patrick.net

Blue says

Can gov pay interest on its ever increasing debt beyond this point!

Good point as I suspect the Fed Funds rate will stabilize around 4.25% from currently at 3.25%.

The 10 year Treasury is 3.8%. It averaged about 2% a year under Obama when he was borrowing $1 trillion annually.

Right now I think debt service is still sustainable for the federal government. Its only about 9% of the federal budget.

https://www.pewresearch.org/fact-tank/2019/07/24/facts-about-the-national-debt/ft_19-07-18_nationaldebt_2/

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This US Treasury site states interest payment is 5% of total federal budget : https://fiscaldata.treasury.gov/federal-spending/#deficit-by-year

The site accounts for all spending including entitlements including Social Security.

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cisTits says

And the Fed owns the largest sungle chunk of it.

Yes the Federal Reserve owns US debt and so does the Social Security Trust Fund. Any surplus of Social Security is used to buy US debt (Treasury bills, notes, and bonds).

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ad says

My guess is that rates will stabilize around 5%.

What makes you say that when at this moment mortgage rates are 7% and the fed say they will continue to raise?

https://www.marketwatch.com/picks/the-major-county-in-america-where-home-prices-just-dropped-the-most-is-01664637133

The major county in America where home prices just dropped the most is...

Alameda County (Oakland, Calif.), which is down 11%;
Travis County (Austin, Texas), which is down 9%;
Santa Clara County (San Jose, Calif., which is down 8%;
Contra Costa County (outside Oakland), which is down 7%; and
Fairfax County, Virginia (outside Washington, D.C.), which is down 7%.

pudil says

Cost to build is sky high.

For now, but building supplies are trending downward (like lumber). Garage door and windows, etc will become available if they aren't already.

pudil says

Who has to sell? This isn’t leveraged out the ass flipper owned properties like 2008. Everyone is working remote. Cost to build is sky high. Sorry you didn’t buy a house in the last 12 years, you missed your window.

Only way house prices decrease significantly is if there is a massive recession. In that case you won’t be able to get the financing to buy anyways.

I just bought a house a few months ago and I knew it was at the peak, but I had more important reasons to leave CA and start elsewhere. I think you underestimate the probabilities of a job-loss recession with the record pace of monetary contraction that the Fed is driving. Having said that, the most desirable areas will always have demand which is why location matters so much especially in times of recession.

https://archive.ph/no8v3

'Big Short' analyst says Florida home values could drop as much as 50% in some areas when markets factor in flood and storm costs from disasters like Hurricane Ian

Lee County, which includes Fort Myers and its suburb Cape Coral in southwest Florida, was home to one of the biggest disconnects between what homeowners were paying in flood insurance and what insurers should be charging to cover their risk, DeltaTerra found. In an analysis the firm shared with investors in May 2021, DeltaTerra estimated that single-family home values in the metropolitan area could fall by between 32.3 and 52.8% once the market correctly priced in flood-protection costs.

Fort Myers was squarely in the middle of Hurricane Ian when it made landfall. Now that buyer demand is cooling because of higher interest rates, a reckoning with the true costs of flood protection could make it all the more difficult for its housing market to recover. That would send a warning to other metros, Burt said.

"People actually being exposed to events where they aren't bailed out by home-price appreciation, and you see these problems a year and a half from now persisting — unlike what's happened in previous disaster events. It's a strong signal to other markets," Burt said.

"Once people actually observe some financial harm, that's when they'll start reacting to it," he added.

https://en.wikipedia.org/wiki/Florida_land_boom_of_the_1920s#End_of_the_boom

Hurricanes played a part in ending the 1920s Florida property bubble too.

The 1926 Miami hurricane ended the boom and the much smaller 1928 Okeechobee hurricane made certain it was extinguished. The 1926 hurricane destroyed "whatever public enthusiasm for Florida vacation properties and real estate development that remained," as there had been little preparation for the storm.

In 2006 there were four storms that crossed Florida. I think it was 2006. After that insurance doubled for everybody not just the areas that were hit. People could no longer afford the mortgage payment with the new insurance on top of it and everybody that had bought in the suburbs needed to move closer to work because it cost of gas had also gone up. A lot of homes went up for sale and they were fire sales. And then they were short sales. So don't think that this won't happen again because it is unbelievable the timing.

New Orleans native here. Katrina definitely destroyed housing prices for nearly a decade. Sure, if a storm decimates homes but demand for some reason remains unreasonably strong, then sure maybe housing prices continue to rise. But as someone who lived through that shit show, and had many friends who were natives for generations relocate to Texas after the storm, I can tell you, most people will not want to live in the area after an event like Ian, unless they are true locals, and have all of their family and lifelong friends there. But locals aren’t who drive up prices, transplants are. And transplants don’t have the stomach for living through the YEARS of cleanup an event like this requires. Also, New Orleans is truly one of the funnest and most unique cities in the country, despite it’s pitfalls, so in my opinion worth the bullshit. Fort Myers? Imo not so much.

porkchopexpress says

I just bought a house a few months ago and I knew it was at the peak, but I had more important reasons to leave CA and start elsewhere.

