Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Bruce Woodruff]

@James Hamling Questions for you, my friend, curious about what you think since you have such good thoughts about this topic:

1) Do we need the Federal Reserve?

2) Should we return to the Gold Standard?

[Tony Kim]

Quote from @Bruce Woodruff:

Quote from @Tony Kim:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Sad part, I don't think the average American has a clue. And I believe the average politician is too damn scared to tell the truth

I usually agree, but I don't think the average politician has a clue either. You're giving them way too much credit for intelligence, or more importantly common sense. Sure they have their Ivy League and Law school degrees, but that has become nothing more than a warning sign nowadays.

And the ones that happen to have half a clue know that it costs too much political capital to make a change that would actually benefit us in the long term. They can move to stop borrowing and stop printing money, but that would also end their political career.

Question for you Tony....in your opinion, if the majority of politicians in DC really wanted to correct the problems, could they any more?

I don't think they would be able to agree on what the solution is. Even if we assumed no political fall-out, the two sides are so far apart that reaching a consensus on what the best course of action would be is highly unlikely, IMO. But I guess that's part of our system of checks and balances.

[Bruce Woodruff]

Quote from @Tony Kim:

Quote from @Bruce Woodruff:

Quote from @Tony Kim:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Sad part, I don't think the average American has a clue. And I believe the average politician is too damn scared to tell the truth

I usually agree, but I don't think the average politician has a clue either. You're giving them way too much credit for intelligence, or more importantly common sense. Sure they have their Ivy League and Law school degrees, but that has become nothing more than a warning sign nowadays.

And the ones that happen to have half a clue know that it costs too much political capital to make a change that would actually benefit us in the long term. They can move to stop borrowing and stop printing money, but that would also end their political career.

Question for you Tony....in your opinion, if the majority of politicians in DC really wanted to correct the problems, could they any more?

I don't think they would be able to agree on what the solution is. Even if we assumed no political fall-out, the two sides are so far apart that reaching a consensus on what the best course of action would be is highly unlikely, IMO. But I guess that's part of our system of checks and balances.

 Ok, but what if they all agreed (I know, Lol) is it too late to pay off/down the debt and be responsible?

[Tony Kim]

Quote from @Bruce Woodruff:

Quote from @Tony Kim:

Quote from @Bruce Woodruff:

Quote from @Tony Kim:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Sad part, I don't think the average American has a clue. And I believe the average politician is too damn scared to tell the truth

I usually agree, but I don't think the average politician has a clue either. You're giving them way too much credit for intelligence, or more importantly common sense. Sure they have their Ivy League and Law school degrees, but that has become nothing more than a warning sign nowadays.

And the ones that happen to have half a clue know that it costs too much political capital to make a change that would actually benefit us in the long term. They can move to stop borrowing and stop printing money, but that would also end their political career.

Question for you Tony....in your opinion, if the majority of politicians in DC really wanted to correct the problems, could they any more?

I don't think they would be able to agree on what the solution is. Even if we assumed no political fall-out, the two sides are so far apart that reaching a consensus on what the best course of action would be is highly unlikely, IMO. But I guess that's part of our system of checks and balances.

 Ok, but what if they all agreed (I know, Lol) is it too late to pay off/down the debt and be responsible?

My naive mind says that it's probably not too late. It would take a lot of pain, but I think we can at least set a course where the YoY debt is decreasing instead of increasing, couldn't it? Who cares if it takes a 1,000 years.... just make sure it's decreasing. At least that's what my amateur economist mind says.

I'd be curious to know your thoughts too!

[Bruce Woodruff]

I think it would be incredible if we could at least start moving in the right direction. My cynical mind says no it's too late. Even if those morons all agreed, I think the ship has sailed. The citizens of this country would object anyway, too many people on benefits that would take to the streets.

Just my .02.....?

[Greg R.]

Quote from @Bruce Woodruff:

I think it would be incredible if we could at least start moving in the right direction. My cynical mind says no it's too late. Even if those morons all agreed, I think the ship has sailed. The citizens of this country would object anyway, too many people on benefits that would take to the streets.

Just my .02.....?

