patrick.net

MolotovCocktail says

WookieMan says

low priced cities does not drag down national numbers

Yes they do.

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

WookieMan says

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

Here you contradict yourself yet again. You say cities don't matter in determining national numbers yet insist cities be omitted.

MolotovCocktail says

WookieMan says

No 7-8 figure coastal cities and areas do. You seriously think St. Louis even moves the median nationally? We're talking $1-3 on price with a city like St. Louis if even that. It is probably pocket change.

Here you contradict yourself yet again. You say cities don't matter in determining national numbers yet insist cities be omitted.

🙄

If the opportunity cost of borrowing versus saving was properly priced, we wouldn't have massive capital malinvestment and capital speculation at the expense of savings/capital appreciation for the LAST 25 YEARS. The younger generations have no clue about this.

It's all grasshopper and no ants.

The biggest problem in today's housing market is not mortgage rates.

Rather - it's homeowners clutching onto an unsustainable amount of homeowner equity.

Today, homeowners have over $34 trillion in equity on their houses - more than 2x higher than the 2006 bubble.

It's the biggest homeowner equity bubble ever. And it's keeping hard-working Americans locked out from buying a house (because prices are too high).

Sellers who come to market today are often refusing to cut the price to the market-clearing price, and even de-listing their homes. This is further perpetuating the worst housing affordability crisis we've seen in 40 years.

The solution: home prices need to correct, by around 15-20% on a national basis, to bring the market back into balance with homebuyer incomes and interest rates. This type of correction will not be that damaging to the economy, since most homeowners would still have plenty of equity. (in this scenario, homeowner equity would drop to around $25 trillion - still almost double 2006).

It's important that lenders, realtors, investors, and government officials understand that unsustainable prices and homeowner equity levels are what is creating the worst home sales transaction market in decades.

Not mortgage rates.



https://x.com/nickgerli1/status/1952032852419252609

MolotovCocktail says

since most homeowners would still have plenty of equity.

But recent buyers are screwed.

stereotomy says

If the opportunity cost of borrowing versus saving was properly priced, we wouldn't have massive capital malinvestment and capital speculation at the expense of savings/capital appreciation for the LAST 25 YEARS. The younger generations have no clue about this.

It's all grasshopper and no ants.

While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

The government has engineered an impossible rate of return on assets. If the real rate of return is zero, take a guess at what percent of earnings a person would need to make to support 30 years of retirement. That savings rate is impossible.

Al_Sharpton_for_President says

MolotovCocktail says

since most homeowners would still have plenty of equity.

But recent buyers are screwed.

They shouldn't be selling anyway.

MolotovCocktail says

They shouldn't be selling anyway.

They will have the dreaded negative equity and for how long? If they need to sell, they are screwed.

Misc says

While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Al_Sharpton_for_President says

MolotovCocktail says

They shouldn't be selling anyway.

They will have the dreaded negative equity and for how long? If they need to sell, they are screwed.

Which was the case back pre-Boomer/pre-Post War years. Esp when we had gold backed money and thus limits on lending.

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal. They were thus not mortgaged if at all possible. Gold backed money is inherently deflationary so one avoided long term debt.

The land homes were on was another matter.

Now the Demographic Fall Is A Fucking Bitch* Fate Aspect (to reference a popular RPG rules system) is doing what deflationary money used to do. The adjustment is going to be very painful to most...especially given how too many are in total denial. Not just peeps but FIRE^♤, the government, et al.

* Not to be confused with the Fate Aspect called Demographic Collapse Is The Mega Bitch of Mega Bitches. Similar, but unlike the other this is quite terminal. The US at least produced another population bulge called 'Millennials' whose peak savings/investment years will kick in between now and 2035. But after that, we're fucked with the fatal Aspect like Europe, Canada and most of Asia is now.

^♤ Finance, Insurance and R/E. Which we have too much of as a percentage of our economy.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Like all Ponzi schemes it works fine as long as new money is being added into the scheme. The United States has mostly always had a positive savings rate. However, if the savings rate goes negative...well if you have to sell and there are no buyers...the price rapidly drops to zero.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Imagine Glass-Steagal and an end to the Fed Window as a routine borrowing mechanism.