I think you said Nashville area. I don't like that area, but I think you'll do fine there. Better than CA. I don't like the area because bad musicians piss me off. Lots of drunk tourist. You can avoid it if you stay away from Broadway, but downtown Nashville is a shit hole in my opinion. I'd get better BBQ and food in the ghetto South Side neighborhoods in Chicago. Basically Nashville is an over rated binge drinkers paradise.

It has the party atmosphere of NOLA, but NOLA knows it's fucking trash. They own it. I generally like TN though. The Smokies are beautiful. Best spot is Cosby to the East of the park. Way less tourist. I parked my camper there for 4 days because the vacation rental probably had a 30% grade driveway. Almost fucked shit up in a bad way with our car and camper. My fault, but shit was that scary for a minute or two attempting to get the camper up there. Canned ham too, so only 14'. I trailer a lot and that was fucked up.

https://finance.yahoo.com/news/why-home-buyers-may-be-about-to-catch-a-break-141032221.html

Home buyers may finally catch a break

zzyzzx says

https://finance.yahoo.com/news/why-home-buyers-may-be-about-to-catch-a-break-141032221.html

Home buyers may finally catch a break

Nooooooooo!

Crimey. Stock market pile gone up over 4 percent so far in last two days. Dead cat bounce before more downward spiral?

As we know from the abundant illustrations of centralized psychopathic lunacies illustrated by the pre-90's Russian Communism and China, their terrorist policies result in escalating cascades of unintended consequences.

Clif High thinks that all the deaths from the vaccines will cause a lot of deflation by releasing houses from the older people and dead BoomFucks. He claims in his own circles there is massive death and morbidity amongst the older vaxxers (unattributed, of course, except by word of mouth and direct observation). WEF and Fed depend on fiat printing and various forms of inflation to remain viable. Deflation wrecks them. So, the terrorist policies of programmed vax democide will cause what they dread most.

Maybe I'll be able to buy a few beach houses from croaked Silicon Valley libs next year, LOL! There were a few brand new homes off of 41st Street, developed on the ocean. Their timing couldn't have been worse for the release, and the homes are currently being viewed at about 3.2 to 3.3 million or so for two story/2car garage small lot places 2200 to 2600 sq. ft or so. I ferried the wife over to swan about the models, and I really think the two agents thought the places would fly off the blocks. The two we saw looked literally like they were sweating bullets, not happy campers. Price progression on these will be interesting come winter.

Wait, watch pounce for those who have ready cash for investment?

Ceffer says

Clif High

This Clif High ?

https://www.bababam.com/en/delingpole-delingpod-james-delingpole-podcast/202109100405-clif-high

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Ceffer says

Wait, watch pounce for those who have ready cash for investment?

Not sure if we'll have the same amount of blood shedding like we did 2008 to 2011 for housing.

Maybe a 20% drop even in popular areas like northwest Georgia (about 90 to 120 minutes northwest of Atlanta).

From what I've seen of various records like sales transactions on Zillow, that would bring residential real estate back to mid 2020 levels.

The Fed wants to wipe out even the COVID inflation-gains from stocks and housings.

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"This Clif High ?"

Self proclaimed seer of the various Woos. He does have a solid background in data analysis, so even with grains of salt, his stuff is interesting.

Our old house that we sold in CA, still getting Redfin alerts on it, has dropped in price, not a lot though. Mostly due to higher interest rate and seasonal (winter low demand).

Inflation is fucking high, so once rates go down, prices will start climbing IMO. Anything short of nuclear armageddon pretty much guarantees CA housing going up. But after all the fuckery they did I'm glad to have moved on. Some things are worth more than money.

cisTits says

WTF! The housing 'experts' of PatNet painted a world where this wouldn't be happening!

You need to get them two hours before the pot and booze kick in.

Unemployment may be enough of a factor to weaken housing prices

https://www.businessinsider.com/facebook-quiet-layoffs-will-impact-thousands-of-jobs-employees-say-2022-10

https://www.forbes.com/sites/jonathanponciano/2022/10/04/job-openings-post-biggest-drop-in-two-years-in-ominous-sign-for-labor-market

.https://www.cnbc.com/2022/10/04/bofa-says-meta-alphabets-cost-cuts-will-aid-earnings-and-we-agree.html

https://www.bloomberg.com/news/articles/2022-10-03/new-york-offices-to-see-453-billion-in-value-wiped-out-due-to-remote-work
I haven't found an archive link yet.

