patrick.net

I don’t see how as the costs to build new or rebuild a destroyed house are not coming down….

The bubble will collapse when everyone is fired and they are replaced by robots, illegals, and H1B visa scabs.

The_Deplorable says

We have a Housing Bubble that is roughly 30 years old - started by Alan Greenspan
in the 90s. And this housing bubble is going to collapse! No ifs or buts.

Yes, housing affordability measured as home price to household income ratio, but I believe mortgage rates were not below 6% when Greenspan was
at the Federal Reserve. But low mortgage rates allow for the ratio to increase.

I remember when we got a VA mortgage in summer 2016 the rate was 3% and the bank said the ratio is as high as 5.

We will see how PCE fares, but annual inflation reported by the guvmint remains around 2.5% yet interest rates like 10 Year bond are stuck around 4.5%.

The Fed needs to lower the Fed Funds Rate to 3.5% from currently 4.5%. That is 1% over annual inflation and plenty of safety margin.

With CD's and Money Markets paying 4% or more, this is just making the bond buyers demand at least 4% for the 10 Year bond.

zzyzzx says

https://johncomiskey.substack.com/p/the-looming-impact-of-student-loan

Trump just trying to squeeze as much juice from the orange just like with tariffs and trade deals, as well as cuts to the federal government.

My guess is by end of this year he's going to try to show just in his first year how much he reduced the trade deficit and federal government deficit.

But knowing Trump he'll quickly make changes and adjustments like giving some reprieve with student loan debt if conditions sour that much.

To him its like posturing and arbitrage like making real estate business deals, but in the political space or environment.
.

Explain mortgage rates between 1990 to 2000. Isn't it low interest rates that end up causing the problems?

AD says

But knowing Trump he'll quickly make changes and adjustments like giving some reprieve with student loan debt if conditions sour that much.

You give a student a loan, it's a business transaction is how it should be. Government should have no say in it. Tuition rates would plummet because no lender would give a private student loan. My two neighbor professors have 15-20 kids in their English classes. People aren't going to college unless it's STEM.

My sons at 18 could work for the wife's company for $90k/yr and get 4 months off out of high school AND collect UE and work side jobs like plowing. And yes, nepotism I know. I'd allow them to live at the house until 20 and then they're booted once the job sticks. By 32 they'd have desk jobs with the company or sales. My wife worked on the crew for her first two years, that's how small they were. Just saw the phone tree of 60+ employees or consultants for the company.

I think college is mostly dead. I'd actually hope Trump pulls any Federal backing of loans and removes the BK protection. We all know what professors will be the first to be fired. We'd get kids serious about skill(s) that are needed and not a pet hobby and paint your hair.

College dead? For sales monkeys - sure. How do you do fucking aerospace or civil engineering w/o college? We can't be a country ot sales monkeys while also insisting on doing important stuff in house.

WookieMan says

People aren't going to college unless it's STEM.

Read the comment.

RWSGFY says

How do you do fucking aerospace or civil engineering w/o college?

You didn't read it.

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

Right now Schwab's money market is paying 4.12% : https://www.schwab.com/money-market-funds

USAA is only paying 2.5% , but they always underpay compared to Schwab

.

GNL says

Explain mortgage rates between 1990 to 2000. Isn't it low interest rates that end up causing the problems?

Wow, but yeah I recall getting a 7% mortgage back in late 1998 when I bought a 2 bedroom 2.5 bath townhome with a finished basement (which could could as another bedroom) near Alexandria, VA for around $135,000, which was built around 1985.

Usually the 10 Year Treasury is 1.5% greater than annual inflation, and the 30 Yr mortgage rate is 1.5% greater than the 10 Year Treasury.

.

WookieMan says

WookieMan says

People aren't going to college unless it's STEM.

Read the comment.

RWSGFY says

How do you do fucking aerospace or civil engineering w/o college?

You didn't read it.

Which reduces the bold statement to banal "sales monkeys don't need college". Well, duh! Never did.

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

i’m at 4.5 but likely to move it once it dips below 4. i hate how government completely dictates money moves with their policy of inflation and preferential taxation.

Fortwaye says

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

i’m at 4.5 but likely to move it once it dips below 4. i hate how government completely dictates money moves with their policy of inflation and preferential taxation.

I've always looked at the tax code as a function of social engineering.

Fortwaye says

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

i’m at 4.5 but likely to move it once it dips below 4. i hate how government completely dictates money moves with their policy of inflation and preferential taxation.

which bank currently offers a rate of 4.5%, boy ?

.

GNL says

Fortwaye says

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

i’m at 4.5 but likely to move it once it dips below 4. i hate how government completely dictates money moves with their policy of inflation and preferential taxation.

I've always looked at the tax code as a function of social engineering.

40% of Californians and 50% of New York City residents are on Medicaid. And no, this is not anecdotal.

My guess is when the baby boomer population significantly has died off (a lot are on Medicaid at nursing homes), that we'll see a relative drop in Medicaid spending unless we return to Birdbrain Biden's open border policy with its +11 million "border encounters".

