patrick.net

DemoralizerOfPanicans says

A town around Salt Lake jacked up theirs 11% overnight. DeKalb (I think) in Georgia announced 10% annual increases in water/sewer for the next decade

Not saving for replacing sewer and water systems 50 years after they were first built and then jacking up taxes/fees now isn't a 'shenanigan'. It's typical dumbfuk government in action, that's all. And that is before the EPA gets involved, which they have.

Also, suburbs vs mixed use make for crappy revenues to fund any of that, too.

DemoralizerOfPanicans says

They will go down at least as much as the GFC. Worse, because in the GFC Boomers were still in their working years

Exactly. For some reason ppl here are resistant to such facts, tho.

Finally, unlike the GFC there was an Obama-pushed massive build of Multifamilies throughout the 2010s and onwards, with large apartment complexes now in subrurban areas that once strictly limited them. This was not anything like commonplace before 2010.

Not only were millions of MFUs built, they were built in suburban areas and larger in SF than previous eras.

"The investors will buy them all up"

No they won't. Property Tax, Insurance, etc. has all skyrocketed, non-mortgage ownership costs have gone way up in almost every state in the Union.

The Rent-vs-Own disparity works against renting out newly purchased houses.

The ROI isn't there.

The only thing that can bring investors in is ... the rent vs. own disparity narrowing greatly or preferably reversing like during the 2010s. Which will take a collapse of house prices or a sudden demographic surge in demand that won't happen.

DemoralizerOfPanicans says

Glock-n-Load says

I still don’t think housing prices will go down in any significant way.

They will go down at least as realtive to the GFC. Worse, because in the GFC Boomers were still in their working years, now we are getting into the oldest boomers passing on or into assisted living.

Add to it the turn against mass extreme hyperimmigration, which will take a few years to perculate fully. Immigrants, legal or illegal, generally have a few years delay before their impact on housing (buy OR rent) is felt as they tend to live with family already here or bunk up densely.

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Glock-n-Load says

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Yes, a relative drop in % or more.

DemoralizerOfPanicans says

Glock-n-Load says

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Yes, a relative drop in % or more.

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Glock-n-Load says

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Cool. Yeah, it's definitely an inflection point. I just don't see how the current prices are sustainable, and there are no "Starter Homes". Hardly anybody has built a modest ranch in 30+ years. A handful of indy builders here and there out in the country, nowhere near demand, in quantity or location. The ones built in prior ages are too close and too desirable now, as well as expanded by former owners.

"You only are looking at houses since 2000? Come on you don't need new"

Yeah, 25-year old houses built over a generation ago.

Imagine in 1994 calling a house built in 1969 "new"

"Why I parked my Gremster right here - before I made the one car garage into the 3rd bedroom. Just look at this fine wood paneling. The Wall Oven still works great! I won't take less than $300k for this 1200 sq ft beauty. Roof last replaced in 2001, practically yesterday! The $320k 1600 sq ft brand new house next door with two additional bedrooms, USB ports right in the wall, two car garage, and 5% teaser rate for the next 2 years? It just doesn't have Wakka Wakkka Wow Wow my place has."

DemoralizerOfPanicans says

there are no "Starter Homes"

the closest I've seen to that is now "townhomes" and you fortunate enough to have a garage with a "townhome"

in Washington DC metro, back around 2002 there was no way someone on GS-13 step 4 salary could afford a "starter home" as in single family detached house with garage (3 bedrooms, 2 baths, 2 car garage) within 12 miles of the National Mall and Washington Monument (which meant about a 1-hour commute by car)

that is why there was a proliferation of townhomes built in Northern Virginia

.

DemoralizerOfPanicans says

Glock-n-Load says

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Cool. Yeah, it's definitely an inflection point. I just don't see how the current prices are sustainable, and there are no "Starter Homes". Hardly anybody has built a modest ranch in 30+ years. A handful of indy builders here and there out in the country, nowhere near demand, in quantity or location. The ones built in prior ages are too close and too desirable now, as well as expanded by former owners.

Condos are the new starter homes now.

DemoralizerOfPanicans says

GreaterNYCDude says

That's the crux of the matter. Would nice to see this graph with the x and y axis so we can see what time frame it covers, but your point is taken.

If it helps, I tracked this chart down but it ends about mid-2023.


That does help. Thanks for sharing.

More often than not buying has been more expensive than renting, but in my experience rental units are typically smaller than most houses built within the last 30 to 40 years or so. Builders just build bigger, unless it's a condo complex.

When I bought back in 2008, I went from a 1200 ft2 2 bdrm apartment to a 2400 ft2 3 bdrm house. Yes my cost went up, but on a $/ft2 basis it was a wash.