NYC Offices to See $50 Billion in Value Wiped Out, Study Says

Researchers estimate the value of the city’s stock of office buildings will remain well below pre-pandemic levels given the rise in remote work

We(don't)Work.

https://www.reddit.com/r/realtors/comments/xvqpgu/what_do_you_guys_think_of_the_highlighted/

What do you guys think of the highlighted verbiage concerning the commission adjustment if the offer is less than asking? I don't remember ever seeing this condition in my area. It certainly wouldn't stop me from showing the property, but I'm curious as to how common it is in other areas.

https://www.reddit.com/r/RealEstate/comments/xvkhz5/too_early_to_talk_about_close_assistant_with_the/

Too early to talk about close assistant with the builder? [New construction 6 months out]

Currently building a new construction with a smaller local builder.

Looking at the local market comps have fallen off substantially, and I'm anticipating having issues appraising anywhere near the price that we signed on the dotted line. I think we're down about $100k now and as rates continuing going up I suspect we'll be down even more come close.

While we have savings to make up the difference (within reason) it's not something we would be happy about doing and having negative equity.

https://www.realpage.com/analytics/us-apartment-demand-plunges-3rd-quarter/

U.S. Apartment Demand Plunges in 3rd Quarter as New Leasing Stalls More than Expected

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/xvfl2q/unexpected_payment_increase/

So I bought my first house last year and things have been great. My mortgage was purchased by another lender and now I'm paying the new mortgage company. This is normal from what I understand. I create a login for the new company and it shows next months upcoming payment. It is increasing 300$ more monthly.

I called and asked about the increase and they said it was because of taxes. I know I have a fix rate that cannot change, therefore my mortgage should change for the life term of it. I called the tax department and they confirmed every 5 years, they re-asses the property value and my property value increased by about 60k. I asked why and the tax agent stated its due to the market conditions and what surrounding properties are selling for.

All knowing eye of 'Christine' on Telegram:
"What are the odds. 3 huge financial news stories hitting on the same day.
Can we connect some dots?
Phil has previously done this.

Story 1

https://www.federalreserve.gov/aboutthefed/boardmeetings/20221003closed.htm

Emergency meeting behind closed doors for the Fed today.
Is the meeting about inflation?
Get more aggressive in rate hikes or pivot and slow them down?

Or, as I suspect the meeting is about story 2?

Story 2

https://www.cnbc.com/2022/10/03/credit-suisse-seeking-to-assure-investors-amid-financial-concerns-ft.html

Credit Suisse is on suicide watch. It’s broke and desperately needs to raise capital.
If it goes belly up then it will take Deutsche bank with it then contagion panic sweeps Europe and begins the global debt system collapse.
They desperately need cash injections and some form of bailout.

Story 3
The price of silver spiked up this morning.
This is a huge deal.
JPM Chase is the biggest holder of silver and has been the one that has helped controll the metals prices to prop up the dollar.
Suddenly the price jumped up.
But why?
My opinion is JPM needs to raise capital in order to help bail out Credit Suisse because all these corrupt banks are broke and if one big one goes down they all do.
So they pushed the price of silver way up in pre market when volume is low so they can sell into the rally to raise capital.
Why do I think that?
Look at the chart.
It “gapped” way up at the open.
Stocks always fill the gaps which tells me this rally is short lived and probably won’t make it through the end of the week.
It will go back down and fill that gap down at 17.77 fairly soon.
But this is a good sign. The global debt system is panicked and on the brink.
Same wig with the stock market that gapped up today.
Dead cat bounce."

I don't see any significant reduction in house prices yet, except for those who tried to fetch sky high amounts for their shacks and are not thrown back into reality in a more competitive market with lesser buyer (or people qualifying to buy). Maybe a 5%-10% reduction from the top so far in select CA areas.

In my hood the prices have come down maybe $75k on average. However, only 4 sales occurred in the last 30 days. 12 homes on the market. It’s a small neighborhood. Avg for 3/2 is $900k right now. A two story like mine is $1.1-1.2 depending on size/upgrades.

It will drop more. Betting another $75k before it hits a bottom. And I’d predict more except for the inflation.

Does anyone recommend SFH/Apt investment in CT near Hartford or New Haven preferably to beat SP500 index. I know someone who lives and bought an investment propertiy few years ago, says the market is mild and swings are much less in either side.

Blue says

Does anyone recommend SFH/Apt investment in CT near Hartford or New Haven preferably to beat SP500 index. I know someone who lives and bought an investment propertiy few years ago, says the market is mild and swings are much less in either side.

Always heard that area was a real shit hole.

Mortgage Application Pace Plunges To 25-Year Low As Housing Recession Deepens

https://www.zerohedge.com/personal-finance/mortgage-application-pace-plunges-25-year-low-housing-recession-deepens

Shaman says

Always heard that area was a real shit hole.

most of connecticut is a shithole ...its the mississippi of the northeast ... greenwich and mystic are okay but that's about it ...

iShares US Home Construction ETF

December 2006: $43
February 2020 : $50
Dec 2021: $83 (all time high)
June 2022: $49 (recent bottom)
current: $56

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