Unfortunately I'd have to agree. Feels like the economical damage that's been done is irreversible. In my mind the only way to "right the ship" (or at least attempt) would be to slash the federal government by at least 50-75%. The existence of these massive governmental agencies is antithetical to a thriving economy. The amount of money needed to "feed the machine" is quite overwhelming. I'd love to see an extremely lean government without all the "fat". Very hard to explain what 337,683 employees do at the Department of Veterans Affairs. The vets would be way better off if the government took 50% of the combined salaries of those employees and evenly distributed it amongst the vets. How about the 100,000 employees at the Department of Agriculture? Just way too much fraud, waste, and abuse to quantify. 
Virtually all of the politicians are part of the problem. Almost none of them would vote to reduce or abolish any of these agencies. Regardless of party, the politicians seem unified on this - staying in power and growing the power & authority of the government. 

[Matt Kalish]

Here in Florida it seems like the market is getting very saturated. Prices went up way too high and too fast. Sure miami beach will be fine, but apart from that, i'd be concerned. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Bruce Woodruff:

I think it would be incredible if we could at least start moving in the right direction. My cynical mind says no it's too late. Even if those morons all agreed, I think the ship has sailed. The citizens of this country would object anyway, too many people on benefits that would take to the streets.

Just my .02.....?

Unfortunately I'd have to agree. Feels like the economical damage that's been done is irreversible. In my mind the only way to "right the ship" (or at least attempt) would be to slash the federal government by at least 50-75%. The existence of these massive governmental agencies is antithetical to a thriving economy. The amount of money needed to "feed the machine" is quite overwhelming. I'd love to see an extremely lean government without all the "fat". Very hard to explain what 337,683 employees do at the Department of Veterans Affairs. The vets would be way better off if the government took 50% of the combined salaries of those employees and evenly distributed it amongst the vets. How about the 100,000 employees at the Department of Agriculture? Just way too much fraud, waste, and abuse to quantify. 
Virtually all of the politicians are part of the problem. Almost none of them would vote to reduce or abolish any of these agencies. Regardless of party, the politicians seem unified on this - staying in power and growing the power & authority of the government. 

Are you willing to give up medicare or SS? And is it good for the country if we do? Otherwise you really aren’t scratching the federal budget. 
 

[Chris Wolfe]

Quote from @Greg R.:

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

There is no  house of cards here to come tumbling down.

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

Dont forget the difference between 2008 and now is that people (most) dont NEED to sell.  In 2008 there was a flood of inventory because loans adjusted as prices dropped.  People couldnt afford the adjustment, didnt have any equity, and lost their home to foreclosure causing a wave of inventory.   Right now, (most) people have fixed rate loans at LOW interest rates.  They will simply take their house off the market and stay put instead of selling at a discount and having to go get another loan at a higher rate for a new property. I'm already seeing this happen in multiple markets we are in.  Yes we've dropped 15% and we probably have another 15% to go.  But simple supply and demand is going to keep this from turning into 2008.

[John Carbone]

@James Hamling @Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

[Michael Wooldridge]

Quote from @John Carbone:

@James Hamling @Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

[Bruce Woodruff]

Quote from @Michael Wooldridge:

Are you willing to give up medicare or SS? And is it good for the country if we do? Otherwise you really aren’t scratching the federal budget. 
 

You're talking apples and oranges....those programs are unique in that we paid into them. For decades. They are giving us our money back. That is a huge difference when compared to straight giveaway programs like welfare.

We can scratch the budget by freezing all spending and then cutting Federal agencies staffing by 50%. Force these deadbeats back into the private sector and let them start their own businesses and actually contribute instead of just taking.

[Joe Bertolino]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

@James Hamling @Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

 I don’t know if he actually read the story or if he thrives on click bait.  

I lost my desire to debate him when he “couldn’t remember” the subdivisions in Dallas he was claiming had hundreds (if not thousands) of completed homes sitting in standing inventory. 

[Michael Wooldridge]

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

Are you willing to give up medicare or SS? And is it good for the country if we do? Otherwise you really aren’t scratching the federal budget. 
 

You're talking apples and oranges....those programs are unique in that we paid into them. For decades. They are giving us our money back. That is a huge difference when compared to straight giveaway programs like welfare.

We can scratch the budget by freezing all spending and then cutting Federal agencies staffing by 50%. Force these deadbeats back into the private sector and let them start their own businesses and actually contribute instead of just taking.

 I'm not saying you can't save money but when you propose 50-75% cuts in the federal budget. It makes me wonder if somebody has looked at federal budget spending breakdown recently. 50% are those two things. So are we throwing everything else out to the tune of 100%?

[Nicholas L.]

@Bruce Woodruff

I think one of the interesting things is that the federal employee workforce is actually at a historic low as a percentage of the total population, while spending is up.  Government contractors love, love, love those federal dollars, and it's actually more expensive to hire a contractor than an employee.  I'd love to cut some of those contractors so that the employees can focus on mission.

