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Updated almost 2 years ago, 01/14/2023
Housing crash deniers ???
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.
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Quote from @Michael Wooldridge:
Quote from @Jay Hinrichs:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
Quote from @Jay Hinrichs:
Quote from @Carlos Ptriawan:
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
Some folks here will say "oh that's west coast problem :) LOL"
Where Eric lives saw some of the biggest downturns in values in the GFC Bend Redmond and some of the strongest gains this last bull run.
These are probably just another area where Bay Area / California folks overbidding the market.
IT’s 100% from the Bay Area folks, as well as Amazon/MS. Bend and some of the areas near Mt. bachelor (ski mt) saw big gains. but then do so did Colorado, Tahoe, and some of the other mountain towns thanks to the zoom markets. That on top of the cali money is going to drive valuations up. Also Bend was growing even pre-covid for similar reasons. It’s a shame it’s one of the towns I had an eye on for a ski house.
Not really Bend gets a lot of buyers from Portland metro who tire of the overcast and drizzle and move to the sun but don't want to leave the state. California buyers for sure impact but there is certainly a lot of organic Oregon buyers as well . its well known that CA transplants to Oregon and Washington is been a huge driver ( I am one ) but that has slowed a lot since the rise of values in Oregon and Wa. values here are akin to Sacramento type market and the gold country .. where in the past there was a huge price difference .. but again nothing compares to values from Los Gatos to Menlo Park when it comes to price per sq ft of housing . Although Seattle rose a ton and is very close to the same values.
I mentioned Amazon and MS for that reason. As those companies broke down offices folks from Seattle and Portland, big offices, they moved. So yes not just cali.
Since you moved to the area I know Bend I’ve had my eye on for years since Mt Bachelor is a great mountain. I’m sure you can confirm while Covid accelerated it was already growing nicely pre 2020.
as a quasi ski town its certainly not as expensive as Aspen Vail Park city prime Tahoe etc. its not like any of those areas one of the big draws is golf and just living in the high desert with a ton of sun.
- Jay Hinrichs
- Podcast Guest on Show #222
Quote from @Greg Scott:
The market may correct, but I firmly believe there won't be a crash. The reason is simple, equity.
Before 2008 people with no income could get liars loans and buy much more real estate than they could afford. We heard stories of cleaning ladies buying multiple million dollar homes. When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity. They couldn't sell and get out. We had cascading foreclosures creating a downward spiral.
Recently, prices have been surging. Given the laws passed after the Great Recession, appraisals and lending is highly restricted. Appraisals have not been keeping up with prices and lenders won't lend above appraised value. We sold a house in 2021 and in one day had 20 offers. Several of them had acceleration clauses stating they would pay more than anyone else up to $X. Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering. They had to make up the difference with cash. Those people have a ton of equity in their homes. If they had to sell, they might take a haircut, but they aren't going to get foreclosed.
There is no house of cards here to come tumbling down.
This is what I keep coming back to. Crashes happen because of a high amount of foreclosures. Foreclosures happen for one reason: affordability. When someone can no longer afford a home it's usually because of job loss or a drastic increase in tangential expenses (taxes, insurance, HOA, etc...), but I would argue that the former is more common than the latter. Someone's home is going to be their LAST resort when cutting back on expenses during a recession.
With how strong the job market has been (even in the face of a recession) I think the likelihood of a drastic increase in foreclosures is unlikely. The largest driver I anticipate for lowering prices is new construction contracts falling apart because of interest rates and dissatisfaction in homes because of rushed purchases causing quick re-sales. Both of which could cause a gradual decline or correction, but not the crash that people are expecting.
I think we'll see a decline in prices that tracks well with affordability changes caused by interest rates. Possibly a little deeper because of the psychology of the market, but not much deeper than that.
Quote from @Jay Hinrichs:
Quote from @Michael Wooldridge:
Quote from @Jay Hinrichs:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
Quote from @Jay Hinrichs:
Quote from @Carlos Ptriawan:
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
Some folks here will say "oh that's west coast problem :) LOL"
Where Eric lives saw some of the biggest downturns in values in the GFC Bend Redmond and some of the strongest gains this last bull run.
These are probably just another area where Bay Area / California folks overbidding the market.
