implodes on banks. When? Who knows.
I'm of the opinion that nothing matters anymore that 'they' will find a way to keep propping up things and bailing things out etc. We clearly have different economy and economies of scale than in the past so I also don't think that just because something was true in 1970, 1982 or 1987 that it will come to fruition now in 2024. Things are different now. I don't pretend to know what will happen but the people who have been saying "wait 6 months" on things like housing and cars have looked like imbeciles. A car is a want not a need which is different from housing anyway. And you hit it on the head with this comment:
The market hasn't made logical sense in some time.
This post was edited on 5/10/24 at 8:42 am
Posted on 5/10/24 at 8:48 am to llfshoals
quote:
There’s no bad decision they won’t be willing to make to try and win the election.
Man Trump really knows how to pick him if his hand picked Fed Chair is in the Tank for Biden.
Posted on 5/10/24 at 8:59 am to llfshoals
quote:
Normally I’d agree with that assessment, but this is an election year with a president who is almost Jimmy Carter bad (those memories stay with you).
I think he's worse than Carter, the only thing keeping him from that mark is a complicit media soft-shoeing, then forgetting, his horrible handling of just about everything. But that's all an aside to the topic at hand...
quote:
There’s no bad decision they won’t be willing to make to try and win the election.
I am on the fence about that (JPow playing politics with the rates). Prior to last year's rate hikes I would have absolutely agreed, adding in that he was pussy-whipped by Wall Street to the point where any negativity in the market meant keeping rates low. Over this time period he's put on his big-boy pants while trying to use the lightest language feasible to keep the markets from throwing a fit.
We likely needed another .25 in Q4, but that didn't happen because he's determined to prove he can thread the mythical "soft landing" needle. This has allowed inflation to not just remain sticky, but slowly begin increasing again. So now he faces the following choices:
1. Leave rates alone and let inflation continue to slowly creep up until we hit a Recession (which may or may not happen before Election Day).
2. Leave rates alone until after Election Day, then raise or lower them.
3. Raise rates before the election, slowing the economy even further thus making it worse come Election Day.
4. Cut rates before Election Day, causing the growth of inflation to increase at a higher pace.
The only one that wouldn't hurt Biden's re-election chances is option 4, getting him into his lame duck term, but that's only if inflation growth didn't continue or speed up between the cuts and Election Day.
A lot of what choices he has available will depend on what happens between now and the end of the September meeting. If Unemployment continues to rise (or rise faster), inflation my begin to slow down or reverse again thus giving a better argument for a cut in September. If inflation continues to rise regardless, any argument for cuts becomes more and more difficult.
Posted on 5/10/24 at 9:10 am to JohnnyKilroy
quote:What, you think there’s a difference in the parties at election time when it comes to stupid decisions to try and get elected?
Man Trump really knows how to pick him if his hand picked Fed Chair is in the Tank for Biden.
Posted on 5/10/24 at 9:11 am to Bard
quote:Department of Education is largely why we’re where we are today
I think he's worse than Carter, the only thing keeping him from that mark is a complicit media soft-shoeing, then forgetting, his horrible handling of just about everything. But that's all an aside to the topic at hand...
This post was edited on 5/10/24 at 9:12 am
Posted on 5/10/24 at 5:34 pm to SDVTiger
Don't listen to this guy, he doesn't know what he's talking about. Median housing price has already dropped 10%+ in the last 1 year. It's doing exact opposite.
Now is not the right time to buy. Let it continue to go down.
Median house price in US
Now is not the right time to buy. Let it continue to go down.
Median house price in US
This post was edited on 5/10/24 at 5:37 pm
Posted on 5/10/24 at 5:37 pm to Saunson69
quote:
Are you saying you expect housing to increase another 6-8% this year
Yes thats exactly what im saying
It will be 10% + if rates drop even 1% which they will
quote:
Median housing price has already dropped 5%+ in the last 1 year.
Idiots like Diana Olick who has said not to buy a home for the last 15yr cause its gonna crash say
Posted on 5/10/24 at 5:39 pm to SDVTiger
Just check out this link
US Median home price
I still don't think people realize even if interest rates drop 1%, the average to quasi upper middle class American still can not afford these homes. There is no one waiting on the sidelines as those like to say for meager drops. They are waiting for major interest rate drops and housing price corrections.
Many are okay with renting until it happens as it is still cheaper.
US Median home price
I still don't think people realize even if interest rates drop 1%, the average to quasi upper middle class American still can not afford these homes. There is no one waiting on the sidelines as those like to say for meager drops. They are waiting for major interest rate drops and housing price corrections.
Many are okay with renting until it happens as it is still cheaper.
This post was edited on 5/10/24 at 5:41 pm
Posted on 5/10/24 at 6:42 pm to Saunson69
quote:
Just check out this link
What about it?
quote:
I still don't think people realize even if interest rates drop 1%,
There will be 5mil new potential buyers. You are crazy to think they wont buy
quote:
They are waiting for major interest rate drops and housing price corrections.
Many are okay with renting until it happens as it is still cheaper.
Looks like they wont be owning a home and will have missed out
Posted on 5/10/24 at 7:34 pm to SDVTiger
I’ve been waiting on my house to sell in BR since September and I’m not looking forward to buying a new house at these rates.
Posted on 5/10/24 at 8:51 pm to Rize
We are closing on the sale on our house at the end of the month. The inventory where we are moving to is trash. Assuming everyone is just waiting and staying put. Considering renting and waiting for the right house to hit the market. Everything feels kind of paralyzed.
This post was edited on 5/10/24 at 8:52 pm
Posted on 5/10/24 at 9:15 pm to WavinWilly
quote:
We are closing on the sale on our house at the end of the month. The inventory where we are moving to is trash. Assuming everyone is just waiting and staying put. Considering renting and waiting for the right house to hit the market. Everything feels kind of paralyzed.
Yeah I’m closing on the 31st also. I’ve been in the Spring Texas area looking since September and there’s been a couple houses that I’ve liked but our house wasn’t sold yet.
The house I wanted I could have bought but I would have been too stupid to be paying 2 mortgages for this long.
This post was edited on 5/10/24 at 9:21 pm
Posted on 5/13/24 at 9:19 pm to Rize
I would not be holding cash right now.
Rates are not moving, housing supply going sideways relative to buyers, most of whom are paying cash.
Dollar is about to get devalued as more countries shite can the dollar and all of those dollars come back. Too many dollars and too few goods, hyperinflation.
Rates are not moving, housing supply going sideways relative to buyers, most of whom are paying cash.
Dollar is about to get devalued as more countries shite can the dollar and all of those dollars come back. Too many dollars and too few goods, hyperinflation.
Posted on 5/13/24 at 9:46 pm to WavinWilly
Hey Willy, how have you been?
Where are you moving to? You are in Houston right now huh?
Where are you moving to? You are in Houston right now huh?
This post was edited on 5/13/24 at 10:43 pm
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