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Investors Are Now Faced With The Reality That They’re Going To Have To Come Up With Extra Funds

A report from Business Insider. “I felt pressured to buy a nearly $1 million house at age 27 — and I deeply regret it. This as-told-to essay is based on a conversation with Elsa, a 27-year-old software engineer who asked that only her first name be used for privacy reasons, about her experience rushing to buy a house in Chantilly, Virginia. Their mortgage payment is more than triple their previous monthly rent, and they’ve been forced to make changes to their lifestyle to afford their home. ‘We were renting a small one-bedroom apartment for $1,800. We were saving around $4,000 a month, so we thought that a $6,000 monthly mortgage payment would be doable. We were expecting rates in the 4% or maybe higher 3% range, but in the end we ended up with a 5% interest rate.”

“‘Our take-home pay each month is a bit more than $11,000, and our monthly mortgage payment is about $6,800. But we’ve been trying to pay a little bit more in order to save on interest. I’ve heard people say to borrow less than what the bank will allow you to. I think we should have done that, but instead, we almost maxed out on our loan. Now that we’re in the house making those monthly payments, we’ve been piling on credit-card debt for the past few months. We definitely didn’t anticipate having as many repair expenses. The house we bought is older, so we have been overwhelmed with repairs like multiple water leaks.'”

“‘Over the past few years, I’ve seen home prices going up, and I don’t see why they would go down anytime soon. Maybe we needed to buy something and then suffer a bit for the first few years. Hopefully our salaries will increase and we’ll be able to get by more comfortably.'”

Community Impact on Texas. “Prices of homes are continuing to trend downward as inventory is on a steady uptick in Cedar Park and Leander, according to Austin Board of Realtors year-end report. In 2022, the peak median price of homes in Leander and Cedar Park was $629,000, according to ABoR data. Home prices in both cities significantly dropped to $531,000 in December, which is a 15.6% decrease. There has also been a steady rise in the amount of available inventory on the market in Leander and Cedar Park since early 2022.”

Islander News on Florida. “According to statistics gathered from MLS data, Ron Shuffield,CEO of Berkshire Hathaway HomeServices EWM Realty in Coral Gables showed Miami-Dade County remains a stable market, and although sales have been down, home values still climbed. Shuffield told his viewers he believed, ‘We’re going to see a softening of prices (this year) with more inventory coming.'”

“He said, during the pandemic spike in values, from the spring of 2020 to the spring of 2022, ‘people were pushing (the median price) to $525,000, $540,000, $580,000, but in the last six months it’s come down to $539,000 today, so that shows there’s been some anxiety in the market. (But) we don’t expect a straight line down,’ he added, pointing to a graphic.”

Bizwest on Colorado. “For much of 2021 and the first half of 2022, residential housing sales were overheated, with bidding wars driving up prices of single-family homes. Properties were selling for well above asking price, with, at times, a dozen or more offers. It wasn’t sustainable, and a cooldown provides the sector — including real estate agents — a chance to catch their breath. The market actually is seeing some depreciation in value, noted Todd Gullette, managing broker with Re/Max of Boulder, pausing the double-digit appreciation of recent years.”

NBC Bay Area in California. “Home prices are still on the decline in the Bay Area from the same period a year ago, according to Redfin. In San Francisco, prices have seen the greatest drop nationally, down 15% year over year. Oakland was fourth with an 11.6% drop, and San Jose was sixth with a decline of 10.6%. ‘There’s no longer this strong pull of workers to the area to get a tech job. You can get a tech job just about anywhere. And a lot those tech San Francisco (companies) are laying off workers, so maybe people don’t feel like it’s really worth it to pay for a home when job security is not as great as it used to be,’ ‘Daryl Fairweather, chief economist with Redfin, said.”

Hoodline in California. “A real estate firm based in China is causing some major frustrations in San Jose because of a lack of action on a few major development projects. The drama comes after a top executive for Z&L Properties was arrested in London over a bribery and corruption case in San Francisco. Z&L Properties, which operates a Bay Area office in Foster City, was supposed to start building a housing and retail highrise at the site of the old Greyhound Bus Station in downtown San Jose at 70 South Almaden Avenue. But now Z&L appears to have abandoned those plans and has just listed the property for sale, as reported by San José Spotlight.”

“There’s also concern about another Z&L development called 188 West St. James, which is the address of the project, still hasn’t been fully completed. The project features two large housing towers, but so far, only units in one tower are being sold. Bob Staedler with Silicon Valley Synergy predicted to the San Jose Spotlight that the project might soon fall into foreclosure because of the $330 million in debt that was used to build the towers. To make matters worse for Z&L, its principal executive, Zhang Li, is now facing charges for allegedly trying to bribe officials with the city of San Francisco in order to obtain permits for a large project there.”

The Sydney Morning Herald. “Nearly all of those accused of involvement in a $10 billion money laundering operation smashed by the Australian Federal Police this week have swapped their Sydney mansions for remand cells after appearing in court on Thursday. In its largest-ever asset seizure, AFP officers took possession of at least $150 million worth of property and luxury assets and arrested nine suspects during 13 raids across Sydney on Wednesday, cutting off a shopping spree that included 360 hectares of land purchased for a new suburb near Sydney’s new international airport, worth $47 million.”

