patrick.net

Bitcoin says

If you dont have to sell, why would you give up your locked in rate at 2-3% and lock in a new rate at 5.5%?

Income and payments, not about rates. Sure the rates change but if I make $50k more, interest rates don't much matter. If you can afford 10% interest on the home you're purchasing, rates will eventually drop and you can refi. Job security, income and monthly payments are the biggest factors, not rates. People get way too caught up with rates.

I agree home prices are stable. Loans are the most solid they've been since the crash. I'd track income and jobs at this point if one is concerned with housing prices. Even then a "crash" would maybe be 10% on the downside. As much as I don't like Biden, the economy is not as bad as it seems in some echo chambers. We'll hit the ceiling with inflation and people that need to will cut back. We'll see if that results in job losses given we're a service based country.

WookieMan says

We'll see if that results in job losses given we're a service based country.

I do wonder if any potential job losses will be in places like China, or if any potential US job losses will look more like less help wanted signs everywhere.

Bitcoin says

AmericanKulak says

#1 year for boomers turning 65 is this year.

Many are counting on selling that property for their retirement.

I have heard boomers are retiring and selling in droves for years now. Most boomers will stay put. Fixed income, inflation, higher rates....they will remain in their house until their last breath. They might take equity out to travel or pay for health care. Reverse mortgage is also an option.

If they are considering moving from Metro to rural area and possibly downsizing many of them can sell and buy with cash, no mortgage necessary. Rates will have little to no effect on them, other than perhaps giving them more inventory to choose from in their move to location. In CA prop 13 will have them either staying put if they are happy with their situation or moving their tax basis with them to their new property.

WookieMan says

Job security, income and monthly payments are the biggest factors, not rates. People get way too caught up with rates.

Rates impact monthly payments. Its simply math. Affordability in housing is way worse since rates have increased. Its all relative because it depends on the house price/area. I live in SoCal, so we are talking 1M+ in order to get something decent.

https://www.nahb.org/blog/2022/03/how-higher-interest-rates-affect-housing-affordability/?source=patrick.net

a decent home in my area is 1.2M

with 5.5% rates and 20% down your monthly nut is $7,017 (PITI), $5,451 is just principal and interest, rest is 1.1% Taxes, HOA $300 and insurance 2k/pa.
with 2.5% and the same DP, its $5,360 (PITI), $3,793 is just principal and interest, rest is 1.1% Taxes, HOA $300 and insurance 2k/pa.

People who could barely afford the 1.2M with 2.5% can no longer afford to buy at 5.5%.

"If you can afford 10% interest on the home" Rates are relative. Many buyers can afford 10% rates on a 200k house. Not many can afford 10% rates on a 1.2M house.

AmericanKulak says

gabbar says

Love this idea. What do you mean by "remotely convenient to multiple potential employment sources"?

Try to live in a place where you can access 2-3 different cities with industries you're qualified in. In other words, pick a town within 30-45minutes of several other cities with some employment in your field. That way if an employer closes in one, you have at least one other employer nearby.

Try not to live in a place where the city you live next to is the only place of employment within any kind of reasonable commute distance.

What do you think about buying a home so constructed that you can rent out a part of your home to a tenant or as a airbnb? How about buying a property that has apartment/home located above a business?

Another way to pay off credit card debt is to die.
It's an "unsecured debt" so they are stuck with the debt when you finally depart this world.

"You can't taper a Ponzi Scheme" - Max Keiser

https://www.zerohedge.com/markets/biggest-story-no-one-talking-about-why-albert-edwards-expects-something-market-about-snap?source=patrick.net

What's happening is SO much bigger than the housing market.

Bitcoin says

Rates impact monthly payments.

Wages impact monthly payments. If no one has money for the monthly payment, they don't spend as much. Go to the source of how you're able to spend money, your employment, business or investments. The interest rate should mean little knowing that it will likely go down again and you can refi. A 2% swing in rates is minor payment wise on a 30yr loan. That's what people buy.

And yes, a $2M house it would make a difference on the payment. Your average to even above average homeowners is usually living in something worth less that $500k. It's not a big deal if you play around with calculators. The loans aren't shit like they were in 2003-06.

I've said it before. Watch the lower end of the market. If the below median priced properties start spiking, then you should start worrying. People get too fixated on the top end or higher priced homes. If the "minions" are spending more on a house, it's concern time. People of above average means will always have no issue with housing prices/payment.

porkchopexpress says

What's happening is SO much bigger than the housing market.

sure, if you quote zerohedge.
Zerohedge is like: alien apocalypse combined with zombie outbreak daily.
The sky is just a continuous fall with Zerohedge.
Zerohedge is dangerous because it can lead to being too defensive (in cash) instead of investing in the market. You want money allocated to stocks, RE and crypto.