But I don't think we're going to get to agreement on the size of the federal government when we can't define "crash" =-)

[John Carbone]

Quote from @Joe Bertolino:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

@James Hamling @Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

 I don’t know if he actually read the story or if he thrives on click bait.  

I lost my desire to debate him when he “couldn’t remember” the subdivisions in Dallas he was claiming had hundreds (if not thousands) of completed homes sitting in standing inventory. 

@Joe Bertolino  you must be thinking of someone else, I never said anything about dfw subdivisions.

Also, showing historic data being released is not click bait, they are facts based on real data in markets all across the country. What you say in your replies is click bait based on false assumptions of reality. While you can still live in your fantasy land there thinking prices won’t drop, there’s no supply and prices won’t drop..they already are, and it’s just getting started. What positive spin do developers and realtors get out of the article? That data is 2 months old, it’s already much worse now than it was then. Take off your tunnel vision blinders 

 Fact is, it is the biggest drop ever in a month, and the first drop in over a decade. But sure, nothing to see here all is well. 

[Nicholas L.]

@Joe Bertolino

I think you're mixing up posters, but it's hard to tell so maybe I am and you're not!

I agree with @Michael Wooldridge on what the article said - slowing / cooling / decelerating...

[Carlos Ptriawan]

Quote from @Chris Wolfe:

Quote from @Greg R.:

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

There is no  house of cards here to come tumbling down.

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

Dont forget the difference between 2008 and now is that people (most) dont NEED to sell.  In 2008 there was a flood of inventory because loans adjusted as prices dropped.  People couldnt afford the adjustment, didnt have any equity, and lost their home to foreclosure causing a wave of inventory.   Right now, (most) people have fixed rate loans at LOW interest rates.  They will simply take their house off the market and stay put instead of selling at a discount and having to go get another loan at a higher rate for a new property. I'm already seeing this happen in multiple markets we are in.  Yes we've dropped 15% and we probably have another 15% to go.  But simple supply and demand is going to keep this from turning into 2008.

 My friend, active inventory is increasing 4% every month, with this rate it's possible to reach 2020/2019 inventory. 
We should stop using arguments like people don't sell as new listings in vegas and Austin is more than 2021 new listing . A lot of our assumptions are incorrect.

[James Hamling]

Quote from @Tony Kim:

Quote from @James Hamling:

I agree with you, but is it enough of a hedge to provide protection against interest rates entering double-figures? Sorry if you already addressed this in an earlier post. Supposed to be WFH right now and don't have time to read everything.

 I get all the thoughts of everyone on high inflation tanking Real Estate prices because it drops purchasing ability, I get it, it makes a certain common sense. Things don't work that way with inflation though. Problem is the '08' crash, it's so present in peoples minds that there is this knee-jerk reaction to thinking that's how things will always work, and it's just not so. 

'08' crash made housing prices drop like a stone for 2 main reasons: 

#1, it was a financial system collapse, meaning there was no liquidity in the system, making for major hurdles in purchasing. Buying activity was severely impacted. 

#2, FORCED SALES of homes! This is a paramount fact, an absolute key-stone to it all, remove this everything is way different. The entire '08' collapse had to do with default rates. Those default rates were via BS mortgages that were with resetting payment structures. We not talking payments going up 10-20%, were talking payments going up like 200-300%. Mortgage payments were resetting at amounts that borrowers were not capable of paying, not at the time but EVER. They got a mortgage when all they could afford is say $1,700 mnth, and it had a 3yr reset too $3,200mnth, just totally out of reach from day 1.     When the resets started hitting, MBS started melting down. This made the whole system collapse, which is also why it was 100% predictable, ask Michael B. 

This set things up so as resets happened, on high leverage mortgages, there was NO EQUITY to draw upon, the occupants could not refi because they never qualified int he first place, only on BS NINJa mortgages that never should have been. They HAD to walk away, no choice, no options. This set things up for FORCED SALES.    As there was a mass volume of FORCED SALES that, THAT is what allowed for descending price market.    NOT the DOW dropping, NOT layoff's but yes those added fuel to it all. 

That does NOT exist today. Recession does NOT make for mass home sell off's, just look at history, we have had many recessions and NONE with mass home sell-off's ONLY '08' which the recession was a byproduct of financial system collapse, not the other way around. 

