patrick.net

smaulgld says

Call it Crazy says

What's going on now ISN'T a lack inventory problem...

It's a demand problem not an inventory problem.

And an inventory shortage is not the same as a housing shortage.

Why do you say an inventory shortage is not the same as a housing shortage?
If it is a demand problem and not an inventory problem, prices would be collapsing instead of escalating upwards.

Actually it is a problem of demand at current pricing. Remove foreign all cash buyers on the coastal urban centers and there is essentially zero demand.

dodgerfanjohn says

Actually it is a problem of demand at current pricing. Remove foreign all cash buyers on the coastal urban centers and there is essentially zero demand.

That demand is never going away, though, so there is no problem at all.

Housing prices only go up.

Call it Crazy says

They don't qualify for the money they want to borrow.... Period..

Right they can "loosen" credit standards and risk another massive wave of defaults and foreclosures

Strategist says

If it is a demand problem and not an inventory problem, prices would be collapsing instead of escalating upwards.

They have rigged the game- low inventory, low demand but lots of cash sloshing around to create just enough demand to push prices higher. At the macro level demand is atrocious.
The current head scratching situation will soon reverse as an inventory shortage will turn into a glut as more inventory hits the market and demand falls off the table

Call it Crazy says

dodgerfanjohn says

Actually it is a problem of demand at current pricing. Remove foreign all cash buyers on the coastal urban centers and there is essentially zero demand.

Yep... Even with the foreign and cash buyers mixed in, total sales are still down 10% - 20% compared to last year. If these two groups stop buying, and it appears that the cash guys are slowing down, this housing "recovery" goes right down the crapper....

And foreign buyers and investors have scaled back their purchases
They were the most capable of paying the higher prices
The first time home buyer cant

smaulgld says

And foreign buyers and investors have scaled back their purchases

They were the most capable of paying the higher prices

The first time home buyer cant

When the FTHB can, it's time to unload real estate. That would be next year and the year after.

E-man says

When the FTHB can, it's time to unload real estate. That would be next year and the year after.

When the FTHBs can buy homes the economy would have improved and might mean higher home prices could be sustained.

smaulgld says

Strategist says

If it is a demand problem and not an inventory problem, prices would be collapsing instead of escalating upwards.

They have rigged the game- low inventory, low demand but lots of cash sloshing around to create just enough demand to push prices higher. At the macro level demand is atrocious.

The current head scratching situation will soon reverse as an inventory shortage will turn into a glut as more inventory hits the market and demand falls off the table

Who is they? The real estate market is too big for any group to control.

More proof its not lack of inventory holding back the housing market:

inventories skyrocketed: up 41.9% in Phoenix, 28.9% in Ventura, 25.7% in Riverside, 24.8% in Los Angeles, 23.1% in Sacramento, 21.3% in San Diego.

But sales plunged.
http://patrick.net/?p=1241573

Strategist says

Who is they? The real estate market is too big for any group to control.

"they' is mostly the federal reserve and their manipulation of interest rates

smaulgld says

Strategist says

Who is they? The real estate market is too big for any group to control.

"they' is mostly the federal reserve and their manipulation of interest rates

I could go with that.
We can safely assume the federal reserve is not gonna throw in the towel if the real estate market does start dropping. They will make damn sure the recovery continues it's path even if mortgage rates have to go to zero.

Strategist says

I could go with that.

We can safely assume the federal reserve is not gonna throw in the towel if the real estate market does start dropping. They will make damn sure the recovery continues it's path even if mortgage rates have to go to zero.

Correct, the stock market and real estate markets are the cornerstones of their recovery strategy.
But can they get any more water out of those stones?

Call it Crazy says

smaulgld says

Strategist says

I could go with that.

We can safely assume the federal reserve is not gonna throw in the towel if the real estate market does start dropping. They will make damn sure the recovery continues it's path even if mortgage rates have to go to zero.

Correct, the stock market and real estate markets are the cornerstones of their recovery strategy.

But can they get any more water out of those stones?

I though it was "blood"???

They don't need blood or water. All they need is ink to keep printing.

Strategist says

They don't need blood or water. All they need is ink to keep printing.

What many of us question is whether
-the fed can really increase its balance sheet beyond $4 trillion
-if they could whether it would do any good for housing and stocks
http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

smaulgld says

Strategist says

They don't need blood or water. All they need is ink to keep printing.

What many of us question is whether

-the fed can really increase its balance sheet beyond $4 trillion

-if they could whether it would do any good for housing and stocks

http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

I was listening to Yellen yesterday on some points she was making that indicated they could if they had to, but they may have to.
She mentioned inflation was at 1%, while their target was an inflation rate of 2%. Plenty of room for easing just there.
She also mentioned a good labor market even though they have further to go.
She mentioned eventually they would be tightening.
It seems the worst is over, and we can all sleep easy.

Inflation is whatever the government and fed wish it to be
There is inflation in the money supply,housing, stock market, food and energy well past 1% and wages are stagnant.

"good Labor market" is a joke
Part time but then again Yellen couldn't define part time in her first congressional testimony so what does she know about the labor market

Call it Crazy says

Strategist says

I was listening to Yellen yesterday on some points she was making that indicated they could if they had to, but they may have to.

She mentioned inflation was at 1%, while their target was an inflation rate of 2%. Plenty of room for easing just there.

She also mentioned a good labor market even though they have further to go.

She mentioned eventually they would be tightening.

It seems the worst is over, and we can all sleep easy.

