Congratulations to the Dow hitting 40,0000

[BleachedAnusDawg]

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?

For the record, housing supply was massively short prior to the record low rates. Golden handcuffs for 75% of homeowners are clearly a massive drag on supply, though. If rates drop under 6, and closer to 5, people will start selling again. Right now selling out of that low of a rate only makes sense if you have to move for work, divorce, or someone died.
Wildcard in this is many people with the locked in low rates have a lot of equity and can HELOC in to a new home and keep the current place as a rental. Could also continue to keep supply low.
I don't see the market shifting much until a lot of people who bought in the last 5 years lose their jobs and can't pay the mortgage. Only issue there is those people also have a lot of equity and can pull a second mortgage or to float until they find work.
I also heard recently that Fannie or Freddie are about to make some rules changes to allow more people to pull second mortgages at lower rates. I can't remember the exact mechanics of it, but it basically sounded like another driver of inflation waiting to happen.
Local to WA, I think the state's inability to enact meaningful condo liability reform is a huge problem. People won't stop building apartments and shift to condos until those laws are fixed. That's a huge gap in the first time buyer market.

 

[Fenderbender123]

Yeah, my net worth went up mostly because my house value doubled. Now my real estate taxes and insurance cost double. Couple that with how the price of everything else has skyrocketed, and my standard of living has taken quite a hit.

Fender, if the price of your house has doubled, I don't think any of those added costs come anywhere near the price of your house doubling. Trust me, I know. I've done the actual math.

The actual, specific amounts aren't the point. They've gone up substantially.

 

[UW_Doog_Bot]

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?

For the record, housing supply was massively short prior to the record low rates. Golden handcuffs for 75% of homeowners are clearly a massive drag on supply, though. If rates drop under 6, and closer to 5, people will start selling again. Right now selling out of that low of a rate only makes sense if you have to move for work, divorce, or someone died.
Wildcard in this is many people with the locked in low rates have a lot of equity and can HELOC in to a new home and keep the current place as a rental. Could also continue to keep supply low.
I don't see the market shifting much until a lot of people who bought in the last 5 years lose their jobs and can't pay the mortgage. Only issue there is those people also have a lot of equity and can pull a second mortgage or to float until they find work.
I also heard recently that Fannie or Freddie are about to make some rules changes to allow more people to pull second mortgages at lower rates. I can't remember the exact mechanics of it, but it basically sounded like another driver of inflation waiting to happen.
Local to WA, I think the state's inability to enact meaningful condo liability reform is a huge problem. People won't stop building apartments and shift to condos until those laws are fixed. That's a huge gap in the first time buyer market.

You also have the current situations with foreign capital flight into the US. That could literally dry up completely at any moment or it could drag out another year or two.

 

[WestlinnDuck]

More good news. New car sales aren't holding up as well as Sugar Bowl tickets. Makes sense for UAW members to vote for their own extinction. Building cars is a dirty business and should be conducted offshore.

 

[HuskyBuck]

More good news. New car sales aren't holding up as well as Sugar Bowl tickets. Makes sense for UAW members to vote for their own extinction. Building cars is a dirty business and should be conducted offshore.

Good for the consumer. This should teach people they don't need to spend their money in "investments" that depreciate when you drive them off the lot every 3 years

 

[WestlinnDuck]

More good news. New car sales aren't holding up as well as Sugar Bowl tickets. Makes sense for UAW members to vote for their own extinction. Building cars is a dirty business and should be conducted offshore.

Good for the consumer. This should teach people they don't need to spend their money in "investments" that depreciate when you drive them off the lot every 3 years

12.6 > 3. If you need some more help with remedial math, let us know. You do have boot licking down though.

 

[thechatch]

cars are more reliable now
They’re also a lot less affordable
Buying a new car is silly(I typically just lease) but we can add buying a new automobile to buying a house to the list of the things that people in their twenties can forget about going forward.

I guess that’s a good thing?

 

[HuskyBuck]

Yeah, my net worth went up mostly because my house value doubled. Now my real estate taxes and insurance cost double. Couple that with how the price of everything else has skyrocketed, and my standard of living has taken quite a hit.

Fender, if the price of your house has doubled, I don't think any of those added costs come anywhere near the price of your house doubling. Trust me, I know. I've done the actual math.