IT’s 100% from the Bay Area folks, as well as Amazon/MS. Bend and some of the areas near Mt. bachelor (ski mt) saw big gains. but then do so did Colorado, Tahoe, and some of the other mountain towns thanks to the zoom markets. That on top of the cali money is going to drive valuations up. Also Bend was growing even pre-covid for similar reasons. It’s a shame it’s one of the towns I had an eye on for a ski house.
Not really Bend gets a lot of buyers from Portland metro who tire of the overcast and drizzle and move to the sun but don't want to leave the state. California buyers for sure impact but there is certainly a lot of organic Oregon buyers as well . its well known that CA transplants to Oregon and Washington is been a huge driver ( I am one ) but that has slowed a lot since the rise of values in Oregon and Wa. values here are akin to Sacramento type market and the gold country .. where in the past there was a huge price difference .. but again nothing compares to values from Los Gatos to Menlo Park when it comes to price per sq ft of housing . Although Seattle rose a ton and is very close to the same values.
I mentioned Amazon and MS for that reason. As those companies broke down offices folks from Seattle and Portland, big offices, they moved. So yes not just cali.
Since you moved to the area I know Bend I’ve had my eye on for years since Mt Bachelor is a great mountain. I’m sure you can confirm while Covid accelerated it was already growing nicely pre 2020.
as a quasi ski town its certainly not as expensive as Aspen Vail Park city prime Tahoe etc. its not like any of those areas one of the big draws is golf and just living in the high desert with a ton of sun.
It's not but has grown a lot in values over the last 5 years. I sort of wished I had hopped into it early I just wasn't ready to work part year somewhere with my wife's job (can't convinced her to quit). But yes super cheap compaed to the big ones and the big ones got more expensive with the zoom piece.
@Carlos Ptriawan obviously remote work has changed things. but it's not going away and likely to increase. Quite a few Fortune companies are planning to not renew leases which will also push up remote work as they cut down on the attempted force back to office.
Also it's why the west coast is experience more of that pain. However, FL which has been a huge relocation doesn't seem to be expeirncing the pain. But it's mostly Northeast money.
Texas got both coasts and ending up with a mixed bag. I really think the combination of tech stock bubble hit + high rates is going to leave this downturn very much an east vs west coast recession. Assuming we can not have Credit Suisse pull a Lehmans.
Quote from @John Carbone:
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
And everyone in that town is still going to wake up tomorrow having lived through a “crash” and it won’t matter other than the fact they can’t call up their bank and get a heloc. Their phantom equity disappeared, but life goes on unlike in 2008. Prices dropping on low volume, as I suspected.
Quote from @James Hamling:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing.
I don't understand the rationale behind comments like this. Why in the world would we try to pretend that the conditions 50-100 years ago are the same as we're seeing today? And why would we pretend that these historic events and the economical environment back then are somehow analogous to what's to come in current times?
America right now, and our economical conditions show very few similarities to the America of the 40s, 50s, 60s, 70s, 80s, and 90s. We are in unchartered territory. To think that we know what's coming next because "x" happened a century or a half-century ago is nonsensical.
We just exited a global pandemic, the stock market is in free fall (Dow closed the worst September in 20 years), we've printed so much money that the dollar is on the brink of collapse, we just exited a time of true historically low mortgage rates which created a massive housing bubble, hyper-inflation is raging out of control which has caused the fed to raise the interest rate through the roof, and mortgage rates have more than doubled in the last few months.
What we're seeing now has never happened before in the history of our country. Nothing that happened 50 or a 100 years ago is an indicator of what's going to happen next.
And of course we should learn from the past and our history. But we should also learn to know when we're seeing something that we haven't encountered before.
I am just trying to figure out your angle, what your slinging, where the profit is in selling the end of the world to lemmings?
Your entire rant had nearly 10% of truth and fact to it, nearly.
The stock market is not in free fall, where are you plucking this from? Today was one hell of a rally actually so funny that on a wildly green day you've decided it's in "free fall".
Your clearly just making things up. You decided the entire storyline and just sticking to it. So there is 0 point in any form of sense, your going to just deny any facts or info that refutes your fear-porn.
So go ahead, freak out, blabble away.
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Quote from @Greg R.:
Right, but that's my point. We're seeing a pretty similar path between the housing market and the stock market. The Dow was +/- 29k before the pandemic. Like the housing market it bubbled/ peaked up and has since dropped down to close to pre pandemic numbers. I should have specified that my point was regarding all of the gains made during the inflationary bubble, so basically everything from the pandemic forward.
