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Old 08-11-2022, 09:51 PM   #51
godfather2112
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The housing market is a mess, especially in some regions. There is going to be a correction, the data proves it. The historic 75 year average is 4-5 times your annual gross salary for a home purchase. We are now averaging 8 times your annual gross salary for a home purchase. In some bubble markets it's well over 10-15 times your annual salary for a home purchase. It's simply not sustainable and as prices continue to rise you will see more and more foreclosures as people will have to make tough choices. Especially as some housing markets start correcting (this is already happening).

I don't see it being as bad as 2007, but in some markets it will be bad. Using Salt Lake City as an example (where we used to live and still have a lot of friends and family) that whole market will see some major corrections (it's already starting).

If you look at car repo data there is some interesting data as well. They are seeing more repos from people who had good credit. Why? People have overextended themselves with big mortgages and big car payments. Coupled with high inflation it's a recipe for disaster.
And historically interest rates were 6% +. You’re data only shows 1 aspect of the entire picture. People were buying homes at rates or 2% - 4%. Those rates allow you a lot more buying power.

What, you think homes will come down 10-20%? Big whoop dee do. Homes have gone up 1x-2.5x over the last 5 years in some markets. You’d need a massive economic plunge short of a depression to bring things back down.

I don’t understand why it’s a hard concept to grasp that cheap money increases buying power. People were able to purchase homes for less than they were paying in rent or close to it.

Look at all the recessions over time. There have been two periods with real meaningful housing “crashes.” The Great Depression and 2008/2009.

Again, not a bubble. Especially when there is housing shortages and 30% + of home purchases in numerous markets were by firms or long term investors who hold.
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Old 08-12-2022, 09:00 AM   #52
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240,000 home at 6% costs me $400 more a month than a 240000 home at 3%.

if I get 3% rates, I can miraculously afford 340000 home. at 6% that 340000 home is over $2000 a month. just not the same territory.

whether there is a bubble or not, people just can't afford the same price for a home, and if interest rates go up enough to cool down the inflation enough? housing market is going to get rekt. people are not going to be keen to buy a home at 10% interest.

but yeah, to relate to your rent thing, if I'm paying $2000 a month for rent, and I was able to lock in at a sub 3% rate, I can afford a half a million dollars worth of home.

the thing is, everyone was getting that rate, so homes that were worth 1/4 million are now miraculously half a million. nothing changed but interest rates, people are humblebragging to everyone that they have a half a million dollar home, like no Francis, you still have a 1/4 million dollar home, you just grossly overpaid, or inflation is a lot worse than we are being told, either way, good on you for getting out from under rent. in 25 years when you're still paying just $2000 for your mortgage, rent is going to be $5000 for the postage stamp for which you used to pay $2000. that is the real benefit here.

Last edited by samagon; 08-12-2022 at 09:11 AM.
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Old 08-12-2022, 09:44 AM   #53
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And historically interest rates were 6% +. You’re data only shows 1 aspect of the entire picture. People were buying homes at rates or 2% - 4%. Those rates allow you a lot more buying power.

What, you think homes will come down 10-20%? Big whoop dee do. Homes have gone up 1x-2.5x over the last 5 years in some markets. You’d need a massive economic plunge short of a depression to bring things back down.

I don’t understand why it’s a hard concept to grasp that cheap money increases buying power. People were able to purchase homes for less than they were paying in rent or close to it.

Look at all the recessions over time. There have been two periods with real meaningful housing “crashes.” The Great Depression and 2008/2009.

Again, not a bubble. Especially when there is housing shortages and 30% + of home purchases in numerous markets were by firms or long term investors who hold.
I never said the entire market is a bubble but there are some states and regions that 100% are and will see some big corrections over the next 18 months. Some of these markets are already starting to see it with inventory levels up the highest they have been (100-300%+ year over year increases) since Realtor.com has been tracking the data in 2015.

When inventory levels are at that level and people are afraid to buy where does that leave the seller? You got it, slashing their prices and or foreclosing which does affect the market.

Anybody with half a brain could see coming, I have friends who have had their housing prices in the southwest double and even triple in just the last 3-4 years and it's just not sustainable. It's not just about the cost of your mortgage when interest rates are low it's about the actual value of the house and what first time home buyers can afford.

My sister in law paid $170K for her house in the Salt Lake suburbs 15 years ago. She has it listed right now for $600K after two price drops (she originally listed it for $630K). She is chasing a dropping market with scared buyers. It's a small house on a very small piece of land. I told her to list it for $500K and sell it while you can but she is trying to get every penny because her new $1.2M house will be ready in two months.

We are going to see some pockets in our country that will have some major corrections, especially once the foreclosures start.
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Old 08-12-2022, 09:47 AM   #54
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Another duplicate
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Old 08-12-2022, 10:04 AM   #55
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Another duplicate
Suggestion, as there have been many duplicate posts; after you hit "submit reply" just wait, don't hit it again, don't close the page, just wait, for what feels like too long. Either the connection for the server is absolute garbage, or it's being bombarded with an exceptional amount of traffic.

This is what has worked for me to avoid double posts, ymmv.
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Old 08-12-2022, 10:21 AM   #56
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I never said the entire market is a bubble but there are some states and regions that 100% are and will see some big corrections over the next 18 months. Some of these markets are already starting to see it with inventory levels up the highest they have been (100-300%+ year over year increases) since Realtor.com has been tracking the data in 2015.