But I still can't fathom buying a house in this market. For as difficult as it was back in the original housing bubble, it's gotten substantially more so this time around.

Wow

This is eye opening, however let's not forget that people married and pooled their resources early, so this excludes people who own but aren't married. Also people didn't see their 20s and early 30s as working and partying hard, going on vacations regularly and ear out or get uber eats. They were already saving to provide for their family. Within a more solipsistic society it's natural people own less money and less shared resources.

Boom boom boomers, bankers and builders. They priced everyone out, shit loans and too many houses built so the builders got on banks to change the loans to sell them.

2000-2010 was war, housing bust, Obama and feminism rising at the tail end of that decade. From there it's all been downhill. Men my age and younger don't want to get married. High suicide rate among males. Not that I'm looking but young girls look like whores now and many of them are fat. Plus the whole swipe left or right fake photo culture for hooking up.

Also, to be blunt, a lot of that is blacks pumping and running and a single mom generally can't afford a house. Black ownership used to be way higher.

Lots of factors, but those are just some off the top of my head. Price increases and marriage just isn't a thing anymore.

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Misc says

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Sideways. All the summer closing are done as well. After Labor Day everyone will dump their listings. Most have equity anyway and don't have to sell. Spring 2026 is the biggie at this point. Sales will go down this fall but so will inventory. So prices will stay the same and/or rise in a lot of places. No one wants to move or have showings during the holidays.

I know it's realtor talk, but everyone wants to move in the summer months if they have kids. So you have to get under contract in spring. If it's a bad 2026 spring for contracts then there might be problems. I'm not seeing it being bad, especially if there is 1-2 fed cuts. I don't see unemployment going anywhere outside of seasonal jobs in the winter which don't matter.

The expensive areas is what I'll call them now so I don't get trolled will take a hit. With the tariffs and if it really moves businesses back to the states that's another positive. The lower priced areas will rise, but national numbers will look poor 5%, not bad like 10-15% down. The transition from city to suburb or rural will look bad, but it's actually good. Except for those that live rural already. Don't bring your politics.

Misc says

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Very small change!
This doesn’t sound like a good news as the FED announced interest rate cuts after Trump threatening to lower the rates.
Prices may still go down at various places but will very likely push up overall prices to reflect the inflation from rate cuts.

I believe whoever "they" are, will do whatever is needed to support home prices. It really is different this time.

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

AD says

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

Bro, it's because they're going to lower rates.

What happened the last time rates went down?

The fundamental barrier is price, not rate.

And add on the skyrocketing costs of insurance, property taxes, and utilities all at the 2025 rate, not last assessed or sold at 2010 price.

6x Median Income is not a stretch, but suicide.

GNL says

AD says

https://www.aol.com/more-homesellers-pulling-properties-off-215312299.html

Bro, it's because they're going to lower rates.

Uhuh

DemoralizerOfPanicans says

What happened the last time rates went down?

The fundamental barrier is price, not rate.

And add on the skyrocketing costs of insurance, property taxes, and utilities all at the 2025 rate, not last assessed or sold at 2010 price.

6x Median Income is not a stretch, but suicide. I have no faith that TPTB will allow the market to work like it should.

All I can say it, let's see what happens. I have no faith that TPTB will allow the market to function like it should.

Since a lot of people have been relying on Mainstream economists, I will take a moment to de-bunk one of their main crap talking points.

Economists have been spewing that lowering short term interest rates increases the potential for inflation. While this was true back in the 80's and 90's, today the opposite is true. Lowering shirt term rates decreases inflation. Back in the 80's and 90's household balance sheets were big on debt and light on savings/money market accounts. Today there is about $1trillion in vehicle loans and about $1 trillion in credit card debt (A lot of that gets paid off at the end of the month and accrues no interest charges). Today's households own about $6-7 trillion in money market accounts alone. This does not include CDs or high yield savings accounts.

A decrease in short term rates reduces the cash flow going to households from their short term interest bearing accounts in an amount greater than the cost savings of the variable rate debt holdings they have.

Read that again. It is now plainly seen that reducing short term rates reduces inflation in the economy.

Interesting take. Lower rates = lower returns = less $$ to spend?

GNL says

I have no faith that TPTB will allow the market to function like it should.

There's a big issue.

GNL says

Interesting take. Lower rates = lower returns = less $$ to spend?

Only if savers were spenders. Reality is Lower Rates equals more borrowed money to spend. When borrowing is easier, stocks, cars, and houses inflate.

HeadSet says

GNL says

Interesting take. Lower rates = lower returns = less $$ to spend?

Only if savers were spenders. Reality is Lower Rates equals more borrowed money to spend. When borrowing is easier, stocks, cars, and houses inflate.