I believe we're going to see a similar outcome with housing prices, they'll return close to pre pandemic numbers.
Quote from @Joe Villeneuve:
I went back and read some of the comments added since I last made a comment of my own, and looked at the number of comments posted (WOW!!! 30 pages worth), and the first thing that came to mind was...food fight!!
#1 Market Trends & Data Contributor
So the US financial drama in the last 2 years we could say like this :
Episode 1: Covid in China ---> Massive Lockdown --> Business closing down --> Stock crashes ---> Fed Prints money to trigger economy --> Tech Stock melts up --> Remote worker started --> Folks moving out of city ---> Home Price going up especially in the west coast ----> vaccination started
Episone 2: Vaccination is succesful --> Inflation rising ---> Fed started increaseing interest rate ---> Stock market crash/Crypto crash ----> inflation is rising even higher ---> Fed increased the rate ---> Partial Home Price Adjustment ----> UK/Europe collapsing ---> IMF/UN asking Fed to stop the rate hike ----> [ unknown ]
Episode 3: [we are here]
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Quote from @Greg R.:
Quote from @James Hamling:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
....the stock market is in free fall.... ...the dollar is on the brink of collapse... ...massive housing bubble, hyper-inflation is raging out of control....
---------------------------------------------------------------------------------------------------------------
LMAO! Your kidding me right Greg, which of those are not true? ALL of those!
The stock market is NOT, was not, has not been in free fall. MATTER OF FACT we are entering consecutive days of BIG gains. Welcome to how the stock market works. Rates go up with Fed saying they will do it to point of making a recession YES we in the market price it in for a recession, over-selling happens which "Yee-Haw" cause boy-oh-boy did I snag some awesome buys!
The dollar is NOT on the brink of collapse. Please Greg, give a shred of evidence for this, just 1. And your opinion is NOT evidence, your feeling is NOT evidence. Please, learn the difference between FACTS and feelings. Like any good lie, built on a foundation of truth. The dollar is coming into competition as world reserve currency but far FAR from collapse.
I am not even going to touch the housing bubble, because you just keep making things up and are going to just keep calling it a bubble. please review the definition of such, it's not when pricing elevates and there is high demand and low supply, that's the very opposite of a bubble.
HYPER Inflation, in the U.S.A., no kidding huh?! So, when? Where? Do you even know WTF hyper-inflation is because that is the most moronic FALSE statement of all because all of us in the USA know, 1st hand there is NO HYPER-INFLATION! Again, your just making things up, that is a 100% fact here.
There ya go buddy, your words, factually not true. As I said, as much as 10% of truth, 90%+ manure.
It begs the question if you actually believe such insanity my friend? If you live in some kind of eco-chamber of nuts nonsense from some tinfoil hat club, to the point where one see's bogymen around every corner, thinks ridiculous things like were in hyper-inflation and next week it will take 4 chickens to get a gallon of gas and you'll be surviving of what you can forage and hunt blah blah blah que the assorted prepper sales commercial.
You do realize Greg, all those gurus of doom you watch, they are using you as an ATM? Your a sheeple to them, a useful idiot. They get you pumped on fear-porn to then drive to buy assorted junk not needed, will not use, but it itches that fear-porn scratch. Don't believe me, as any prepper from 2009 and after! They got F'd and used. Building bunkers, stockpiling all kinds of BS, for nothing. They were certain the end was "just around the corner", turns out they meant end of their life savings. But hey, they got some nice freeze dried meals for the next 20 years.
- James Hamling
#1 Market Trends & Data Contributor
Quote from @Greg R.:
Quote from @Joe Villeneuve:
I went back and read some of the comments added since I last made a comment of my own, and looked at the number of comments posted (WOW!!! 30 pages worth), and the first thing that came to mind was...food fight!!
Yeah, what we're seeing is the last two years are like the History of the world from 30 years is accelerated into a few months. Everything is moving too fast and is hard to decipher.
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
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Quote from @Carlos Ptriawan:
This is probably in your MN market James, In a low cap rate market like CA, the renting cost is still much cheaper than a mortgage. For 3k BR one can find rent in $2.5k-$4k range but to pay the mortgage it is $4.5-6k.