AmericanKulak says

Most Olive Oil is tainted AF, too.

I remember reading years back that Italy exports three times the amount of olive oil they produce. Like in The Godfather, it's an industry dominated by the mafia. That's why we only buy it from California, but mostly we use Avocado due to it's high temperature tolerance.

WookieMan says

Bitcoin says

Rates impact monthly payments.

Wages impact monthly payments.

so that they we don't get carried away.....I was initially questioning the narrative that we get a lot more inventory due to higher rates. Higher rates are the reason why the market is finally cooling down - which is good! (doesn't mean YoY price reductions). its just a shift / cool down at this point. But I doubt that It will lead to enormous high inventory that will cause significant price reductions.
There is still a housing shortage, inflation and too much demand from high wage earners. The last time rates shifted the market temporarily was in 2018 when the FED went crazy with rates. shortly after rates dropped and prices exploded higher. I also think high rates are a 1-2y deal max, before they drop significantly.

Booger says

Because the US imports cooking oil from Indonesia?

Everything is a fungible commodity. If there's a shortage of X in country Y, Y will import X from all over the world.

This is the danger of globalism.

They are purposely making inter-dependencies on nations to WEAKEN the nation. This is a double edged sword - it prevents war because it leads to shortages in every case, but it weakens nations by making them subservient to artificial economic circumstances.

Bitcoin says

porkchopexpress says

What's happening is SO much bigger than the housing market.

sure, if you quote zerohedge.
Zerohedge is like: alien apocalypse combined with zombie outbreak daily.
The sky is just a continuous fall with Zerohedge.
Zerohedge is dangerous because it can lead to being too defensive (in cash) instead of investing in the market. You want money allocated to stocks, RE and crypto.

Time will tell. Remember, you used to make fun of "conspiracy theorists" about the vaccine, and it wrecked you. Don't dismiss alternative news sources.

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

The #1 participants in war are neighbors.
The #2 most common participants in war are... trade partners.

NuttBoxer says

but mostly we use Avocado due to it's high temperature tolerance

AO is good. We use it. Fact is good ole' fashion butter is still the best cooking fat. Not healthy, but it's super abundant. If you move (walk/run) the health consequences are minor outside of hereditary issues. There won't be a butter shortage here in the midwest I can tell you that. I grease almost everything up with real unsalted butter. AO is great though for the high heat cooking level. It's butter or AO on the flattops indoors or outdoors. Olive oil when necessary. Don't think I've purchased palm oil, but I'm sure it's in stuff I've eaten. I won't notice a difference if there's a shortage. I'm easy to please food wise cooking at home.

DooDahMan says

She said most homebuyers in the $2 million and over range are not as adversely impacted by interest rates, but that doesn't mean they're getting what they want either.

You're talking about a micro market of the economy. Fly over country you're rich if you have a $500k house. CA is not the reality of the rest of the country. Median is $200-250k in my small town. You take away the the high end that raises the median price, most people are buying $250-350k houses across the country. 1 in maybe 100 people are buying $2M houses as a primary residence.

Bitcoin says

i will get my next booster. Lots of business travel. This thread is about housing.

It is housing, but you don't need the vaccine at all. I've traveled a bunch and outside of wearing a mask I've had no issue. You still have to get tested coming back in if traveling internationally. Vax or no vax. It's an admittance that it doesn't work and they know it. Why test if the vax worked?

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

I'd say it's also about insanity..

It's networking. Has nothing to do with knowledge. You get little to nothing from college that you cannot just figure out on your own. Outside of invention, knowing people is the biggest value add you can have as a person. Degrees are generally worthless if you want to learn on your own. You go to college to meet people. That's basically all it is.

richwicks says

I'd say it's also about insanity..

Prices are not insane in the US but you would have to have a comparison in order to grasp it. I travelled to more countries than most and have lived in Europe. People can still afford to buy in the US. In other tiny countries where rates are 1%-2%, with virtually no inventory, prices are way higher than here. A dual high income family has often no choice but to rent for decades.

In the US you can buy if you have a decent salary and if you have invested in the stock market/crypto.
Not if you follow conspiracy theories all day long and waste time with zerohedge garbage though. That will probably keep you from investing and holding cash instead with is a terrible idea during times of high inflation......sometimes it might be better to listen to those who made it and are self-made millionaires :)

richwicks says

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

I'd say it's also about insanity..

That's the only thing it's about.

Bitcoin says

porkchopexpress says

and it wrecked you

temporarily. I am fine now. Got the pfizer booster and had no issues. Once it comes due, i will get my next booster. Lots of business travel. This thread is about housing.

This thread is about the ability to make sound decisions.

porkchopexpress says

This thread is about the ability to make sound decisions.

