Congratulations to the Dow hitting 40,0000
Comments
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Yeah it is coming. It's completely unsustainable as it is now. The irony is that Bidenomics has reversed the way the market normally operates. As we all know high rates should bring lower prices, but are not do to supply constraints cause by the fast increase in rates. It's gonna be wild that when rates begin to drop, that prices are actually going to go down as well as pent up supply will go up dramatically. Totally healthy economy. Put that one on the scoreboard right now.
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The housing bubble is going to affect places like Marin Co, Atherton, Bellevue, and Calabasas somewhat, but appetite for that kind of RE will always exist.
It’s places like Camas, Riverside, and Modesto that will get absolutely crushed….
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Hey Bob, you need a finance lesson. You will not pay a capital gains tax on the first $500,000 if you lived in the house 2 out of the last 5 years. If you did make more than $500,000 then you pay the long term capital gains on what's over that.
And you can do what a lot of your colleagues did, sell that house move to another state, buy a house fully and pay 0% interest. Isn't it nice to have that option?
Not being a dick, just wanted to inform you in case you wanted to do just that.
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Thanks for the finance lesson. My pretend equity has increased well over $1m in 12 years.
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Prices are not going to drop. There is not nearly enough housing supply and new starts are declining right now. Rates drop = more buyers in the pool competing and bidding prices up again.
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Normally you are totally right. It'll be area specific for sure. But what about what is happening right now indicates that we are operating in a rational market, most would have thought that going from 2.5% to 7% mortgages would have cratered prices, but that didn't really happen.
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Prices are set at the margin. There is still plenty of wealth in the country and the wealthy are doing well. Portland suburbs and Bend are doing well. My daughter has had three friends and two groups of friends parents move to Bend from the Bay area since covid hit. When the average working family can't move up due to the mortgage rate increase they stay put. So, you get a few sellers and a very thin market. That was true of mortgages in 2008. The Fannie Mae purchases of subprime mortgages at face value established the market for those loans. However, when the sellers became greater than the Fannie Mae purchases, the wider market resulted in the mortgage market blood bath. What can't go on forever, won't.
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Somehow I know how all this works. I used to have 8 rental homes around the country. I'm down to the last one. Been selling them off about 1 per year for tax reasons. But hey I did all this while HuskyCuck was in diapers. I like getting to pull the cash out now and I'm just done messing with them. Besides prices are up and I'm taking advantage. But then I am stupid and have no idea what I'm doing. Ask HuskyCuck. That dude needs to get laid. By a chick.
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I watched the Big Short again
Recommend
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Good parallels to 2008, but sort of the reverse is happening interestingly. Currently, the people with real equity have no incentive, and a real disincentive, to sell which creates the lack of supply. Following 2008, the people that were broke and underwater were the ones who weren't selling because they couldn't. At least in the case of 2008, those people were forced out eventually which helped the market bottom out an eventually stabilize. In the current situation, what is the forcing mechanism to get us back on track to a normal market?