But this is another indication that like @Michael Wooldridge said, the price adjustment perhaps is affecting more in the high cap rate market in the west coast only like CA/WA/NV/CO and even AZ(?).
One thing that's interesting from Michael and Blackknight data is "why this time, price adjustment mostly occur in West coast property ?"
Not even NY is having the same adjustment(need to research on this).
People are getting way too tangled up in confusing specific markets with a national general "Market" status as in the whole of U.S. Real Estate market.
As has been said at least 20 times in just this thread alone, THERE WILL BE MARKET SPECIFIC DEVIATIONS. Maybe i am using language many don't understand? This simply means a specific markets have there own unique factors and will see some different changes as compared to the national average.
I keep being very specific, when I call out a specific market such as Twin Cities I say to that specific detail. When I speak on nationally I speak to that.
What said in CA with things being reversed of renting less then ownership, great example of a market specific deviation from the average. THAT is a market primed to heavily concentrate as a renter market.
Still, the generality I spoke of will be the general standing of things.
The "American Dream" is and has been for a multitude of generations HOME OWNERSHIP. That runs DEEP in the American culture, your not going to socially engineer that out in a few months or years.
The general psychology of it all is:
Sellers are most risk averse, in contrast to buyers. Why? Because sellers have something to loose. Buyers are seeking, they are with something to GAIN. It's 2 very different psychological points of origination.
We know by the data and numbers more then 50% of home owners today have locked mortgages at less then 4%. And more then 3/4 of all homeowners with locks under 5%. The psychology of a current home owner is that of LOOSING/RISKING what they have and the question will be, to gain what? To loose that to gain a 8% mortgage? No, this whole structure creates pressure to stay put longer. To hold tight.
BUYERS on the other hand, fun-fact, did you know 100% of 1st time home buyers DON'T have a home there selling to buy a new one? So, they do NOT have that risk/loss psychology, there entire motive is singularly GAIN focused, to GAIN a home, to GAIN housing security. Every time rents go up it reinforces a mental state of insecurity, that the tenant is subject to the whim and will of the landlord. It's a mental reminder they do NOT have security of housing.
Buyers have motive to buy, regardless of mortgage interest rates. The only thing that changes is there budget.
Now yes, a fall off of the transitional home buyer happens, 100%. And we can question how many home buyers are transitional and how many are 1st time, to gauge volume drop. In that again, I call out the net unit SHORTAGE. As well as builders slowing production which simply amplifies that shortage and continues it's duration.
Any argument that we will have a few million empty properties must answer 1 simple basic question; where do these millions of people go? Tent cities? 6million homes equates to roughly 18million - 32 million, MILLION people! That is the ENTIRE population of Texas! All the people in Texas just "poof"ing out of existence. Lol. How realistic is that?
- James Hamling
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Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Well it’s not just the markets, but pressure from the UN to stop, and just today Australia reversed course, coupled with last week BOE, and also today the JOLTS report showing a 1.1m drop is exactly the data the fed was saying they needed to see. 10 year treasury is off almost .50bp from peak, so the market is doing the feds work for them with lower rates. Regarding gas, It’s $7 out in your world but it’s around $3 where most people live.
I’d expect another 75 hike next month but with guidance suggesting they will slow down after that.
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Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Fed is going to change course again. They have to, or should say, will have to.
Rates drop to 6%, and especially if they touch a drop under 6 guess what happens next? What do you think everyone who was on sideline for last months, year+ does? They will run, RUN to the assorted bankers and agents to rapidly get a home "before rates go up again". Consumer psychology 101.
And what would a buyers rush do? Yup, more inflationary stress, yet again.
And J-Pow says "we let off too soon" and the ever so reactionary Fed, well it reacts.
Welcome to the "new normal".
As side note, why is the "new normal" a "new normal" every few months?
- James Hamling
the reality is next 30 days on the market are going to be interesting to watch. The whole world and US economy are sort of holding their breath.
- Not clear if fed is backing off 75 basis point increase for this month. Their statement indicates a maybe.
- World markets are crashing far faster than the US. Ultimately fed loses if they crash world markets. SO maybe we get a slight pause to see whee things go.
- Credit Suisse is another factor. If that crashes and has a Lehman/Merril Lynch moment than that has big time global impact. It’s too big.
- Russia rhetoric is amping up and we hit winter months.