Home prices WILL go UP thanks to inflation. And yes, home sales volume will go DOWN due to affordability, and that's how we get to STAGFLATION market. 

There is no mechanism present to make FORCED SALES. There is mass equity to fall back on, there is a HUGE amount of sub 4% mortgages, there is no resetting mortgage payments. THERE IS NO FORCED SALES SCENARIO. 

We have a massive shortage of workers, ready to absorb unemployed. The absorption rate for housing and job seekers is massive. 

Sorry to tell everyone licking there chops thinking there about to get there shot at a 2009 market, no, your not. Today is very literally the BEST time to buy, unit price wise. Because next boot to fall is rising tax's, which will push cost of inputs for housing up even more. 

We are in a net shortage housing market, that means the product setting market prices IS new unit construction. And with costs per new unit on the steady increase, well, it's simple math. 

Unless you can get 3.5 million Americans to die tomorrow, or decide living in a tent is better, no, not gonna happen. 

Builders are now with systems in place to prevent getting caught in a situation like '09' where there loans required them to produce _ units per month to keep it alive. They learned there lesson, there is not a glut of units. Maybe a handful here n there, that's it, not whole developments like in '09'. 

This is how inflation works. It has happened before. The world is a lot older then 30 years, housing and money has been around for thousands of years. The record stands that in EVERY instance of high inflation, ASSETS especially of core necessity, rose in proportion to the inflation. 

Today, at the start of this, your able to snag some deals BECAUSE of the transitioning persons, those taking out GAINS to transfer into other places and there ok to take a little LESS gains then say 10 months ago, because it's still big gains. 

But now, where rates just ran up to, you WILL see the effects in 45 days start. Volume will drop off a cliff. Prices will not follow it. 

I am betting in 2/3 months BP will be lit up with posts saying "WTF, why are prices so high, don't they know it's supposed to be way less, WTF". 

Look, I am A-OK that 98% don't get it. In 2009 when I was flipping homes, exact same thing then, 98% told me I was daft and clueless, was going to loose my shirt. Same thing then, I followed the data not the chanting of the sheeple. The herd is excellent on reactive outdated actions. I expect that. 

Inflation is rather well set in it's impact, housing will go up. 30% drops will not happen on market scale. Recession does not = housing collapse. 

[Joe Bertolino]

Quote from @John Carbone:

Quote from @Joe Bertolino:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

@James Hamling @Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

 I don’t know if he actually read the story or if he thrives on click bait.  

I lost my desire to debate him when he “couldn’t remember” the subdivisions in Dallas he was claiming had hundreds (if not thousands) of completed homes sitting in standing inventory. 

@Joe Bertolino  you must be thinking of someone else, I never said anything about dfw subdivisions.

Also, showing historic data being released is not click bait, they are facts based on real data in markets all across the country. What you say in your replies is click bait based on false assumptions of reality. While you can still live in your fantasy land there thinking prices won’t drop, there’s no supply and prices won’t drop..they already are, and it’s just getting started. What positive spin do developers and realtors get out of the article? That data is 2 months old, it’s already much worse now than it was then. Take off your tunnel vision blinders 

 Fact is, it is the biggest drop ever in a month, and the first drop in over a decade. But sure, nothing to see here all is well. 

 Obviously If rates stick at 9% for an extended period of time the market activity will grind to a halt. Will it drop 20%+ year over year nationwide.  I don’t think so.  I don’t see how it can.  There is not enough inventory.   3.7 months in my area with very little standing inventory from builders.  The BIA hot list has 17 homes.  I predict people just won’t do much.  They will stay put until numbers start to pencil out again.  Considering most homes have a ton of equity and rentals are extremely expensive,  unlike 15 years ago,  people won’t be walking away from their homes in mass.  

[John Carbone]

Quote from @Joe Bertolino:

Quote from @John Carbone:

Quote from @Joe Bertolino:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

@Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

 I don’t know if he actually read the story or if he thrives on click bait.  

I lost my desire to debate him when he “couldn’t remember” the subdivisions in Dallas he was claiming had hundreds (if not thousands) of completed homes sitting in standing inventory. 

 you must be thinking of someone else, I never said anything about dfw subdivisions.

Also, showing historic data being released is not click bait, they are facts based on real data in markets all across the country. What you say in your replies is click bait based on false assumptions of reality. While you can still live in your fantasy land there thinking prices won’t drop, there’s no supply and prices won’t drop..they already are, and it’s just getting started. What positive spin do developers and realtors get out of the article? That data is 2 months old, it’s already much worse now than it was then. Take off your tunnel vision blinders 

 Fact is, it is the biggest drop ever in a month, and the first drop in over a decade. But sure, nothing to see here all is well. 

