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Message
re: Lets talk about the housing bubble
Posted on 3/1/18 at 11:37 am to cokebottleag
Posted on 3/1/18 at 11:37 am to cokebottleag
quote:Ehhhhhh just because we don't have de jure zoning laws doesn't mean we don't have a problem with city council members and "concerned citizens" gumming up the works by slow-walking permits and nuisance lawsuits. HHA tried to redevelop one of its own office buildings into a mixed-income apartment complex and got shite on by Sy Turner and had to drag HUD into it to get anything done.
Houston isn't like other cities; there is no zoning that prevents low cost apartment complexes or high density residential.
This post was edited on 3/1/18 at 11:38 am
Posted on 3/1/18 at 11:37 am to cokebottleag
I bought at the end of 2008 for $190k(after all closing costs, etc). I am at $159k on the loan, and the comps put my house at $260 right now. I'm looking at pulling out about $25k-$30k with a cash out refi for improvements, paint, etc. I am currently at 5% on the mortgage rate.
Bad idea, or good?
Bad idea, or good?
Posted on 3/1/18 at 11:37 am to GoCrazyAuburn
quote:
(short term, I know the value of a house long term vs apartment).
If you're looking at swapping a $1,200 a month apartment for making a payment on a mortgage of $2,000 a month, and you're paying $600 in interest, $900 a month in homeowners insurance and taxes, you'd be better off financially in the apartment.
Posted on 3/1/18 at 11:38 am to Centinel
quote:
Holy shite it's even getting stupid there
Jackson County is still pretty cheap - and quite pretty. Parts of Limestone Co. are still reasonable but they keep going up - at least land. You can still get a really nice house in Athens or East Limestone for $110/sqft
Posted on 3/1/18 at 11:39 am to cokebottleag
quote:
If you're looking at swapping a $1,200 a month apartment for making a payment on a mortgage of $2,000 a month, and you're paying $600 in interest, $900 a month in homeowners insurance and taxes, you'd be better off financially in the apartment.
Sure. There are plenty of ways to make an apartment more financially beneficial than a house. You're lying though if you argue that buying a house isn't/can't be better financially than renting your entire life.
Posted on 3/1/18 at 11:39 am to cokebottleag
Downvoted because you did your analysis in a vacuum which is a fundamental flaw.
First of all 9% IS a huge jump from where we are right now. You irresponsibly downplay that, but a 5% jump overnight is, I’m pretty sure, unprecedented. Working our way back up to 9% will take a long time.
Second, IF we were back at 9%, the implication would be that the economy was roaring. Therefore it would be a safe assumption that we would have been seeing significant wage-growth during that time-period too, and thus, people could afford the bigger payments driven by the higher interest rates.
First of all 9% IS a huge jump from where we are right now. You irresponsibly downplay that, but a 5% jump overnight is, I’m pretty sure, unprecedented. Working our way back up to 9% will take a long time.
Second, IF we were back at 9%, the implication would be that the economy was roaring. Therefore it would be a safe assumption that we would have been seeing significant wage-growth during that time-period too, and thus, people could afford the bigger payments driven by the higher interest rates.
Posted on 3/1/18 at 11:43 am to Cooter Davenport
quote:It's not unprecedented, you only have to go back to the 1980s when Volcker would hike shite 5-6% over the course of a few months. Is it likely? Probably not, Fed chairs these days are a little more politically sensitive and don't have Volcker's DGAF levels. But it's not unprecedented.
You irresponsibly downplay that, but a 5% jump overnight is, I’m pretty sure, unprecedented.
Posted on 3/1/18 at 11:43 am to Iosh
quote:
Ehhhhhh just because we don't have de jure zoning laws doesn't mean we don't have a problem with city council members and "concerned citizens" gumming up the works by slow-walking permits and nuisance lawsuits. HHA tried to redevelop one of its own office buildings into a mixed-income apartment complex and got shite on by Sy Turner and had to drag HUD into it to get anything done.
Yes, true. I recall there being a 'tower of traffic' campaign (with accompanying lawsuit) in West U while we lived in Braeswood to get some apartment tower construction prevented. I don't know what ever became of it, I moved 50 miles away to the Woodlands.
However, I think the point is still a good one in conjunction with the fact that Houston (unlike San Fran, LA, Seattle, Vancouver, NYC, Boston, etc has no geographic features preventing expansion.
Posted on 3/1/18 at 11:45 am to GoCrazyAuburn
quote:
Sure. There are plenty of ways to make an apartment more financially beneficial than a house. You're lying though if you argue that buying a house isn't/can't be better financially than renting your entire life.
Of course it can. If you buy a house and never leave.
If you're going to buy a house and then move about every 5-7 years and reset your 30 year clock (like many people of the boomer generation) then you're just renting with debt.
Posted on 3/1/18 at 11:46 am to cokebottleag
quote:
We're in a housing bubble that's been created for 20 years, and shite's going to get really bad before it gets better.