Trying to predict right now is impossible but next 30 days should be telling.
#1 Market Trends & Data Contributor
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Holy cow, I've not read this news.
https://www.cnbc.com/2022/10/0...
it may trigger the Fed to change course; let's see...
#1 Market Trends & Data Contributor
Quote from @James Hamling:
As side note, why is the "new normal" a "new normal" every few months?
Because we know in the new world, the abnormal is the new normal. LOL
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Holy cow, I've not read this news.
https://www.cnbc.com/2022/10/0...
it may trigger the Fed to change course; let's see...
Lol. I wasn’t expecting August to be that far down but there are mor lay offs planned. Been saying it the tipping point is here. This is good news from my perspective because fed does need to slow down. This paired with the global markets should get them to pause at least and see what happens.
#1 Market Trends & Data Contributor
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Holy cow, I've not read this news.
https://www.cnbc.com/2022/10/0...
it may trigger the Fed to change course; let's see...
Lol. I wasn’t expecting August to be that far down but there are mor lay offs planned. Been saying it the tipping point is here. This is good news from my perspective because fed does need to slow down. This paired with the global markets should get them to pause at least and see what happens.
Told you man The Fed rate 4%/mortgage 7% is equal to depression in the world.
The BRICS countries are already dumping dollars and trading more bilaterally using non-dollar currency.
First time in the history of modern human existence.
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Markets are pricing in rates cuts now. What a difference a week makes. J-POW finally realized he was breaking the economy, housing included. I’m adjusting my forecast to 20 percent now instead of up to 30 percent. Rates are already starting to come back down, should be In the 6’s soon. As I always said, I follow the fed and markets on interest rates, if they change course I need to change course.
Do you have a substantial reason other than the stock market?
The market could just rebound because there's no more sell-stop order to hit hence the bounce, but I have not seen any statement from Fed that indicate they will pivot in a short time.
Gas price again is seven bucks, CPI will be higher this month. And Europe is entering winter.
Holy cow, I've not read this news.
https://www.cnbc.com/2022/10/0...
it may trigger the Fed to change course; let's see...
Lol. I wasn’t expecting August to be that far down but there are mor lay offs planned. Been saying it the tipping point is here. This is good news from my perspective because fed does need to slow down. This paired with the global markets should get them to pause at least and see what happens.
Told you man The Fed rate 4%/mortgage 7% is equal to depression in the world.
The BRICS countries are already dumping dollars and trading more bilaterally using non-dollar currency.
First time in the history of modern human existence.
Yes strong dollar was always going to be an issue for those countries. But I don’t think any of expected it to hit that hard, that fast. problem is it’s tough to lower inflation without a job market hit here in the US. So it’s like playing chicken and it always concerned me a bit. In fact tthe only real fear I had of really bad economic downturn was if the fed crashed our economy. Otherwise East coast continued to be strong which is where I’m at for all my properties.
Every market is different. Just for context, I bought my first home in May 2007 in Fort Collins, CO for 182K. It was a foreclosure with a small value add by doing cosmetic improvements. I put in 10K of improvements with me doing mostly amateur work. After it was done, it was probably worth about 205K. From 2007 to 2013, I was seeing 1% annual appreciation, but it never crashed. In 2014, the appreciation started to pick-up and it's now worth around 500K. Sales price goes down 5% every winter due to the cyclical nature of summer vs. winter prices.
I do not anticipate seeing any year over year price declines in my neighborhood. However, I could see some prices declines in new construction neighborhoods that are more than 15 miles from the city center.
Thats some solid push back. I have no metrics. But our trade deficit is very high, and I think there are some funny numbers going on (but if you pushed me I can't prove that). I could be wrong here and I will look into this (because I won't shut up about it) LOL. But everything in the stores, my home etc is made somewhere else. In addition I wouldn't be surprised if many of the items in the manufactured index are inflated. For instance a hammer in America is more than a hammer somewhere else because you can get more for it here. I also believe that one of the big reasons Americans don't work is because our culture and society don't require it. If could not bring in all the cheap crap that would change in a hurry.
I agree with you on the facts are whats important and I have doubled down on this so much these facts may be unacceptable to yours truly! LOL. But I'll dig into it this because if I am right what is happening to the nation is a great tragedy/self sabotage, even if I do overstate the case.