When inventory levels are at that level and people are afraid to buy where does that leave the seller? You got it, slashing their prices and or foreclosing which does affect the market.

Anybody with half a brain could see coming, I have friends who have had their housing prices in the southwest double and even triple in just the last 3-4 years and it's just not sustainable. It's not just about the cost of your mortgage when interest rates are low it's about the actual value of the house and what first time home buyers can afford.

My sister in law paid $170K for her house in the Salt Lake suburbs 15 years ago. She has it listed right now for $600K after two price drops (she originally listed it for $630K). She is chasing a dropping market with scared buyers. It's a small house on a very small piece of land. I told her to list it for $500K and sell it while you can but she is trying to get every penny because her new $1.2M house will be ready in two months.

We are going to see some pockets in our country that will have some major corrections, especially once the foreclosures start.
If she bought it for $120k 15 years ago, I’m assuming it’s paid off or damn near she could have cashed out refi when rates were low, turn that into a rental and use the money towards her new house.

The market will flatten and correct but certainly not crash except for areas where people have been leaving in droves (Sam Francisco for example). I’ve been watching the housing in salt lake as I might move. Homes that are priced appropriately are still selling quickly and close to asking. Those that are trying to get 2021 level top dollar or have crappy agents are seeing repeated price drops. There is also if the home is updated or not. Updated homes are still selling rather quickly without any or minimal drop.

Housing inventory remains ridiculously low. Yes, the amount on the market increase year over year has increased dramatically in some areas but those reasons are all over the board.

Like I said, historically since before the Great Depression, home values do not take meaningful hits when looking nationwide. Some areas get harder hit but most of the country flattens out or within 10% price correction.

Home builders were so focused on larger higher margin homes that first time buyer home builds were neglected severely. I think you’ll see a transition to builders moving towards townhouse / entry level homes for the next while. If we had another true housing crash, it would almost certainly mean a massive economic downturn similar to 08/09. Were more likely to enter a period of stagflation with ridiculously high rates from the fed, minimal economic growth while wages eventually catch up. Essentially a period similar to 1979-1983.

Russia - Ukraine is not helping the situation and if the war spills out of Ukraine, we could see some dark times. If China tries to pull some ****, it could also be bad news bears.

I’ve said this numerous times but I do believe the world needs a global depression. The middle class and lower class are already pinched and don’t have much to lose comparative to the wealthy. A depression would wipe out massive wealth and balance things out more. Would not suck? Oh god yes. Would it better mid to long term? I think so.
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Old 08-12-2022, 10:38 AM   #57
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Originally Posted by Sid03SVT View Post
Suggestion, as there have been many duplicate posts; after you hit "submit reply" just wait, don't hit it again, don't close the page, just wait, for what feels like too long. Either the connection for the server is absolute garbage, or it's being bombarded with an exceptional amount of traffic.

This is what has worked for me to avoid double posts, ymmv.
Yes that is what I am doing. Sometimes it creates a duplicate sometimes it doesn't.
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Old 08-12-2022, 12:53 PM   #58
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On the opposite end of the 'sky is falling' spectrum. A friend just sold her condo for $2mm - it was listed for 2 days.

Car related, called two Chevy dealers, on opposite sides of the state in Michigan, for Z06 allocation and there is a lead-time of 600 and 900 cars at this point - with deposits required and undisclosed markup to be decided at the time the car is built. So a few year waitlist at each dealer.
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Old 08-12-2022, 01:40 PM   #59
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On the opposite end of the 'sky is falling' spectrum. A friend just sold her condo for $2mm - it was listed for 2 days.

Car related, called two Chevy dealers, on opposite sides of the state in Michigan, for Z06 allocation and there is a lead-time of 600 and 900 cars at this point - with deposits required and undisclosed markup to be decided at the time the car is built. So a few year waitlist at each dealer.
I've never wanted a car so bad that I'd pay markup for it, let alone sign on the dotted line with "markup to be determined at build date"; big ole yikes.
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Old 08-12-2022, 01:42 PM   #60
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Originally Posted by White out View Post
On the opposite end of the 'sky is falling' spectrum. A friend just sold her condo for $2mm - it was listed for 2 days.

Car related, called two Chevy dealers, on opposite sides of the state in Michigan, for Z06 allocation and there is a lead-time of 600 and 900 cars at this point - with deposits required and undisclosed markup to be decided at the time the car is built. So a few year waitlist at each dealer.
Many of the MSRP dealers have closed their lists and are not taking any more deposits. Because they have 3-5 years worth of deposits, and I have a strong suspicion that the C8 Z06 will be built in much more fewer numbers than the C7 Z06. Allocations will be tight.

GM just announced that dealers will get allocations based on the number of C8 3LT cars they sold. This is nothing like Z06 allocations.

I think there are going to be a lot of people that will simply not be able to get one.
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Old 08-13-2022, 03:41 AM   #61
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Many of the MSRP dealers have closed their lists and are not taking any more deposits. Because they have 3-5 years worth of deposits, and I have a strong suspicion that the C8 Z06 will be built in much more fewer numbers than the C7 Z06. Allocations will be tight.

GM just announced that dealers will get allocations based on the number of C8 3LT cars they sold. This is nothing like Z06 allocations.

I think there are going to be a lot of people that will simply not be able to get one.
If the Fed lets the stock and bond market bubbles pop, most of those orders will vaporize. The wealthy have more money than they know what to do with, after trillion after trillion of Fed and government stimulus that mostly went to the top 5%.
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