 Obviously If rates stick at 9% for an extended period of time the market activity will grind to a halt. Will it drop 20%+ year over year nationwide.  I don’t think so.  I don’t see how it can.  There is not enough inventory.   3.7 months in my area with very little standing inventory from builders.  The BIA hot list has 17 homes.  I predict people just won’t do much.  They will stay put until numbers start to pencil out again.  Considering most homes have a ton of equity and rentals are extremely expensive,  unlike 15 years ago,  people won’t be walking away from their homes in mass.  

@Joe Bertolino @james hamling 

Seems like despite the data released today which shows:

1) people are listing homes (there is inventory)

2) prices are dropping 

3) largest drop in history 

So your saying this is just temporary and not indicative of what is to come despite rates being 200 basis points higher now than august (when this data is from) 

Neither of you think a 20 percent peak to trough drop is possible, so I guess we actually have to see official numbers of 20 percent drop for you to realize it.

the likely outcome here is 20-30 percent drop. Fed cuts rates and housing goes back up to reinflate the bubble eventually like they always do. But prices needed to drop while rates are high, and they officially are now. 



 

[Tony Kim]

Quote from @Michael Wooldridge:

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

Are you willing to give up medicare or SS? And is it good for the country if we do? Otherwise you really aren’t scratching the federal budget. 
 

You're talking apples and oranges....those programs are unique in that we paid into them. For decades. They are giving us our money back. That is a huge difference when compared to straight giveaway programs like welfare.

We can scratch the budget by freezing all spending and then cutting Federal agencies staffing by 50%. Force these deadbeats back into the private sector and let them start their own businesses and actually contribute instead of just taking.

 I'm not saying you can't save money but when you propose 50-75% cuts in the federal budget. It makes me wonder if somebody has looked at federal budget spending breakdown recently. 50% are those two things. So are we throwing everything else out to the tune of 100%?

Last year the deficit was what? 2.7T? This year it's projected to be right around $1T (I'll bet the WH will throw a parade) 

Since we are talking about what it will take while ignoring the political fallout, the first step would be to get rid of the crony capitalism that is rampant in our health care system and has also infected much of the rest of the government whenever there are private contracts involved. 

Sooner or later, changes will have to be made. Right now we are paying 357 billion in interest. If we can't touch SSA and Medicare or defense or any other type of meaningful cut, I think we all know what the other solution is.  

[Joe Bertolino]

Quote from @John Carbone:

Quote from @Joe Bertolino:

Quote from @John Carbone:

Quote from @Joe Bertolino:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

@Joe Bertolino

hot off the press.

Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index

https://www.cnbc.com/2022/09/2...

I thought sellers wouldn’t sell, prices wouldn’t drop, and theres no inventory?

I posted the math here a few days ago about how all the equity during Covid was phantom here: https://www.biggerpockets.com/...

this is just getting started folks, this is July data…rates are up almost 2 percent since then. unless rates come back down fast, the winter numbers are going to look abysmal. 

Did anybody say the rate of growth wouldn't stop? overall still up, but slowing growth (which is beyond expected). Are people actually saying that there will be no slowing to the growth?  Or are people just saying the market won't crash which would be 20% reduction or more? All this says is it's slowing (and not even that much all things considered). 

 I don’t know if he actually read the story or if he thrives on click bait.  

I lost my desire to debate him when he “couldn’t remember” the subdivisions in Dallas he was claiming had hundreds (if not thousands) of completed homes sitting in standing inventory. 

 you must be thinking of someone else, I never said anything about dfw subdivisions.

Also, showing historic data being released is not click bait, they are facts based on real data in markets all across the country. What you say in your replies is click bait based on false assumptions of reality. While you can still live in your fantasy land there thinking prices won’t drop, there’s no supply and prices won’t drop..they already are, and it’s just getting started. What positive spin do developers and realtors get out of the article? That data is 2 months old, it’s already much worse now than it was then. Take off your tunnel vision blinders 

 Fact is, it is the biggest drop ever in a month, and the first drop in over a decade. But sure, nothing to see here all is well. 

