patrick.net

Eman says

I took the risk and got rewarded while the majority is still beholden to their W2 paychecks, the most addictive drug. “Perceived” security comes at a price.

I do admire risk takers...win or lose. I have a very strong dislike (I don't like to use the word hate usually) for those who coast on the efforts/money of others like government employees, welfare and even trust funders. These people tend to be vapid and offer nearly ZERO value.

Fiat, debt and government are going to kill this country. I feel like I've been having a vision for the past 5-10 years.

gabbar says

Unless other careers see the same issues, it could be FedEx alone. In either case slow down is inevitable. That means great deals are on way for buyers. Watch out for the crazy inflation. Never fall for gov fake numbers.

Booger says

2010 was the magic number.

Patrick says

California Housing Market: Dismal Sales

I wonder if the Work From Home (WFH) workforce is being called back to work in Silicon Valley, and if that means they have to return from rentals in Idaho, Nevada, etc.

That should mean the influx of former WFH workers should at least help the residential rental markets in Silicon Valley. Investors could rent out their homes which they purchased in last two years at inflated prices.

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GNL says

Fiat, debt and government are going to kill this country. I feel like I've been having a vision for the past 5-10 years.

The Federal Reserve is at least selling assets on its balance sheet as part of quantitative tightening (QT).

One silver lining is that we are inflating out of a debt crisis as the Debt to GDP ratio has been trending down since it peaked around early 2020. I hope it can return within the range of 100 to 110% within the next 4 years.

This means working, middle and fixed income seeing annual income growth that is about 2.5% less than CPI, or government-reported annual inflation. I just hope this is for no more than two consecutive years.

We need more innovation to realize greater productivity. I'm reading more about how Californian strawberries are harvested by robots.
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ad says

I'm reading more about how Californian strawberries are harvested by robots.

Blue says

gabbar says

Unless other careers see the same issues, it could be FedEx alone. In either case slow down is inevitable. That means great deals are on way for buyers. Watch out for the crazy inflation. Never fall for gov fake numbers.

It could just be Amazon in sourcing.

This isn't rocket science. Inventory levels in 2005 - 2008 were at the highest levels recorded in the last 25 years. Todays levels are at the lowest.

https://tradingeconomics.com/united-states/total-housing-inventory

stfu says

This isn't rocket science. Inventory levels in 2005 - 2008 were at the highest levels recorded in the last 25 years. Todays levels are at the lowest.

Inventory is the FIRST metric you look at with real estate. Everything else is noise. Interest rates will stall it for sure and not crash unless they hit double digits. People still need a place to live and will still buy. Then employment. If you cannot find a job right now you're a retard.

Inflation in goods is the biggest factor right now. Huge grocery bills, huge fill ups of gas, etc. Less disposable income to save and/or purchase a home. With no one wanting to work, wages are rising, at least here in IL. I dislike Biden with a passion, but from an RE perspective I'm not seeing much of a change in flyover country. High end coastal cities as people leave because covid changed their life (mask and vaccines), dip shit taxes/policies, and you can work from home are bringing more inventory to the market in urban centers.

WookieMan says

If you cannot find a job right now you're a retard

Or UnVaxxed, Or both?

Would make a great place for a few refugees to live while they get their footing to start a life of labor.

stfu says

WookieMan says

If you cannot find a job right now you're a retard

Or UnVaxxed, Or both?

Not possible to be both. The unvaxxed are the smart ones, and the proof is being published every day now.

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As far as what Booger posted a few posts ago on the condo in Salem, MA

https://www.zillow.com/homedetails/225-Derby-St-UNIT-503-Salem-MA-01970/68008640_zpid/

Last sale prices were $549,000 in Mar 2005 and $415,000 in Nov 2011.

The current asking price is around $600,000. Based on 4% appreciation annually from 2011 to 2022, the estimated market value of this condo would be around $640,000.

My guess it will sell for around $550,000.

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https://www.cnbc.com/2022/09/19/more-homebuilders-lower-prices-sentiment-falls-for-ninth-straight-month.html

More homebuilders lower prices as sentiment falls for ninth straight month

zzyzzx says

Ouch, how much did you put down? Walk away sucker. Actually, how do we know this is a true situation?

GNL says

Ouch, how much did you put down? Walk away sucker. Actually, how do we know this is a true situation?

may not be true or bought a shack with not enough stock options. Happened to met few so far who works for that co. everyone owns multiple houses of mm$ each. The stock has been on raise all along.

zzyzzx says

If they start growing marijuana and renting out rooms by the hour the payment should be no problemo.