How old are you? Serious question
Cause shite was rock bottom for about 7yrs
This post was edited on 3/1/18 at 11:52 am
Posted on 3/1/18 at 11:47 am to HempHead
St. John is a goldmine. Only issue is construction costs and availability of reputable crews on the island.
Posted on 3/1/18 at 11:50 am to Damone
quote:
St. John is a goldmine. Only issue is construction costs and availability of reputable crews on the island.
I would never, ever use West Indian labor. Much better to 'import' crews from either the States, or maybe from somewhere in Central America. Knowing the complete corruption of the VI government, though, they might not allow that, even if it means a quicker turnaround.
ETA: I sure as hell wouldn't hire Frenchies, either.
This post was edited on 3/1/18 at 11:51 am
Posted on 3/1/18 at 11:51 am to Cooter Davenport
quote:
Second, IF we were back at 9%, the implication would be that the economy was roaring. Therefore it would be a safe assumption that we would have been seeing significant wage-growth during that time-period too, and thus, people could afford the bigger payments driven by the higher interest rates.
None of this happened during the stagflation of the Carter/Reagan years.
Inflation is not necessarily tied to economic boom. Often it can be a result of irresponsible currency management.
Posted on 3/1/18 at 12:44 pm to cokebottleag
I’ve been making the argument for years that we were in an inflation bubble above all else and in danger of a fiscal cliff second.
Bush did $1 trillion in the “too big to fail” bailouts, then Obama did $5 trillion more in the QE (not really QE) “Stimulus”, which was just code for “bailing out ~900 companies and banks”, which isn’t how QE is supposed to work.
In that time, they only allowed inflation/CPI to go up 13.4% even though we literally doubled the M2 money supply. (hence the bubble)
IF Hillary would have won and essentially continued the Obama economic agenda of over-regulation, anti-business, high corporate and personal taxes, trade deals resulting in deficits, mass corporate inversions, pro Dodd-Frank, consistent expansion of social welfare, < 2.0% annual GDP growth, plus continued massive deficit spending, which all would have required them to continue forcibly holding interest rates down, we would have gotten our credit downgraded again and the inflation bubble would have turned into a full blown global currency/Dollar bubble too.
In other words, we likely would have gone over the fiscal cliff, which would have been a catalyst for hyper-inflation as the value of the Dollar plummeted. This time sending us into a massive Depression.
Another bout of QE wouldn’t have saved us, but this is what she would have done to attempt to save her Presidency instead of going America-first protectionist populist pro-business and lowering taxes. Dems simply don’t do that shite. Borrowing and spending at the expense of the future is all they know. But that’s exactly what would have caused the collapse, and set us up for an even bigger one down the road yet again.
But luckily that didn’t happen. Trump’s economic agenda is the exact opposite. Businesses have money and are less leveraged. Consumers have money, jobs, and growing wages. Companies home and overseas are investing trillions in the US over the next few years and beyond.
The bubbles have been staved off.
The other big difference is supply and demand. Inflation not only goes up because of QE and adding physical dollars into circulation, but also because demand for goods and services extends higher than supply.
Right now, supply and demand are in harmony. Actually, supply is higher than demand, but the QE/Stimulus under Obama bailed out that debt from excessive supply, so it’s virtually a non-factor.
Banks and lenders aren’t handing out interest only ARM’s with giant balloons to anyone with a 450+ credit score anymore. Fannie and Freddie in cahoots with the banks and ratings companies aren’t burying shitty loans inside over-rated loan tranches while running a Ponzi Scheme any longer.
As a result, also, hyper-inflation isn’t a factor or concern anymore. Meaning the Fed doesn’t have to drastically raise interest rates.
We still do need interest rates to go up for the simple fact inflation was held down too much during the last 8 years while doing absurd QE, but it doesn’t need to be drastic.
This is why we will only see 0.25 basis point bumps for 2-3 quarters of each year over the next few years. And they will probably even stop after +2.0% and take 4 years to get there.
Saying we will reach 9.0% just isn’t realistic. It’s no longer needed to stave off economic threats or prevent a bubble bursting or a cliff dive.
We aren’t going to get downgraded if our GDP growth is averaging 3.0%+, and we aren’t going to pop a bubble if interest rates increase at virtually the same rate or less than the increase in consumer take home income.
And with the take home increase from tax cuts and wage growth, that’s not going to be an issue. Supply and demand, even in the housing market, should continue being in harmony for the foreseeable future if we continue on this current economic agenda and path.
TLDR version:
If Hillary won, yes, inflation/interest rate/currency bubbles and fiscal cliff were almost a certainty to have burst and caused a collapse.
Trump won and his economic agenda is staving off the threats. Rates will go up gradually and slightly at an acceptable pace to consumer take home income.
Bush did $1 trillion in the “too big to fail” bailouts, then Obama did $5 trillion more in the QE (not really QE) “Stimulus”, which was just code for “bailing out ~900 companies and banks”, which isn’t how QE is supposed to work.