 Obviously If rates stick at 9% for an extended period of time the market activity will grind to a halt. Will it drop 20%+ year over year nationwide.  I don’t think so.  I don’t see how it can.  There is not enough inventory.   3.7 months in my area with very little standing inventory from builders.  The BIA hot list has 17 homes.  I predict people just won’t do much.  They will stay put until numbers start to pencil out again.  Considering most homes have a ton of equity and rentals are extremely expensive,  unlike 15 years ago,  people won’t be walking away from their homes in mass.  

@Joe Bertolino @james hamling 

Seems like despite the data released today which shows:

1) people are listing homes (there is inventory)

2) prices are dropping 

3) largest drop in history 

So your saying this is just temporary and not indicative of what is to come despite rates being 200 basis points higher now than august (when this data is from) 

Neither of you think a 20 percent peak to trough drop is possible, so I guess we actually have to see official numbers of 20 percent drop for you to realize it.

the like outcome here is 20-30 percent drop. Fed cuts rates and housing goes back up to reinflate the bubble eventually like they always do. But prices needed to drop while rates are high, and they officially are now. 



 

 I am not sure there are a ton of listings.  Maybe in certain areas.  Last In my Sacramento metro area of 2M people there were 183 new listings. 

[Carlos Ptriawan]

Here's the inventory data:

Market  Aug22  Jul22  Aug21
Atlanta 15K 14K 9k
Dallas 19K 19K 11k
Georgia 21k 20k 13k
Houston 34k 33k 26k
Illinois 26k 27k 34k
vegas 9k 9k 3k
miami 26k 26k 23k
florida 47k 34k 33k
new york 39k 41k 46k
phoenix 18k 17k 7k
santa clara 1k 1k 1k
south carolina 19k 18k 14k

[James Hamling]

Quote from @Bruce Woodruff:

@James Hamling Questions for you, my friend, curious about what you think since you have such good thoughts about this topic:

1) Do we need the Federal Reserve?

2) Should we return to the Gold Standard?

 Wow Bruce, your gonna drag me out of this closet aren't you, lol. 

1) No! Not just a no but a HELL NO!    Every argument the Fed makes for it's existence is idiotic, and easily not necessary. And in fact it has been executed before and the result, was good.     The congress is 100% capable of doing there job. The U.S. does not need to pay a bank to own every dollar in existence. The U.S. is capable of selling it's own bonds, capable of directing it's own press's.     The question is will it put in the work to combat the banking cabal, and to that, no, I don't think they will.     The banking cabal has dug there claws so deep, taken over so much, it would be nothing short of burning the entire system out the ground to "cleanse" the system of the cancer to get back to healthy life.    The Fed is just 1 branch of the body whole, it's not the whole. So moment we try to sever that, they use there international bodies to assault us all. There IMF would enact punitive measures. It would take nothing short of a form of war to achieve freedom again. 

2) No, we can't, that ship sailed. Once upon a time we had the potential for this but there is a reason they left it and it was, that they over-spent the reserve. They had over-shot the gold and were so far into fraud territory. Today, to reset, would be to drop the dollar value by something like 97% to get back on the gold standard. And, China holds the biggest reserve of such so we'd be put in position subordinate to the Yuan. Chinese are smart, scary smart. 

If U.S. was to move back to a reserve standard that made sense, it would be on our true wealth center, oil. Look at others on such, Dubai, hows it worked for them? The only difference between the US and OPEC is they use it and we don't.     AND, we could engage in a N.American pact, which as much as I hate this, it would make a sense to have a N.American currency between U.S., CA and Mexico, backed by oil. Combined, it's a significant force, direct competitor with OPEC. And it could resolve our tariff issues with Canada, that would be hugely beneficial for both. It could be a legit win-win-win for all 3. 

As for gold, there isn't enough in all the world even if we had it all to move back to gold standard. If all think inflation is high today, imagine incurring the impact of the entire national debt worth of inflation all at once. That's what would happen. 

The Federal Reserve will come to be known someday, some generation, as the greatest scam ever pulled off in the history of the world. Generations will ask why humans for so long gave indentured servitude to a few? Why they served Kings and Queens of finance. They will talk about in ways that we look at mid-evil times, they will struggle to conceive just how generations were so dumb. Because they will look at all that's achieved in their times without it. It will be an action on level with the advent of the light bulb and harnessing electricity in how drastic the differences. 

How is it today the #1 economy, is arguably the poorest nation on earth? Name another nation who has even just 10 trillion in debt, U.S. is over 30T, almost a quarter million per tax payer. Yes, the U.S.A. is the poorest nation on earth. We are a hobo with a gold card.