Buying RE in 2020 was a sound decision. People told me I bought the top and will lose big time. Giant LOL.
Buying a rental in AZ in 2022 was sound so far. appreciated by ~50k in just a few month and my renter will pay my PITI with 25% down.

to each their own.

Fair enough. Let’s see what the next year brings. None of us have a crystal ball.

WookieMan says

Fact is good ole' fashion butter is still the best cooking fat. Not healthy, but it's super abundant.

Butter is absolutely healthy if from a good source. Think organic and grass fed. We even use Ghee sometimes. Interesting taste, very good source of fat.

All I know is it's not fun when it feels like you're shitting a pound of peanut M&Ms

DooDahMan says

Is a College Degree the Worst Investment You Can Make — or the Best?

Depends on degree,commitment and aptitude.
Me-2 crowd with no idea of college suffers... or do they?... if govt write off their debt or they default.

There is saying in Punjabi that "You can't take away clothes from naked".. Most of these folks have nothing to lose.

I don’t know these days but I can say with certainty that I wouldn’t have the Silicon Valley job I have today without my college degree (EE)

I don't know that it's a bad investment, but it does seem more like an expensive luxury these days (that is if you get the education rather than some kind of watered down KampusKommieKrap)."

It's not an expensive luxury worth stalling your life over with debt unless there is tangible remuneration associated with the degree.

I go back and forth on the issue of a college education -- do you learn anything useful, is it worth the money, etc.. But, I cannot get away from the fact that in the society I live in (USA) having a degree says something important about you.

It just plain means something when you head out into the world.

To me, I think it demonstrates a person has a certain amount of sense and wherewithal and that person can start something significant and finish it.

Often stool doesn't tell you shit. Sure many of these feces forms "could" be the sign of underlying problems, but more often than not they aren't. Digestion, gut bacteria and mocrobiome are extremely complex topics and we're just at infancy level in terms of understanding.

Kepi says

To me, I think it demonstrates a person has a certain amount of sense and wherewithal and that person can start something significant and finish it.

Solidly disagree. Not picking a fight. But most wealthy I know, including one family member, were "morons" by most standards. I don't know of one "intellectual" rich person. I know a lot of rich people (8 figures plus). Most didn't even finish high school. Learning is different than doing. At some point you have to do the job and not think about it. Learn on the job mindset. That's how it works most times.

That and you have to learn how to sell or take other peoples ideas and make them your own. Or invent something and patent it. Both require basic reading, math and writing skills. Nothing extreme. Money and finance is the least taught skill for high schoolers or even college aged kids. Learn by failure I guess.

Even the liberal arts degrees like psychology can land a job such as a social worker for a hospital or non profit. Granted, the pay is not as good as a software engineer, a professional engineer (PE), or a registered nurse.

It depends on how you use or apply the degree. Getting intern jobs during college helps a lot as far as getting started in a career. I tell local college students to get a job working at the local military base such as in the contract administration or logistics / operations offices if they are business majors.

Another thing is even liberal arts majors can get into tech. They can earn certifications such as through Google, Microsoft, etc.

Ceffer says

I don't know that it's a bad investment, but it does seem more like an expensive luxury these days (that is if you get the education rather than some kind of watered down KampusKommieKrap)."

It's not an expensive luxury worth stalling your life over with debt unless there is tangible remuneration associated with the degree.

True, better to live at home and go to a local community college or an online university (. Arizona State online, Univ of Maryland Global Campus, Penn State Global Campus, etc.).

Then transfer and start junior year at a regular university.

Only if you plan on working for a boss.

It can be summarized as the "white collar" barrier of entry.

Only 2 decades ago, paralegals could get a GED and start work. Today, even paralegals are expected to have some BA degree, even if it's in ancient Etruscan bong making because HR & managers want to see that certificate.

I think it was the US that actually pushed the launch button.

komputodo says

Only if you plan on working for a boss.

Bingo. This. As I've said above, most wealthy people I know are of average to below average intelligence if finishing college or HS is the benchmark. I think it's a benefit for them not to finish or go. They don't know any better, don't think things through, analyze it, they just go do it. That mindset can lead to big rewards. Your college education business grad might hem and haw about ROI and all the other snarky terms. At the end of the day, if you get it done, and know a lot of people, you will be successful.

I never understood this concept of a bank creating money.

Seems to me that if:
Assume a deposit of $100.
$10 is maintained on hand as a required minimum reserve.
$90 is loaned out. That $90 is in the hands of the borrower, it is not available to be loaned out again.
The bank just hopes the depositor of that $100 does not want more than $10 withdrawal.

HunterTits says

Credit and Money are two different things.

Absolutely true. But notice how many folks think "home equity money" is cash supplied by the house, and not thought of as just collateral for a loan. That concept of "home equity" is no different than "ass pocket equity," where one considers credit cards with available cash advance money as untapped funds.