In that time, they only allowed inflation/CPI to go up 13.4% even though we literally doubled the M2 money supply. (hence the bubble)
IF Hillary would have won and essentially continued the Obama economic agenda of over-regulation, anti-business, high corporate and personal taxes, trade deals resulting in deficits, mass corporate inversions, pro Dodd-Frank, consistent expansion of social welfare, < 2.0% annual GDP growth, plus continued massive deficit spending, which all would have required them to continue forcibly holding interest rates down, we would have gotten our credit downgraded again and the inflation bubble would have turned into a full blown global currency/Dollar bubble too.
In other words, we likely would have gone over the fiscal cliff, which would have been a catalyst for hyper-inflation as the value of the Dollar plummeted. This time sending us into a massive Depression.
Another bout of QE wouldn’t have saved us, but this is what she would have done to attempt to save her Presidency instead of going America-first protectionist populist pro-business and lowering taxes. Dems simply don’t do that shite. Borrowing and spending at the expense of the future is all they know. But that’s exactly what would have caused the collapse, and set us up for an even bigger one down the road yet again.
But luckily that didn’t happen. Trump’s economic agenda is the exact opposite. Businesses have money and are less leveraged. Consumers have money, jobs, and growing wages. Companies home and overseas are investing trillions in the US over the next few years and beyond.
The bubbles have been staved off.
The other big difference is supply and demand. Inflation not only goes up because of QE and adding physical dollars into circulation, but also because demand for goods and services extends higher than supply.
Right now, supply and demand are in harmony. Actually, supply is higher than demand, but the QE/Stimulus under Obama bailed out that debt from excessive supply, so it’s virtually a non-factor.
Banks and lenders aren’t handing out interest only ARM’s with giant balloons to anyone with a 450+ credit score anymore. Fannie and Freddie in cahoots with the banks and ratings companies aren’t burying shitty loans inside over-rated loan tranches while running a Ponzi Scheme any longer.
As a result, also, hyper-inflation isn’t a factor or concern anymore. Meaning the Fed doesn’t have to drastically raise interest rates.
We still do need interest rates to go up for the simple fact inflation was held down too much during the last 8 years while doing absurd QE, but it doesn’t need to be drastic.
This is why we will only see 0.25 basis point bumps for 2-3 quarters of each year over the next few years. And they will probably even stop after +2.0% and take 4 years to get there.
Saying we will reach 9.0% just isn’t realistic. It’s no longer needed to stave off economic threats or prevent a bubble bursting or a cliff dive.
We aren’t going to get downgraded if our GDP growth is averaging 3.0%+, and we aren’t going to pop a bubble if interest rates increase at virtually the same rate or less than the increase in consumer take home income.
And with the take home increase from tax cuts and wage growth, that’s not going to be an issue. Supply and demand, even in the housing market, should continue being in harmony for the foreseeable future if we continue on this current economic agenda and path.
TLDR version:
If Hillary won, yes, inflation/interest rate/currency bubbles and fiscal cliff were almost a certainty to have burst and caused a collapse.
Trump won and his economic agenda is staving off the threats. Rates will go up gradually and slightly at an acceptable pace to consumer take home income.
Posted on 3/1/18 at 12:58 pm to cokebottleag
Right been hearing this nonsense for over a decade. Bubble this - Bubble that. Banks and system going to collapse. The Sky is Falling
Guess what - it was and still is nothing but fear porn bulls--t
Guess what - it was and still is nothing but fear porn bulls--t
Posted on 3/1/18 at 1:08 pm to cokebottleag
My sister is about to buy a 1.3 million dollar house outside Seattle. Prices at that range inside Seattle seem to get taken up quickly. Crazy arse market.
Posted on 3/1/18 at 1:09 pm to cokebottleag
Spongebob Squarepants' girlfriend lives in a bubble.
I will assume this is relevant.
I will assume this is relevant.
Posted on 3/1/18 at 1:22 pm to cokebottleag
quote:
Is this clear enough for everyone? The huge pool of homes that are being bought and sold for ever higher prices right now is going to devalue in a big way once interest rates become reasonable again.
I was listening to Fed Chairman Powell this morning, during his questioning one of the congressmen brought up student loan debt.
It’s estimated that 15-20% of all student loans are either in default or forbearance, what’s going to happen when 10% or more of 1.5 trillion in student loans is not paid? Can we say bailouts? Or better yet the leftist loons want loan debt forgiveness.
Posted on 3/1/18 at 1:23 pm to cokebottleag
quote:
you believe the stupidity that your home is an asset, I'm so sorry)
It's okay
Posted on 3/1/18 at 1:27 pm to cokebottleag
quote:
None of this happened during the stagflation of the Carter/Reagan years.
So your specific prediction is that we’re entering a period of stagflation? Because that’s the only scenario where there’s high inflation and low growth and high rates without corollary wage growth.
I’m aware of 70s stagflation. It was a weird moment in economic history and the exception rather than the rule. I don’t think it’s responsible to make future predictions based on the exception scenario.
The OP reeks of “I’m jealous of people who can afford expensive homes, so I’m going to make a prediction that they’re going to all lose money, because it makes my broke arse feel better to think that.” Wishcasting.
This post was edited on 3/1/18 at 1:29 pm
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