Banks might have to - GASP - offer modest but solid ROI for CDs in order to make loans.

Patrick says

Misc says
While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Or, after WWII, most people (or rather men) who worked for businesses had pensions. These schemes were reasonable because of the financial repression (<2% Treasury rates, 5% mortgages) that persisted until the early 1960's. If you didn't have to worry about inflation, it was easy to set aside money that would pay out over a few decades.

Then came the late 1960's through the 1980's - massive inflation that destroyed pension plans, the savings and loan banks, and the plans of corporations. Boesky et al looted the old school industrial corporations with lots of cash on hand for a rainy day and sold off the carcasses.

It's a globohomo looting free for all. Anything that holds value is criminalized because they can't inflate it away. If you have too much physical cash or gold, you're a terrorist or a drug lord.

The biggest problem today is over-capitalization

If we weren't over-capitalized, the bullshit quant trading algos wouldn't be a thing. Nickel-and-diming from Las Vegas Casinos to Airlines would not be such a thing. It's only possible because there is too much capital chasing too few opportunities.

Hopefully, we have have a two-decade reindustrialization financing that will produce real returns on real investment and offset, if not cancel some, of the effects of the massive Boomer sell-off that will be coming to finance retirement and health problems.

Fears?

Hopes!

Patrick says

Fears?

Hopes!

I am pretty sure I know how Zoomers feel about it:

.

Something has to give.

Hopefully housing costs (rent or mortgage + tax + insurance + HOA fee) go down no more than 10% while household income goes up 4 to 5% a year from 2022 (when home prices generally peaked) to at least 2028.

I just hope housing prices don't crash but you have some correction and relief for the working class.

I do know I saved a lot of money in the Florida panhandle switching from Olympus Insurance to Ovations Insurance (from $2250 to $1650 annual premium) for HO-3 insurance starting this September for a replacement value of $270,000 and 5% deductible for hurricane damage.

I credit that to Ron DaSantis stating he was working over the last 4 years at trying to bring more competition to the property insurance market.

And I did notice on the east end of Panama City Beach that 3 bedroom, +1 car garage townhomes are renting for around $2000, which is same price in 2021.

And my friends in the hospitality and service sector are saying the starting wage is now $16 an hour for retail associate such as at a culinary and spice specialty store at the local strip mall.

.

PanicanDemoralizer says

The biggest problem today is over-capitalization

Still suffering from the big jump in M2 money supply since 2020 ?

Yes, lots of easy money through "finance engineering" and Biden style handouts, and not earned through innovation and productivity.

You mentioned Vegas getting away with nickel and diming, and I even see in Panama City Beach no more charging $400 a night for a 2.5 (out of 5 star) beach condo.

And even with prices coming down quite a bit, the local tourist development council has reported a drop in visitors (and consequently a drop in hotel , motel, and short term rental "bed taxes").

.

MolotovCocktail says

https://wolfstreet.com/2025/08/04/inventories-of-homes-for-sale-surge-in-denver-seattle-phoenix-tucson-portland-las-vegas-salt-lake-city-albuquerque-boise/

MolotovCocktail says

Arkansas is landlocked. So is Nevada. Oklahoma. Utah. Idaho. Kansas. Missouri

Ahem, bro:
Arkansas and Missouri are on the mighty Mississippi River. Lots of cargo shipped on water from their ports to all over the world. Same goes for other (by that definition of yours) states along the Mississippi and Ohio River waterways.

As for that, Oklahoma has a port on the Arkansas River at Catoosa for worldwide freight shipping. My relatives in Oklahoma are mighty proud of their state's status as having a world-wide shipping hub. When I was a kid they took us out there for a tour. Arkansas, Oklahoma, Missouri and others: "coastal" state by your definition.

