patrick.net

Existing home sales numbers came out today.

The volume sucked. The median home price reached an all-time high for the month of January, and the percent of people paying all cash was 32%.

AmericanKulak says

AD says

The starting hourly pay is $16 for entry level such as at The Blake (nursing home and assisted living), Walmart Front Beach Road, Pompano Joes and Bay Point Resort, plus expect to work overtime or about 50 hours a week from early May to mid September. They usually increase the hourly pay to $18 in 3 months.

That's $2560 / month pre-tax/pre-health and other withholds.

Let's do a very generous $2250 after tax and benefit contributions.

If it's $700 to split a 3bed, that leaves $1550.

Then add phone, electric: $100

Now down to $1450

How much is groceries if you ate every meal in? $500 if you're super frugal and never eat out.

The service workers (i.e., restaurant, hotel, etc.) in my townhome community about 2 miles from the beach in Florida panhandle are making at least $18 an hour now.

They pay no more than $130 a month for a bronze plan with subsidized Obamcare since their "Modified Adjusted Gross Income" (M-AGI) is no more than $35,000. Usually they work 50 hours per week (i.e., 12 hour days on Thursday-Saturday) during season and 30 hours during off season.

Roughly one-third of the M-AGI goes to rent and utilities.

So they have about $1944 in pre-tax or gross income per month after rent and utilities.

Net 10, Mint , etc have no more than $20 plans per month for unlimited phone and text.

Groceries should be no more than $10 a day regardless if they get free meals where they work.

A rotisserie chicken at a local Publix (i.e., high end) is around $7.15 and lasts 2 days for 2 people.

A lot do not have cars and drive mopeds or use a bicycle as they are only 2 miles from the beach job centers. Also we have public transportation (i.e., bus service).

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AmericanKulak says

Biden going to be giving away more money like student loan forgiveness freebies all the way to this November. It will lead to more inflationary pressure.

"The Biden-Harris Administration has fought tirelessly to provide borrowers the relief they have earned. In total, the Administration has now approved debt cancellation for nearly 3.9 million hard-working Americans totaling almost $138 billion in relief."
++++ US Dept of Education

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@AmericanKulak,

Great analysis on the cost of living and salary. SFAce used to break down similar numbers on the cost of living and housing prices and why some people bought and lived where they did, and why the Bay Area keeps attracting top talents even with expensive cost of living. Bravo 👏👏👏

AD says

So they have about $1944 in pre-tax or gross income per month after rent and utilities.

Net 10, Mint , etc have no more than $20 plans per month for unlimited phone and text.

Groceries should be no more than $10 a day regardless if they get free meals where they work.

A rotisserie chicken at a local Publix (i.e., high end) is around $7.15 and lasts 2 days for 2 people.

Still $300/month in groceries alone.

As for the Publix Rotisiere Chicken, you'd die just eating that alone. It's only 1260 calories, about half the daily necessary calories for a sedentary male. No Mayo? No Mustard? No Potatoes? No Bread?
https://www.publix.com/pd/publix-deli-original-oven-roasted-chicken---hot/RIO-HC1-119882

I'd say $15/day is more accurate. That's $450/month, eating every meal at home and being very thrifty with meal planning, measuring portions, few and not expensive snacks, no expensive condiments like Pesto or Siracha, 1 daily cup of coffee, not much if any drinking, etc. The minimum to eat at home comfortably is closer to $500/month. I see families of 4 with a $300 weekly grocery bill, and there you're getting economy of scale. Publix Subs are great but still $7 and up, and around 1200-1400 calories.

Where's the car payment (keeping in mind almost nothing is immediately drivable under $10k), car insurance, gas? Easily another $500 absolute bare minimum with excellent credit and a downpayment (which 20 somethings starting out don't have much of either), car ins. and gas if the place is around the corner.

AmericanKulak says

Now, where's that car payment

There is no car payment as most of the service workers living on the beach in the Florida panhandle use a bicycle or moped, and sometimes the county bus system. Some are more sophisticated and have electric bikes. But they live on the beach to only be within a 2.5 mile walk of any potential service job.

AmericanKulak says

I'd say $15/day is more accurate.

No, $10 is more accurate for Bay County, Florida especially the Walmart on 23rd Street in Panama City. I know first-hand from shopping around that $10 per person is very reasonable in the Florida panhandle. The county is very pro active as far as sidewalks and bike lanes.

You can eat well on $10 a day with Great Value, which is Walmart's brand like oatmeal, raisan bran cereal, cannelli beans, etc. 1 egg, wheat toast, and raisin bran cereal for breakfast would cost about $2, a can of Progresso soup is $2.25, and that leaves plenty (+$5) for dinner like a half a rotissiere chicken.