That's the way it used to be, but now households hold trillions and trillions of money markets and yes they are using it as income. The increase in borrowing from a lower short term rate is dwarfed by the loss of income from these extra trillions of assets.

Personally I think they held rates so low for so long over the first two decades of this century that we have an entire generation who has no idea what it's like for rates to be "normal" by historical standards.

In this cycle lower rates will help to a point but at some point if wages don't start to rise your middle class consumer will be tapped out. So I don't see lowering rates leading directly to inflation, in the short term (one to five years out)... If anything they raised rates TOO quickly coming out of Covid, compared to the more "step wise" approach coming out of the 2008 housing collapse.

Extend and pretend, again. Even with lower rates house prices don't have much more room to run on the coasts. To borrow a phrase, the rent is just too damn high!

I'm not an economist.. just a guy who likes numbers.

Full data set


2000 to present:


Source: Federal Reserve (https://fred.stlouisfed.org/series/fedfunds)

GreaterNYCDude says

Personally I think they held rates so low for so long over the first two decades of this century that we have an entire generation who has no idea what it's like for rates to be "normal" by historical standards.

Yes. "OMG rates are brutally high at 7%" LOL

It's a hit, it's outta here, I'm Phil Rizzuto with THE MONEY STORE... Rates as low as 14.5%!


https://www.youtube.com/watch?v=QI9q7nkIryA

Also stupid to drop rates to zero like they did and give away buckets of money. Nothing that could do but cause inflation…

Misc says

A decrease in short term rates reduces the cash flow going to households from their short term interest bearing accounts in an amount greater than the cost savings of the variable rate debt holdings they have.

Read that again. It is now plainly seen that reducing short term rates reduces inflation in the economy.

Nope. Because most ppl barely have $400 in their bank account. Meanwhile, Uncle Sam keeps injecting new money faster than supply of goods occurs.

Inflation is purely a too much money chasing too few goods situation. A monetary phenomenon.

And most incorrectly conflate rising prices with inflation, too. Tariffs do not cause inflation even if they do cause some prices to rise. It's a tax, is all.

Back to inflation..

Reducing rates leads to more lending. Since our banking system is soo fucked up, the Fed ends up loaning more money from printing than banks use deposits. Its supposed to work the other way around but the Fed became a lender of First Resort instead of Last Resort to banks ever since the GFC and never really stopped.

That leads to more consumption on the production side and consumer side via more money being created, causing inflation.. That means higher prices until supply catches up.

Since we are talking about housing here, supply is one big local/state/federal fuckup just like medical care and college costs are. We know what happens when even more money is thrown at it.

We are at peak everything. Peak debt. Households have record cash. Close enough to peak real estate prices. Peak stock market. Peak gold prices with households having record amounts of physical gold/silver. Record GDP Savings rate is good at 4.5% and looking for places to put this savings.

Mal-investment is everywhere.

Misc says

Mal-investment is everywhere.

There's only one way to cure Mal-investment.

And boy will many people hate it.

US household net wealth is over $170 trillion.

We have more liquid cash type assets than mortgages outstanding.

We are saving over $1 trillion per year.

If our net wealth simply keeps up with inflation, that's a nominal increase of $4-5 trillion per year.

If the Fed doesn't lower mortgage rates dramatically, Trump is going to send out tax rebate checks based on the amount of tariffs received.

Regardless of interest rates, one thing that is a big negative for the economy is people having to start (or re-start) paying back their student loans. I wonder how much of a drag that puts on local economies. I know one borrower who called the administrative department, couldn't get through, and so decided to not bother paying. Is that common? How long will that go on for? Is it one of those little secrets where people in the know there are no consequences for pretending ot be ignorant?

Misc says

We are at peak everything. Peak debt. Households have record cash. Close enough to peak real estate prices. Peak stock market. Peak gold prices with households having record amounts of physical gold/silver. Record GDP Savings rate is good at 4.5% and looking for places to put this savings.

Mal-investment is everywhere.

so what is the end state or outcome ?

some big reset like housing prices crashing to affordable levels in 2009-2012 ?

.

MolotovCocktail says

Uncle Sam keeps injecting new money faster than supply of goods occurs.

I recall Bob Brinker in his MoneyTalk radio show saying it was like helicopter money as far as dropping money from a helicopter onto a crowd.

Maybe a lot of vacation rentals will be converted to long term rentals to help with supply.

I just saw this on WMBB about my county: "Last school year, Bay District Schools had a total of 21,690 students enrolled. This year, that number went down to 21,219."

Meanwhile I've seen no ongoing construction such as townhomes and "luxury" apartment complexes over the last 12 months, and rent for a 3 bedroom, 2 car garage townhome on the beach is around $2,000 and same price as back in 2021.

............