You believe Yellen??... OK, so do you also believe the Easter Bunny and Santa Claus are real too??

Are you calling my mommy a liar?

smaulgld says

Inflation is whatever the government and fed wish it to be

There is inflation in the money supply,housing, stock market, food and energy well past 1% and wages are stagnant.

"good Labor market" is a joke

Part time but then again Yellen couldn't define part time in her first congressional testimony so what does she know about the labor market

Inflation is measured by the price changes in a basket of goods which change over time to keep up with changing lifestyles.
One definition of inflation was - a sustained rise in the general price level.
I admit, inflation feels a lot higher then the 1% they say, because almost everything I spend on keeps costing me more and more, especially education and healthcare. So my personal inflation rate is extremely high.
Now, even Costco gas prices are more than $4.00

smaulgld says

You wont see him here

He is invested in his strong beliefs that appear to have served him well up to this point. I don't think he is going to disappear. I think even if he misses the mark at some point, he will be here.

Maybe I am wrong about that, but I think he is no "Jo Jo". I don't see a disappearing act in his future.

bg says

smaulgld says

You wont see him here

He is invested in his strong beliefs that appear to have served him well up to this point. I don't think he is going to disappear. I think even if he misses the mark at some point, he will be here.

Maybe I am wrong about that, but I think he is no "Jo Jo". I don't see a disappearing act in his future.

Last i heard jo jo left his home in Tuscon Arizona for some California grass

smaulgld says

Last i heard jo jo left his home in Tuscon Arizona for some California grass

He has been back in the last few days. He was away working on his taxes. I think he lives in Concord, CA.

Personally, I think you should be right in your predictions. My sense of right and wrong are consistent with what you write and predict. I also see that your ideas are at odds with his.

I do have to respect that he has made some good predictions in the recent past. If you can believe what he writes (and I tend to give people the benefit of the doubt until they force me to do otherwise), he has made some money in real-estate using his beliefs about the market. Of course, we haven't reached the end of the story, but I don't see him hiding out. I guess time will tell.

He, E-man and PKennedy seem to have made some good predictions and made some money. Again, I do't think the craziness of this market is "right" and I do think there is a lot of myth, smoke, and mirrors behind this "recovery", but their predictions and reported purchases do seem to have served them well.

For a variety of reasons, I sat things out from 2009 to until now. It would appear that perhaps I have made the wrong bet. I haven't run off to hide in shame. I think the bet you place in real life is far more costly than the one you make with a stranger on the internet. At the end of the day, all of us have to live with our choices in real life.

I appreciate your posts. I hope things go the way you predict :-)

I started last year criticizing the gains in the housing market as I saw them as unsustainable. I started criticizing bitcoin in late November 2013 for the same reason.
Easy money was made in any asset class from early 2009 -2011.
Gold and silver had mega runs while stocks and real estate were flat. Then they took off in 2012.
All the above rose because of what the fed did after the financial crisis of 2008.
What happens when the fed can do no more?

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

I dont give investment advice just commentary on where markets are headed

My views are largely based on the actions of the Fed and what they might do and what impact it may have across asset classes and the economy
I think they are at the end of helping real estate and the stock market

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

In a safety deposit box.

http://rt.com/news/matress-money-safe-spain-369/

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

Buy home builder shares. You can't go wrong.

Strategist says

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

Buy home builder shares. You can't go wrong.

Because they are selling many homes?

smaulgld says

Strategist says

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

Buy home builder shares. You can't go wrong.

Because they are selling many homes?

Because they will sell many homes. When you hit the bottom, higher is all that is left.

Could be a good mid/long term strategy
but there is a decent amount of existing homes to be sold
A good play might be a home builder that focuses on multi family construction

smaulgld says

Could be a good mid/long term strategy

but there is a decent amount of existing homes to be sold

With such low inventory?

smaulgld says

A good play might be a home builder that focuses on multi family construction

I think you are right. How about high end homebuilders like Toll Brothers?

Mandy Lifeboats says

I just got back from Sam's Club and the one of the ladies handing out food samples asked me how long I've lived in Las Vegas. I told her and said I rent a house not too far from here. She was aghast and said I should buy now before it's too late, and that I've already waited way too long.

I also take all my financial advice from food sample people at Costco and my life advice from the guy sitting next to me in the airplane.

Mandy Lifeboats says

I just got back from Sam's Club and the one of the ladies handing out food samples asked me how long I've lived in Las Vegas. I told her and said I rent a house not too far from here. She was aghast and said I should buy now before it's too late, and that I've already waited way too long.

She is right Mandy, take that advise.

P N Dr Lo R says

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

In a safety deposit box.

WRONG

https://www.texmetals.com/canadian-maple-leaf-gold-coin

Gold, bitchez!!

Strategist says

bg says

I have 5k to invest outside of housing right now. Where would you suggest that I put it?

Buy home builder shares. You can't go wrong.

HOLY SHIT, ARE YOU SERIOUS??.

Did I mention this?

https://www.texmetals.com/american-gold-eagle-coin

Fun to see the answers posted. I will read about multi unit home builders :-)

bg1 says

Fun to see the answers posted. I will read about multi unit home builders :-)

I am doing some research on the DOW vs gold and silver since 1974 -will post here next week

House prices are local again. Nationally they can fall hard while some areas see nice increases.

fedwatcher says

House prices are local again. Nationally they can fall hard while some areas see nice increases.

agree but there will be more areas that fall than areas that do well