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AD says

There is no car payment as most of the service workers living on the beach in the Florida panhandle use a bicycle or moped, and sometimes the county bus system. Some are more sophisticated and have electric bikes. But they live on the beach to only be within a 2.5 mile walk of any potential service job.

C'mon man. County Bus system in the Panhandle? Walking 2.5 miles or waiting half an hour for the bus in July in 90F 90% humidity and by the time they get to work, they'll need to shower before the Manager would let them approach customers. The ladies would be looking like Tammy Fae Baker by the time they walked or waited for the bus, and have a 6 inch sweat spot on their pits

AD says

No, $10 is more accurate for Bay County, Florida especially the Walmart on 23rd Street in Panama City. I know first-hand from shopping around that $10 per person is very reasonable in the Florida panhandle. The county is very pro active as far as sidewalks and bike lanes.

You can eat well on $10 a day with Great Value, which is Walmart's brand like oatmeal, raisan bran cereal, cannelli beans, etc. 1 egg, wheat toast, and raisin bran cereal for breakfast would cost about $2, a can of Progresso soup is $2.25, and that leaves plenty (+$5) for dinner like a half a rotissiere chicken.

Are they walking to the Walmart and Publix too in that heat and carrying those bags home? Or a 2 hour round trip just to get there by taking the bus (.5 hour wait + .5 hour drive because stops, then back)

And GMO corn syrupy, soy oil laden hell is in that Great Value?

AmericanKulak says

Publix Subs are great but still $7 and up, and around 1200-1400 calories.

Great Value wheat as well as honey wheat bread is $2 at Walmart. That lasts at least 1 week for 1 person.

You can get 2 pounds of Great Value cooked ham for $6.50 at the Walmart on 23rd St in Panama City.

I like going to the 23rd Street Walmart because there is usually a Pentecostal preacher with a megaphone on the sidewalk entrance who puts on good preaching.

The preacher's van with Alabama license plates has a few bumper stickers like "My Church Allows Dancing With Snakes" and another sticker says "F&%$ Biden".
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Hey listen, I ain't saying Great Value isn't cheap, but I can't imagine the corn syrup filler hell that it that bread. I do shop at Dollar Store, but for things like Boxed Milk ($1.25)

All I'm saying is, it's a lousy life to have to take county buses to do anything in 90F 90% humidity.

My mass transit is fine, it goes up and down A1A like clockwork - but only on the beach. Try taking a bus to the mainland and you're talking half hour waits, and a half dozen stops with a half hour or more to get where I could get in 5 minutes by car, 10 during the weekends or rush hour.

AmericanKulak says

Are they walking to the Walmart and Publix too in that heat and carrying those bags home? Or a 2 hour round trip just to get there by taking the bus (.5 hour wait + .5 hour drive because stops, then back)

I'm telling you they use their bikes with baskets, and many have electric bikes which are getting more popular here. They can ride on sidewalk as long as they go less than 15 miles per hour.

There is a Walmart about 1.5 miles away from our townhome community and a Publix about 2 miles away.

Hottest it gets is typically 90 degrees and 63% relative humidity during July.

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I think you're grossly undervaluing the utility of a car.

A 3 mile round trip carrying Groceries in a Florida summer (and having to cross at least one very busy road/street) is brutal, and waiting for a county bus, well the bus stop doesn't have AC. Many don't have a roof.

Look, I've gotten $1500/month for my studio, which I think is insane. $31k was no great income 20 years ago when most daily needs were 1/3 the price.

AmericanKulak says

I think you're grossly undervaluing the utility of a car.

A 3 mile round trip carrying Groceries in a Florida summer (and having to cross at least one very busy road/street) is brutal.

You do not need a car to live and work on the beach here in the Florida panhandle. I see this firsthand with a lot of the tenants of the 3 bedroom townhomes in my community who do not have automobiles and rely on electric bikes. They only work 2 miles away and the stores are within 2 miles distance as well.

AmericanKulak says

Look, I've gotten $1500/month for my studio, which I think is insane. $31k was no great income 20 years ago when most daily needs were 1/3 the price.

The 3 bedrm townhomes in my community are renting for about $2200 a month. Figure conservatively that utilities are about $300 a month. So its only about $850 a month per person for 3 people renting a 3 bedroom townhome.

The problem is you are seeing everything from your South Florida perspective just like Eman is fixated on San Fran-sicko, and not from the best place on Earth, called America's Riviera, American Paradise, or Emerald Coast (i.e., Florida panhandle).

I don't think you are the poster Ten Pound Bass who is a sage Patnet member from South Florida.

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AD says

You do not need a car to live and work on the beach here in the Florida panhandle. I see this firsthand with a lot of the tenants of the 3 bedroom townhomes in my community who do not have automobiles and rely on electric bikes. They only work 2 miles away and the stores are within 2 miles distance as well.

