All Forum Posts by: Michael Wooldridge

Maybe. For me it’s my day job. My busy season so I’m not going out to do things as I need ot be available but I do have time between meetings or contracts etc… 

Now come winter I’ll be quiet because I play hooky most of January to go skiiing. Same thing in Feb and end of December actually. 

That said your point about staying busy is why I’m delaying retirement. I need enough passive income to spend on a lot of fun things to stay busy :) 
 

Have to kill time between business somehow right?  

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

The problem with the chart is it uses an aggregated number of nationwide houses

However more detail here, if we see the statistical distribution in this chart :

It's easily understood that MoM price reduction changes only occurred in less than 25% of the available market, mainly CA/AZ/WA/NV only. So @James Hamling also has point here saying that his MN market would not be affected even with larger interest rate, as the deviation in the mortgage payment is still within 1 sigma deviation. His market is still at making an all-time high. While CA market price regressed to the 2020 level.

Can’t give James a pass because of his market. Going back 2 weeks he was saying 20 percent nationally was impossible. Nobody on here other than him cares about Minneapolis market. It’s all been based on the national median home value, no cherry picking markets. 

Well then do you not get a pass? If just the markets @Carlos Ptriawan listed have the big drops at 20%. Nationally won’t hit 20% either. Unless you are interpreting James saying the markets wouldn’t drop at all? Which I haven’t seen him say.  

That data Carlos posted though is a double edged sword to both of your arguments. 

 China was still shutting down not the long ago. It’s why the supply chain element keeps coming up. 

Quote from @Greg R.:

@John Carbone @Carlos Ptriawan @Joe Villeneuve @James Hamling @Michael Wooldridge @Bruce Woodruff

Here's some fresh data as of October...

With current rates, buyers have 29% LESS purchasing power.

• - The monthly mortgage payment on the median-asking-price home climbed to a record $2,528 at the current 6.66% mortgage rate, up 49% from $1,701 a year earlier, when mortgage rates were 2.99% and up from a recent low of $2,209 during the four-week period ending August 14.
  
• - Pending home sales were down 25% year over year, the largest decline since May 2020.
• - Months of supply—a measure of the balance between supply and demand, calculated by dividing the number of active listings by closed sales—increased to 3.0 months, the highest level since July 2020.
• - Homes that sold were on the market for a median of 32 days, up a full week from 25 days a year earlier and the record low of 17 days set in May and early June.

You can't tell me that rates aren't having a catastrophic impact on the market and housing prices. 

 People have paused. The fed has made public statements for a very long time that they expect to reduce rates by 2024 (we could even see it in 2023). I believe the rate changes is going to force stagnation. Catastrophic? Cali/west yes. The rest of US not so much.

Also first time home buyers were up. I imagine we will see them continue to purchase because at the dollar value they buy in at - it’s a lot better than renting. Well if not in cali. 

Anyway. I expect full stagnation. catastrophic? Nope. I’ve been saying for a bit overall sales will stagnate. I just don’t think prices will drop catastrophically. Also we need a chart showing how much median decline we need to see to equal about same buying power, to say January-March 2022, with current rates. I assume cali it’s about 20%. Rest of the country less. 

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

 John here's what Fed/you want is the west coast to reduce the price to 20% ; then there is no inflation.
The peak of $1,4k truly doesn't make sense as 6 months earlier it was only $1,2k. This is the result of FOMO buyers
are overbidding property hence triggering inflation.

Yeah and also in vacation markets like tennessee and Florida for example. I agree it’s getting there quickly, 3 more months of this and I think fed objectives could be met. I also think there is upper pressure in inflation from the bottom rung of society. The floor for homes has likely doubled from 100k to 200k as a result of anyone with a pulse being able to make up to $20 an hour. These are likely very “sticky” unless there is a depression with massive layoffs - not what the fed is going for. It’s a bit more complicated though, because food is up a lot (not likely to come down) and have you seen car payments lately? The bubble in the car market makes housing seem sane to a certain degree. I think food and transportation costs are going to drag housing a bit further from baseline levels when all is said and done. 

 Florida and Tennessee have gotten a huge amount of transplants though. I know Nashville and some of that has had some big growth even pre-covid so it’s adjusting (have to go look to how much it is but you aren’t far so maybe you know?) but FL is holding strong. it’s a lot of Northeast money moving down there and at $410k for median home price, in July. Despite the fact they are up al ot I’m not so sure FL is going to correct anything close to CA. Plus the overall impact of interest is just flat out less there. 

 I'm well aware of it. My oldest would be 15 at 55. I've got a fair shot at retiring at 51. Me trying to retire at 43 is unrealistic. But I work from home, have pretty damn good flexibility in my schedule for example I can skip work and go skiing with kids during the week etc... 

The point isn't to be there full time as an adult but to be able to do all kinds of things throughout their lives. And have their own schedules or not I'm pretty sure the kids will be up for playing hooky on school for a 5 days ski trip to Aspen etc.. Thats the flexibility I'm talking about in their teens.

Besides who wants to work to 65? 

 And the big thing is the income. People talk about housing affordability against median income. But if the median income in Cali is $300k (which is probably close for two incomes if not low) even if they spend a lot on the mortgage their disposable is large, even when compared to the midwest markets.