The actual, specific amounts aren't the point. They've gone up substantially.

Of course those things have gone up. My income tax has gone up from when I was 18. I don’t lament the days of paying those low income taxes with the salary I was making then.

 

[HuskyBuck]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

 

[Bob_C]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

Not if you have an LLC or S Corp. Guessing you don't have one of those.

 

[RaceBannon]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

lol

 

[HuskyBuck]

2 LLCs Bob and I get what you’re you’re getting at but as you’re fond is pointing out, most people aren’t me

 

[Sledog]

Yeah, my net worth went up mostly because my house value doubled. Now my real estate taxes and insurance cost double. Couple that with how the price of everything else has skyrocketed, and my standard of living has taken quite a hit.

Fender, if the price of your house has doubled, I don't think any of those added costs come anywhere near the price of your house doubling. Trust me, I know. I've done the actual math.

The actual, specific amounts aren't the point. They've gone up substantially.

Of course those things have gone up. My income tax has gone up from when I was 18. I don’t lament the days of paying those low income taxes with the salary I was making then.

How much have they gone up for you in two years?

 

[HuskyBuck]

@sledog The value of my LLCs? Quite a bit.

 

[thechatch]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

I’ve done both. Less potential headaches with the lease. I did use the Sec179 a couple of times on purchases that worked out well, but some of the provisions that made that so attractive have gone away, per my CPA, so for company vehicles, I’ve been leasing the past 2-3 of years. We have a couple of dealerships that we work with, so the DP on a lease is almost nothing, and the monthly’s are lower. Not really all that interested in leftover equity on a Range Rover or Chevy Suburban. If I didn’t have the S-Corp I might be more inclined to purchase, but I see little value in buying new.

You can’t relate so I don’t expect you to understand.
HTH

 

[HuskyBuck]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

I’ve done both. Less potential headaches with the lease. I did use the Sec179 a couple of times on purchases that worked out well, but some of the provisions that made that so attractive have gone away, per my CPA, so for company vehicles, I’ve been leasing the past 2-3 of years. We have a couple of dealerships that we work with, so the DP on a lease is almost nothing, and the monthly’s are lower. Not really all that interested in leftover equity on a Range Rover or Chevy Suburban. If I didn’t have the S-Corp I might be more inclined to purchase, but I see little value in buying new.

You can’t relate so I don’t expect you to understand.
HTH

I thought we weren't supposed to talk about your personal situations and what the average American was facing. The vast majority of Americans are not business owners so your situation isn't applicable. My advice is what most Americans should be following….as usual.

 

[Bob_C]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

I’ve done both. Less potential headaches with the lease. I did use the Sec179 a couple of times on purchases that worked out well, but some of the provisions that made that so attractive have gone away, per my CPA, so for company vehicles, I’ve been leasing the past 2-3 of years. We have a couple of dealerships that we work with, so the DP on a lease is almost nothing, and the monthly’s are lower. Not really all that interested in leftover equity on a Range Rover or Chevy Suburban. If I didn’t have the S-Corp I might be more inclined to purchase, but I see little value in buying new.

You can’t relate so I don’t expect you to understand.
HTH

I thought we weren't supposed to talk about your personal situations and what the average American was facing. The vast majority of Americans are not business owners so your situation isn't applicable. My advice is what most Americans should be following….as usual.

DM me if you want help with your taxes.

 

[thechatch]

Leasing is a dumb idea too. Buy one fucking car and drive it into the ground.

Everyone you buy or lease a car, you might as well just burn your cash in a fireplace.

I’ve done both. Less potential headaches with the lease. I did use the Sec179 a couple of times on purchases that worked out well, but some of the provisions that made that so attractive have gone away, per my CPA, so for company vehicles, I’ve been leasing the past 2-3 of years. We have a couple of dealerships that we work with, so the DP on a lease is almost nothing, and the monthly’s are lower. Not really all that interested in leftover equity on a Range Rover or Chevy Suburban. If I didn’t have the S-Corp I might be more inclined to purchase, but I see little value in buying new.

You can’t relate so I don’t expect you to understand.
HTH

I thought we weren't supposed to talk about your personal situations and what the average American was facing. The vast majority of Americans are not business owners so your situation isn't applicable. My advice is what most Americans should be following….as usual.

lol