I don't see that in my beach community. My last tenant worked at a beach store (which is literally two blocks away and I've walked it) and couldn't have made more that $18/hr tops, and had a car.

I'm not trying to be a prick here:

We're having a conversation about a 20-something being able to afford any car in a non-metropolis area of the USA. That would be a given for any 20-something that didn't live in LA, Chicago, or New York in the Post-war era. Hell, something they got working a p/t job in HS after a short time. If we were doing this in 1980, 1990, 2000, or 2010, the fact a 20-year old server had a car would be a given, unless she lived in a Big City.

The decline of living standards in the USA is such that we're talking about this.

AD says

The problem is you are seeing everything from your South Florida perspective

I'm not in South Florida, I'm East Central. Daytona-Melbourne. A place where 5 years ago, before I returned to the states prior to COVID but was thinking about it, there were 100s of standard 3bed/2bath homes in the high 100s for a 60s Space Program Ranch /low 200s for more recent on the market. Hell, in 2021 during Covid you could rent a 3/2.5 Satellite Beach house a few blocks from the beach for less than $1800/month. Next to @Patrick SFB. Yeah, they're no longer AFB.

I brought my studio for ~65k in the mid 2010s. You can't find a studio under $150k now.

EDIT: $160k, and those are in the Crack Canaveral area, a few blocks of converted Army Missle Range Barracks, the only 'bad' part of the area.

The housing is too damned high.

And it's going to collapse.

AmericanKulak says

The decline of living standards in the USA is such that we're talking about this.

Back in 1993 when I was first stationed at the NAVSTA here, it was cheap living and high standard of living. You could afford to rent your own home and not need roommates.

Its gotten worse as far as living standards because of the investors (i.e., Eman, Blackstone, Blackrock, etc.) who have driven up residential real estate and treat housing like it is stocks.

But the standard of living is a lot better here in the Florida panhandle than it is in San Fran Bay Area.

By the way, when I was living in the Washington DC metro area, a lot of my friends lived in Dupont Circle and Adams Morgan and did not have cars.

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AmericanKulak says

Next to Patrick SFB. Yeah, they're no longer AFB.

Its Space Force, not an Air Force base. I use to live not far from Patrick AFB about 5 blocks from Ron John and the pier.

Yes, I have a buddy in the Panhandle, it's probably one of the better places. I'm not super familiar with it.

Eventually, and it's not possible due to family issues, would like to be in North Florida. Between Talahassee and Jax closer to the GA border for the 3 season and cheaper land.

I remember in the early 90s you could buy a brand spanking new 3/2 on a quarter/fifth acre in Central Florida for $70k. Boxy bland ranch, but still. And there would be maybe 3-4 houses on the block. Now they're selling in the mid $200k and up, over 300% appreciation, and their newer equivalents are zero lots and $300k+

Cheap money causes pain.

AD says

Its Space Force, not an Air Force base. I use to live not far from Patrick AFB about 5 blocks from Ron John and the pier.

Yep! They just changed the last of the signage a few months ago, finally.

I really can't complain living half a block from the beach. It got in the 40s many of the past few nights, though. I don't remember that, but then again, I was coming from a colder place.

That and I got to see the record 2 of 3 spaceX launches in 24 hours (the third was at Vanderburg)

In any case, we're getting there:

https://www.zillow.com/homedetails/415-Blue-Jay-Ln-2-5-Satellite-Beach-FL-32937/2056105604_zpid/

Originally listed a Aug 2023 at $359, now $299, or ~$250/sqft to ~$210sqft. Still too much, and not for me with the bedroom quantity and non-enclosed back space where I'd probably get shit for putting out a potted plant much less a Square Foot Garden. Wonder what it went for 10, 20 years ago, cause it ain't a new building and probably 70s-80s with the Dunkin Donut/Pizza Hut roof (forget what that is called).

In any case, it's !!!Happenning!!!

As much as I hate the POTATUS, some form of debt relief is necessary. Hell, even the Babylonians (Hammurabi ring a bell?) had 7-year periodic debt relief. Granted, debtors back then were literal slaves and treated like animals.

I'm hoping the debt relief will free enough people to risk taking on the gubment. It almost feels like the terminal phase of the Soviet Union, when everything was in slow motion collapse, and Gorbachev kept trying to incentivize the population not to rebel.

Hey Hey Momma, goin' down, goin' down





MUH APPRESHIASHION!!!

Seriously, this house is no more than $240k inc. inflationary past few years. $250k if it was updated and improved from the early-mid 90s build it appears to be

AmericanKulak says

That and I got to see the record 2 of 3 spaceX launches in 24 hours (the third was at Vanderburg)

“Vandenberg”

ForcedTQ says

“Vandenberg”

Right, the minor lesser, little used one whose name I forgot in tandem with it's importance. ;)

Looks like the latest housing prices came in today. Another record high. 5.5% year over year increase in prices.

