patrick.net

It feels to me like Kiesel is right.

I am looking at rent and home prices in the Florida panhandle within 10 miles of the beach. They have gone up about 30% over the last 2 years. They need to go down to spring 2020 levels to make them affordable for the working class. They likely will over correct and drop to 2018 levels.

Stocks are not overvalued much if you compare the PE ratio now to 2000: https://www.multpl.com/s-p-500-pe-ratio?source=patrick.net

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Timing is everything. For my shack, selling in 2006 and buying back in 2012 would have been a bad move... transaction costs, reset Prop 13 taxes, need to rent for 6 years, and the small problem of selling at $900k and buying back at $1MM.

FarmersWon says

On this metric stocks are in huge bubble

Yes, I have followed the Warren Buffet valuation for stocks. Market cap needs to go down more relative to GDP. A lot of the run up is from the significant increase in demand, thanks to monetary and fiscal policies.

The left wing media has been reporting about this. Just look at Tyson Foods stock price and PE ratio.

https://www.theguardian.com/business/2022/apr/27/inflation-corporate-america-increased-prices-profits?source=patrick.net

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FarmersWon says

they will be forced to reduce excessive price increase

I agree. They are pricing beach condos (sleep at 6 to 8 people) at $400 per night (total) here in Panama City Beach. That is what they charged back in 2020 and 2021 with all the unemployment, stimulus, cancel rent, etc. They got to lower that price from $400 to $250 to make it affordable again.

Now all that freebie money is gone and interest rates like the 30 yr mortgage are going up in anticipation of a Fed interest rate hikes.

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I think April/May 2022 could be a peak because it’s just after the last months of pending inventory before the rate explosion.

But I don’t see a decline large enough for it to makes sense to sell/buy and reset a 2012 property tax.

Kiesel is what Italians would refer to as “stupido”