B.A.C.A.H. says

Ahem, bro:
Arkansas and Missouri are on the mighty Mississippi River. Lots of cargo shipped on water from their ports to all over the world. Same goes for other (by that definition of yours) states along the Mississippi and Ohio River waterways.

As for that, Oklahoma has a port on the Arkansas River at Catoosa for worldwide freight shipping. My relatives in Oklahoma are mighty proud of their state's status as having a world-wide shipping hub. When I was a kid they took us out there for a tour. Arkansas, Oklahoma, Missouri and others: "coastal" state by your definition.

Not according to Wookie's definition.

Patrick says

Fears?

Hopes!

As both landlord and home owner, I absolutely do not care for housing values, I hate that it is constantly inflating, because I see next generations opportunities going away. They'll be forced into debt or to never own anything, that's terrible.

We are in a generational relay race, we need to pass a relay to next generation and that generation needs to not start in debt, but start with opportunities. And I do want housing and life necessities to be affordable to them, to leave a better world for them. I don't think that view is shared among too many, but I know I'm also not alone in that kind of thinking.

Fortwaye says

Patrick says

Fears?

Hopes!

As both landlord and home owner, I absolutely do not care for housing values, I hate that it is constantly inflating, because I see next generations opportunities going away. They'll be forced into debt or to never own anything, that's terrible.

We are in a generational relay race, we need to pass a relay to next generation and that generation needs to not start in debt, but start with opportunities. And I do want housing and life necessities to be affordable to them, to leave a better world for them. I don't think that view is shared among too many, but I know I'm also not alone in that kind of thinking.

I completely agree with your sentiment.
This is one reason I don’t like CA Prop 13 that works against young people.
It’s all about stealing their future.
No community prosper who is against their next generation.

MolotovCocktail says

Not according to Wookie's definition.

Wasn't my definition. https://www.vocabulary.com/dictionary/coastal#:~:text=Coastal%20things%20are%20near%20the,in%20an%20environmental%20science%20textbook.

You guys are cute. I said cities and coastal areas. Rivers and lakes are not that. A city might be on a river or lake though. Give me an example of one with real estate values crashing. I'll wait.

WookieMan says

areas. Rivers and lakes are not that. A city might be on a river or lake though. Give me an example of one with real estate values crashing. I'll wait.

Again!

Blue says

This is one reason I don’t like CA Prop 13 that works against young people.

Ahem, "CA Prop 13 that works against most young people.

Works for young progeny of long time California homeowners.
"

🙄

B.A.C.A.H. says

Blue says

This is one reason I don’t like CA Prop 13 that works against young people.

Ahem, "CA Prop 13 that works against most young people.

Works for young progeny of long time California homeowners.
"

.... but only if they live in their folks' old house. Which is not what everybody really wants, especially if there are siblings.

Or if the old neighborhood has turned into little Mexico.

CA Prop 13 is a A Ponzi scheme.
Like every Ponzi scheme, it does work for some at the expense of the others!
No law is perfect but Ponzi scheme law is the worst form of the laws.

That is quite illogical. Rising property values create equity which can be tapped via HELOC to pay taxes.

Al_Sharpton_for_President says

That is quite illogical. Rising property values create equity which can be tapped via HELOC to pay taxes.

This is how things work everywhere. But in CA, folks wanting to keep their equity and don’t want to pay taxes. That’s how Prop 13 came in only to ruin state with its side effects.

The_Deplorable says

Which is why it should apply only to "primary residence." But Prop 13 overstepped that goal by a longshot by applying to rentals, businesses, etc.

The better containment solution, though, would be to see how much property taxes are currently collected and make sure the total tax collected never increases by 2% each year. Then adjust everyone's tax rate to the rate that collects that amount of taxes when everyone's property is fairly assessed. Some people's takes would go up and some down. The ones whose taxes go up, by definition, has had their house increase in value massively and so therefore should be able to just have the county put a lien on the property to be collected when the owner dies. The lien thing, I believe, is already available to "seniors" here in Santa Clara County.

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

That bit of detail is what should have been included in the proposition, for sure.