Go figure.

https://finance.yahoo.com/news/home-price-growth-us-accelerates-140000941.html

Misc says

Looks like the latest housing prices came in today. Another record high. 5.5% year over year increase in prices.

Go figure.

https://finance.yahoo.com/news/home-price-growth-us-accelerates-140000941.html

Not sure if it is that home sellers like DR Horton are buying down mortgage rates and its not reflected in the sales price ?

A lot of times you don't know if cash was given to the buyer unless you see the closing documents. So the price does not reflect that.

Hence, should there be an automate adjustment to the median price that is being reported ? Such as discount it by 5% ?

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AD says

Not sure if it is that home sellers like DR Horton are buying down mortgage rates and its not reflected in the sales price ?

A lot of times you don't know if cash was given to the buyer unless you see the closing documents. So the price does not reflect that.

Yup. Wolf Street covers that.

https://wolfstreet.com/2024/02/26/prices-of-new-houses-v-prices-of-existing-houses-why-sales-of-new-houses-hang-in-there-while-sales-of-existing-houses-plunge/

Nope these are Case/Shiller prices. They measure the difference in prices for the same houses over time.

Misc says

Nope these are Case/Shiller prices. They measure the difference in prices for the same houses over time.

Not new houses then.

I'll post my prediction again.

House prices will not see any kind of significant decrease. In fact, I believe we will see prices hold and go higher and higher. America is for sure creating a 2-tier economy...the haves and the have nots. The % of have nots will increase. But I do believe that property taxes will go to the moon OR the fed printer will continue to go brrrrrrrrrrrrrrrrrrrr.

GNL says

I'll post my prediction again.

House prices will not see any kind of significant decrease. In fact, I believe we will see prices hold and go higher and higher. America is for sure creating a 2-tier economy...the haves and the have nots. The % of have nots will increase. But I do believe that property taxes will go to the moon OR the fed printer will continue to go brrrrrrrrrrrrrrrrrrrr.

I agree with this. For many years I believed the next crash must bring house prices down, but any industry which is a racket is mostly immune to severe downturns
There are too many subsidies at play for both healthcare and housing, plus the unfettered pressure of immigration, which is why these 2 sectors won't crash.

UkraineIsFucked says

https://wolfstreet.com/2024/02/26/prices-of-new-houses-v-prices-of-existing-houses-why-sales-of-new-houses-hang-in-there-while-sales-of-existing-houses-plunge/

There was a bit of a hold breath moment about 15 years ago when new was holding out while used started to dip. Then it was bombs away.

We could be in that phase now.

The rates dropped a bit but the buyers are staying away in droves. Remember, last year was the weakest year for RE transactions since 1993, when the population was 15-20% smaller and boomers right in the wheelhouse of homeowner/family ages.

Left shoulder and head done. Maybe this summer and fall the right shoulder. it's goin' down. Fundamentals and Demographics can be delayed, but not defeated.



EDIT: Interesting point noticed by Wolf Richter - there's never been a double top in the history of the Case-Shiller. My comments above are me looking at it like other (stock) charts.

"Buy now, before competition resumes!" - spoken to the last bagholder

Wolf Richter
Feb 26, 2024 at 3:40 pm
ChS,

“Home prices aren’t that out of step with CPI”

LOL. CPI Rose by 31.6% over the past 10 years, while the median price of existing homes rose by 97% — home prices rose three times faster than CPI and nearly doubled!!!

30% of office buildings are ‘worth nothing’ and have to be torn down, say experts

https://creditnews.com/economy/30-of-office-buildings-are-worth-nothing-and-have-to-be-torn-down/

I think a dirty little secret is that Insurers, which always invested in large office buildings in Metros and retail around them, are actually raising premiums because their investments are foooked.

mell says

which is a racket

100% IMO. Everything starts there. Debt cannot be allowed to break the economy or cause deflation or be written off (no, it just gets papered over) so, less affordable homes will be built and only homes will be built for the upper levels of society because that is where the $$ is. It costs too damn much to build so, nothing can be "affordable" (look at all the companies starting or talking about dynamic pricing. Why? Entities are looking for every last shred of profit. Nothing can be left for the next person. You cannot have a robust society society wide (or as wide as possible) if nothing is left on the table for the next guy.). So, we will either get social unrest (human nature simply will not sit by and watch a small % of people have everything) or higher property taxes to pay the poor not to rip the country apart or printer continue to go brrrrrrrrrrrrrrrrr. The cost structure of America is too damn high.

Wouldn't it be easier and better to simply ensure everyone has a living wage job? Or is that muh socialism speaking?