Holy Freaking Cow.

I use short duration treasuries to manage the cash. (Not I-bonds, Hipsters, as there's a low limit for the purchase amount).

The brokerage notices of execution came in at annualized rate of 3.895%. I looked back one year, seen I picked up some in July of 2021 at 8 basis points.

I've reckoned for a long time that the 3 month and 6 month treasuries are reasonable proxies for interest costs that businesses including small businesses like farms pay for revolving credit to fund operations.

If my arithmetic is right, the borrowing cost for those folks has increased by a factor of about 48x from 14 months ago. Much of that increased cost will have to come out of margins for many businesses as folks will only be able to pay the higher prices for stuff like food at home, rent, utilities and medical.

B.A.C.A.H. says

use short duration treasuries to manage the cash.

How are you doing this?

zzyzzx says

use short duration treasuries to manage the cash.

How are you doing this?

Fidelity, Vanguard, ETrade brokerage accounts broker these at no cost to the customer. No commissions, no premiums.

I get the same rates at auction at the brokerages as in my Treasury Direct account. Treasury Direct is a bit of a hassle to use as we must link it to a retail bank account. I have a few longer duration treasuries plus the ibonds there, but mostly use the accounts at the brokerages, which have a check-writing feature, for treasuries.

I don't know how the companies make money on it. Maybe they don't.

zzyzzx says

Let me understand this. This person bought it early this year. He was fine with everything till now. He probably got the cheapest mortgage rate too.

This is more like buyer’s remorse. Feels like he’s afraid of losing his job. Then his down payment and remodeling money will be down the toilet with a foreclosure. This is what happens when other determines his faith (his employer).

zzyzzx says

Looks like money laundering.

Patrick says

Looks like money laundering.

Redfin and Realtor do not show this sale. They show last sale in 2021.

https://www.redfin.com/AZ/Buckeye/1093-S-225th-Ave-85326/home/27414771

https://www.realtor.com/realestateandhomes-detail/1093-S-225th-Ave_Buckeye_AZ_85326_M15441-03402

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https://www.remax.com/az/buckeye/home-details/1093-s-225th-ave-buckeye-az-85326/15132725937338060195

From what I have seen in the past, the 30-year mortgage rate usually was around 2 to 2.5% higher than the Fed Funds rate. That's when there is stability in the economy and the Fed Funds rate is steady with no expected increases.

So technically with the Fed Funds rate now at 2.5%, then the mortgage rate should be around 5%.

The mortgage rate is around 6% now given the market expects further increases in the Fed Funds rate.

I would not be surprised if the Federal Reserve raises the Fed Funds rate to 3.5% this month, and not the expected 3.25%.

Either way, the Fed Funds rate has been below 3% since 2008. Obama had essentially 0% interest rate during almost all his Presidency.

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Realtors and Mortgage Brokers are praying for a crushing job recession or they're going to starve.

They don't have a market if there's no buyers and no inventory to sell even if they had buyers. They don't care if prices are going up or down - they grift off of the transaction.

Meanwhile you've got the biggest generational cohort looking for their first home but holding off because the combination of 6% mortgage's and prices 60% higher than 2018 have them stuck paying rent until something gives.

That something has to be sellers either (a) repricing to the point where the monthly payment is affordable, (b) forced selling from a credit defaults aka 2008 or (b) COVID Vax killing off enough home owners to make a meaningful impact on inventory.

Honestly, (c) seems to be the most likely option. The potential sellers are mostly sitting on 3% mortgages and they have to live somewhere - likely they can easily afford the payments and so there will be no bubble pop. The thing that could change this overnight is if a material number of these comfortable home owners lost their jobs.

stfu says

The thing that could change this overnight is if a material number of these comfortable home owners lost their jobs.

Very good analysis. I see the Fed wanting housing median price to return to mid 2020 levels. Maybe it will overcorrect and drop to 2018 levels.

Stocks are way too volatile as compared to 1929, 2000 and 2008 because there is just a larger percentage of population who now day trade or invest. That is why bear markets now are shorter lived.

If there is that much job losses involving comfortable homeowners, then we would already be in a deflationary environment, which means the Fed Funds Rate likely already peaked around 4.25% and had many months of Quantitative Tightening (QT) (aka: reverse-Quantitative Easing).

Then we are back to no more than 1% for the Fed Funds Rate and Quantitative Easing.

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Toll Brothers getting desperate:

6.42% is still too low.

Unless it’s above inflation like 10% it doesn’t matter much.