Arizona was not only home to voter fraud in 2020, but also Medicaid fraud.

https://www.kjzz.org/politics/2025-05-20/22-more-people-indicted-in-massive-arizona-medicaid-fraud-scheme-involving-sober-living-homes

.

GNL says

Fortwaye says

HeadSet says

AD says

With CD's and Money Markets paying 4% or more,

Unfortunately, that is changing fast. In the low to mid 3% range now.

i’m at 4.5 but likely to move it once it dips below 4. i hate how government completely dictates money moves with their policy of inflation and preferential taxation.

I've always looked at the tax code as a function of social engineering.

it is. LTCG taxed at 15%, it’s why all money goes there. labor is taxed at much higher rate.

it’s just a crooked system to benefit the wealthy. can’t beat them, invest with them.

AD says

Right now Schwab's money market is paying 4.12%

Thanks, good to know. I see that that is an insured rate (up to to $250K) as well.

Another month's Case/Shiller index came out...I know...I know...another record high.

https://fred.stlouisfed.org/series/CSUSHPISA

Fortwaye says

LTCG taxed at 15%,

The federal long-term capital gains tax rates for 2025 are 0%, 15%, or 20%, depending on your taxable income and filing status.

I was a renter forever. I kept hearing about the imminent crash and it never happened (since 2008). I finally bought 3 years ago at what was seemingly the peak because interest rates were on the rise, but the crash (at least in my area) never happened. Prices have slowly and steadily risen, whilst interest rates are now much higher. If I had chose to rent the last three years, I'd be paying more per month than owning and having to live under the foot of a landlord and without being able to update the house the way I want.

When we moved from CA to TN, I pushed to rent whilst my wife pushed to buy. She was adamant but I thought for sure it was a financial death sentence. I caved when we found a house because she didn't want to leave CA, and I did, so it was the great compromise. Boy, she was 1000% right.

i thought there would be a crash, never happened. although houses did drop about 20% here from peak. either way, in a long run inflation is guaranteed.

just its bigger in blue states, in red houses don’t go anywhere for a long time. we have lots of construction and land is cheaper. funny to watch coastal people buy here and expect appreciation when they don’t get any. i see old houses on market for long time at same price as new construction… they don’t sell.

porkchopXpress says

When we moved from CA to TN

where in TN did you all move ?

as far as your previous post 6426, this relates to what Wookie has been saying as far as sales volume compared to the population, and also how much of a lobby is the local real estate organization

here in Panama City Beach, the Central Panhandle Association of Realtors along with St Joe (ticker: JOE) seem to be in complete control and want to bring in "white professional and hipsters" , so they envision doubling the population (around 200K now) within about the next 25 years

the realtors need growth to drive sales volume, and here that means growth that puts constant strain on infrastructure

whereas Illinois in general seems to have had no population growth over the least 10 years

.

AD says

whereas Illinois in general seems to have had no population growth over the least 10 years

No growth, but to the north, west and south of Chicago they're building again. Cookie cutter cardboard box homes, but they're building.

I think overall TN will be fine. Sideways with a slight drop from highs.

I set and forget the few stocks I hold. Up 500% on FNMA. Got in around 2016 under $2/share. It's been going ape shit since the Trump announcement of making them private again. The government has been taking all the proceeds and keeping enough to let it run. If it goes private it will be a rocket ship. Hit $11 today. Hate predictions, but with inflation and going private I could see higher than $60/share.

May have taken a decade and I don't like gambling, but might have been the best bet of my life sitting on my ass doing nothing. Could be looking at $200k. Didn't see this coming. The market has some trust in lending and real estate. These current loans are cash cows for Fannie and Freddie. They're qualified people. 3 years of payments amortized at 7% interest rate they're in the clear. It would take a 40% crash to lose money.

https://www.fastcompany.com/91341501/housing-market-homebuilder-unsold-inventory-swells-to-2009-levels

Homebuilder unsold inventory swells to 2009 levels: Housing markets to watch

AD says

whereas Illinois in general seems to have had no population growth over the least 10 years

The only people moving to Illinois are Fakefugees and Illegals. While there may be some people who get posted to Chicago by work, they're more than overmatched by the numbers of Boomers fleeing the high tax state.

Only California has a higher outflow rate.

This Congress if it gets off it's ass needs to pass a "No Bailout for State Obligations" law, or CA and IL and NJ will be champing at the bit to federalize their pension and other obligations

AmericanKulak says

This Congress if it gets off it's ass needs to pass a "No Bailout for State Obligations" law, or CA and IL and NJ will be champing at the bit to federalize their pension and other obligations

Chicago is the only problem in IL. IMRF is almost 100% funded. Thats where everyone outside of Chicago gets their retirement funds/pensions.

Chicago has fire, police, teachers and I think some other funds they've underfunded for probably 50 years plus at around 50%. IL as a whole is generally fine. The big 3 pensions in Chicago make the state look like shit because they're so underfunded. Property taxes are high, but it's actually not all that bad.

