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housing prices peak 2


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2022 Apr 29, 9:29pm   72,473 views  1,815 comments

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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.



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877   Eman   2022 Sep 17, 2:52pm  

GNL says

Eman says - However, history is on my side so I’m not sweating it.

@Eman - "No one could have seen it coming". Oh really? Michael Burry did.

Don't get me wrong, I do not wish you any harm but, in the big scheme of things, ask yourself...do you really add anything to the economy? There has been much ink spent on Patrick.net about the rent seekers. It is what it is.

How do you feel about the big Wall Street attempt to takeover housing? Is it real? Is it good or bad for society? America used to put the health of society just a little higher on the ladder of importance.

With respect to the “no one could have seen it coming.” Some people always see it coming. The question is how many actually act on it and become financially free from the day to day W2 grind that some people actually hate? They do it because they have to, not because they want to.

With respect to being a rent seeker, I don’t share the same viewpoint with Patnetters. I’m a little fish in a huge pond. The big boys are the ones who drive the rental market. We just ride on their coattail and provide class B and C rentals at more affordable prices.

I love what I do much more than being a W2 engineer. I get satisfaction out of improving my buildings…again much more than designing stuff at my former W2. I don’t see the difference between the 2 jobs. The biggest difference is that I’m building my own dreams and my family’s while W2 folks are building other people’s dreams. I used to be there too although I was always looking for a way out. 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. Some people are only 1 paycheck from being in trouble. That’s NOT how I want to live my life. I want to control my destiny, and not someone else’s.

If WallStreet is taking over housing, it is what it is. It’s beyond my control. I’ve learned to do what I can control and focus my energy and efforts on it. In fact, REITs are a form of WallStreet owning real estate assets.

To me, money never sleeps. It always looks for a home/yield. Given so much liquidity in the market while CD’s and bonds didn’t pay 💩, it spilled into more real estate investments. WallStreet’s job is to find a home/yield with acceptable risk to their clients and make their fees aka paychecks. Who do we blame for what they do, or this “crisis”?
879   Patrick   2022 Sep 17, 7:07pm  

https://wolfstreet.com/2022/09/16/california-housing-market-dismal-sales-prices-sag-in-san-francisco-20-fr-peak-silicon-valley-san-diego-orange-county/


California Housing Market: Dismal Sales, Prices Sag in San Francisco (-20% fr. peak), Silicon Valley, San Diego, Orange County…
by Wolf Richter • Sep 16, 2022

Median Price, single-family houses: $1.635 million, lowest price for any August since 2019 ($1.60 million): -3.8% from July, fifth month in a row of declines, -20.6% from peak in March, -11.6% year-over-year.
881   GNL   2022 Sep 17, 9:29pm  

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.
882   Blue   2022 Sep 17, 9:44pm  

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.
883   Tenpoundbass   2022 Sep 17, 10:31pm  

Booger says




2010 was the magic number.
884   ad   2022 Sep 17, 10:42pm  

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.

,
885   ad   2022 Sep 17, 10:52pm  

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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886   Al_Sharpton_for_President   2022 Sep 18, 3:49am  

ad says

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



887   Booger   2022 Sep 18, 4:45am  

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.
889   cisTits   2022 Sep 18, 6:30am  

Housing bubbles take 18 months to two years to deflate. R/E is not liquid like stocks are.
890   stfu   2022 Sep 18, 8:47am  

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
891   WookieMan   2022 Sep 18, 9:23am  

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.
892   stfu   2022 Sep 18, 4:22pm  

WookieMan says

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


Or UnVaxxed, Or both?
894   PeopleUnited   2022 Sep 18, 8:41pm  

Would make a great place for a few refugees to live while they get their footing to start a life of labor.
895   Patrick   2022 Sep 18, 11:04pm  

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.
896   ad   2022 Sep 19, 12:00am  

.

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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897   cisTits   2022 Sep 19, 5:35am  

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


1) Not when all the new construction comes online in many markets.
2) Doesn't matter what national levels are. Housing markets are local.
898   cisTits   2022 Sep 19, 5:42am  

WookieMan says

Inventory is the FIRST metric you look at


Esp when the stats are rigged to not look at homes taken off and then back on market?
900   zzyzzx   2022 Sep 19, 8:09am  

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
901   GNL   2022 Sep 19, 8:17am  

zzyzzx says



Ouch, how much did you put down? Walk away sucker. Actually, how do we know this is a true situation?
903   Blue   2022 Sep 19, 8:42am  

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.
904   RWSGFY   2022 Sep 19, 9:02am  

zzyzzx says




If they start growing marijuana and renting out rooms by the hour the payment should be no problemo.
905   B.A.C.A.H.   2022 Sep 19, 9:41am  

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.
906   zzyzzx   2022 Sep 19, 9:55am  

B.A.C.A.H. says

use short duration treasuries to manage the cash.

How are you doing this?
907   B.A.C.A.H.   2022 Sep 19, 10:09am  

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.
908   Eman   2022 Sep 19, 10:15am  

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).
909   cisTits   2022 Sep 19, 10:39am  

zzyzzx says




Can't wait to see this fool's house to go into foreclosure.
910   Patrick   2022 Sep 19, 12:14pm  

zzyzzx says




Looks like money laundering.
911   cisTits   2022 Sep 19, 12:28pm  

Patrick says

Looks like money laundering.


Or, someone sold a neighboring house for peanuts and that skewed the average? That too could have been an act of money laundering.

About that average: Just wait until the new IRS Army starts seizing hundreds of thousands of homes.
915   ad   2022 Sep 19, 2:46pm  

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.

.
916   stfu   2022 Sep 19, 2:52pm  

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.

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