Getting rid of Mike Madigan has been a huge victory (IL State Senate). He ran the government for about 40 years. I stopped following his legal issues, but they're not small.

I don't like Prickzer, but he's currently the lesser of the previous evil in the state. Madigan was level 10 fraud and was Speaker for the state. 2nd in line as whoever was lieutenant governor would have the given him the governor position. That's the power the guy had. I don't know if it will happen in the next decade, but I could a movie being made about him and the Daley family.

MolotovCocktail says

In our casino and speculative economy, all assets seem to cycle like on a roller coaster ride. How close to bottom are we now ? The current bottom should not be worse as the 2009 bottom.

.

WookieMan says

Property taxes are high, but it's actually not all that bad.

The State of Illinois' general obligation bond ratings, as of recent updates (May 2025), are as follows:

Moody's: A3 (Positive Outlook)
S&P (Standard & Poor's): A- (Stable Outlook)
Fitch: A- (Stable Outlook)

It's worth noting that Illinois has received multiple credit rating upgrades from these agencies in recent years, reflecting improvements in its fiscal health, including budget management and efforts to pay down liabilities.

AD says

The State of Illinois' general obligation bond ratings, as of recent updates (May 2025), are as follows:

Moody's: A3 (Positive Outlook)
S&P (Standard & Poor's): A- (Stable Outlook)
Fitch: A- (Stable Outlook)

It's worth noting that Illinois has received multiple credit rating upgrades from these agencies in recent years, reflecting improvements in its fiscal health, including budget management and efforts to pay down liabilities.

That's why I've been more positive about the economy than others. We got beat up 2009-2020 in IL. Huge population loss. Individual states are going to take a beating CA being the biggie. TN, AZ, ID, CO, TX, FL all likely overbuilt with the inflow. I'd actually throw MT into the mix as well.

States like IL, IA, MI, MO, IN, OH, WI are all likely to go sideways. I don't like the Northeast Coast so I really don't care. You got 5-7 states that are looking at 10-20% losses. Most will be fine. It just brings down the median nationally which is not a good metric.

WookieMan says

It just brings down the median nationally which is not a good metric.

Like any statistic, its just a statistic that needs context. But at least it gives an overall sense of the RE market trend.

I wonder if Illinois population will stay flat for next 10 to 15 years.

I agree as Florida is near the end of the baby boomer cycle as far as those moving down from Democrat shitholes like Chicago suburbs and New F-ing Jersey.

I know that from what I've listened to at the local economic alliance meetings in Panama City Florida, and that is why they have diversified the economy to tourism (within 16 hour drive from Chicago, 5 hour from deep-pocket white suburbs of Atlanta, etc), shipbuilding, the maritime port, HVAC manufacturing, Berg Pipe, electrical switchgear and transformer manufacturing, aviation manufacturing, etc
.

HeadSet says

Unfortunately, that is changing fast. In the low to mid 3% range now.

There's some call protected brokered CD's with maturities up to 3 years with 4.3% on the fidelity website.

I am not interested because of what may to happen to the USD and the rates between now and three years from now.

There's also several 4.3% with maturities in 6-9 months, more to my liking.

AmericanKulak says

Only California has a higher outflow rate.

Whatever it is, it's not high enough. The population way exceeds the capacity of the infrastructure, housing stock, water supply, environment. I don't know what the capacity ought to be but no way it's 40 million. This is the reason for folks bellyaching about the cost of living here.

California's #1 problem is growing humid-temperate crops like lettuce in a semi-arid climate. That's really where the vast, vast majority of fresh water goes.

That and their hatred of density. I was shocked at the distance between LA and Anaheim and how fast it went to SFH and duplexes, without much of a medium density zone. The traffic was among the worst in any city.

San Diego gave me the heebie-jeebies. I got a big "Fake Front" vibe there, like everybody was in a cult but pretending to be normal on the outside.

AD says

In our casino and speculative economy, all assets seem to cycle like on a roller coaster ride. How close to bottom are we now ? The current bottom should not be worse as the 2009 bottom.

Too much cash chasing too few opportunities. The solution is a better standard of living which creates new opportunities.

AmericanKulak says

San Diego gave me the heebie-jeebies. I got a big "Fake Front" vibe there, like everybody was in a cult but pretending to be normal on the outside.

I don't get that vibe at all. It's all tourist and convention people. Then you got military. I don't think there are many life long people living in San Diego. They do pretty good with the homeless living there as well. Not as bad as LA or SF.

It's the best CA city in my opinion. I won't visit LA or SFBA ever again besides a flight layover.

Nowhere near as bad as LA. Never been to SF.

Still, there's a fakey vibe to California I just can't shake.

AmericanKulak says

Nowhere near as bad as LA. Never been to SF.

Still, there's a fakey vibe to California I just can't shake.

Don't like SNL, but there's this: https://www.youtube.com/watch?v=dCer2e0t8r8