“On Thursday, AFP Assistant Commissioner Kirsty Schofield said restraining orders had been obtained on 20 Sydney properties, including two eastern suburbs homes with a combined value of $19 million. Luxury cars, handbags, jewellery and watches – some of which ‘cost more than what an individual would earn in a lifetime’ – were also seized. She said the large land purchase near the airport ‘was for profit.’ The group is alleged to have acted ‘like an underground bank’ with branches all over the world, Schofield said, ‘enabling it to illegally shift money for individuals and organised crime groups.'”

“Vaucluse resident Stephen Xin, the local business partner of fallen global casino industry tycoon, Alvin Chau, is accused of being the ringleader of the operation. He was arrested on Wednesday along with his wife Yi Ming Wang, Bellevue Hill man Zhaohua Ma and six others. Xin and Ma, along with Epping man Jin Yang and Youming Chen from Mays Hill, near Parramatta, were charged with conspiring to deal with more than $120 million intended to become an instrument of crime.”

“Liu’s role in the alleged scheme, and that of chartered accountant Luo, is expected to increase pressure on the federal government to introduce long-stalled Tranche 2 laws, which would force accountants, real estate agents and lawyers to face the same obligations as bankers and casinos to report suspected money laundering.”

Blackburn News in Canada. “The housing market in Windsor-Essex continued its cool down in January with a 46.72 per cent drop in sales. January marked the eleventh straight month housing sales in the region fell. The average selling price in Windsor-Essex was $516,117, down from $644,765 a year ago. Prices peaked last March at $723,739 and have fallen 28 per cent since then.”

Global News in Canada. “The head of the realtors association in the Hamilton, Ont., area is suggesting there’s ‘really good news’ in the market, with supply for first time buyers looking better via an increase in inventory. The average residential price across the market moved to $791,551 in January compared to the same month in 2022 when prices were around 25 per cent higher, and over $1 million. Unit sales were down 26 per cent from January 2022 with just 540 units moving from inventory that spiked 285 per cent year over year to 1,577 homes. The lowest average prices for January were in Hamilton Centre, where a home was around $583,651, down 13.9 per cent year over year.”

The Times Colonist in Canada. “The board’s benchmark price for a single-family home in Greater Victoria dropped in January to $1.117 million from $1.159 million in January 2022, while the median sale price dropped to $1.065 million from $1.25 million last January. The benchmark price of a condominium in the region, on the other hand, rose to $569,900 in January, up from $552,900 a year ago, while the median sale price dropped to $530,000 from $603,420. The benchmark price of a townhouse also rose in January to $785,100, up from $765,000 12 months earlier, while the median sale price dropped to $620,000 from $861,250.”

The Globe and Mail in Canada. “In the last few years, Frank Giralico, a sales representative for Capital North Realty, was doing a brisk trade in the Greater Toronto Area’s preconstruction assignment market, in which investors ante up a down-payment on an as-yet unbuilt condo and then flip the rights to purchase it for a profit before the unit is constructed, never actually intending to own it.”

“That market hums along when prices are going up, and seizes up when they’re coming down, or when interest rates have spiked. ‘I focused a lot of my business on that because the market was geared that way,’ he admits. Things are different now: ‘I’ve seen investors who are now faced with the reality that they’re either going to have to come up with extra funds because the mortgage rate has increased so much that they may not be able to close.'”

The Canadian Press. “The Greater Toronto Area’s real estate board saw home prices plateau in January after being in free fall and depressing sales since spring, but brokers see a return to activity already taking shape. The flattening follows several months of steady declines, which saw prices fall nearly 20 per cent from their spring peak and 16.4 per cent from a year ago. Once the new year began, Michelle Gilbert, a Toronto broker, said sellers that reached out to her were mostly people interested in upgrading their homes to get a bit more space.”

“‘They have accepted the fact that their house or condo will sell for X amount and they’re not going to make much of a profit,’ she said. ‘A lot of them are breaking even, but are willing to do that to attain what’s on the other side for a lower price.'”

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This Post Has 144 Comments

  1. ‘Maybe we needed to buy something and then suffer a bit for the first few years’

    That’s right Elsa, hold yer ground. Don’t give it away.

    2. Cases like this blow my mind. And the fact that they’re common place. Had a couple friends over the other night. They’re making over 200k between the two of them and not just living pay check to pay check, but like the story they complained over the interest they’re paying on credit card debt. Don’t know where to even start….

        1. Notice how investment houses like Fidelity like to show people living it up in retirement. Driving luxury cars, sailing on their private yacht, staying at 5 star hotels, living in a McMansion.

          Very true, that it is never enough for most people.

          1. These are the same jokers who think we’re going to need 80% of our pre-retirement income to sustain our lifestyle. Well, sure, if you go two cruises a year, never pay off a house, and have kids in the basement failing to launch.

    1. So what happens if you can’t pay your clothing rental bill to Davos Inc.? Do they send a repo man out who strips you naked and kicks you in the caboose?

    2. Only at the end does she start making any sense: “In fact, the only way to be truly green is to walk over to your local thrift shop — or not consume at all. ”

      I’m a fashion plate/clotheshound myself. Fifteen years ago there was a plethora of stylish business-casual sportswear — likely because baby boomer women were in their 50s and still cared how they looked at the office. But within the past five years, women’s fashion has gone to crap. So last fall I re-discovered thrift stores and I’m happy as a clam. I can put together a basic outfit under $15 bucks and fill in with new hosiery from Target.

      1. You’re probably overdressed for .gov work but grow your nails to 3″, get dreadlocks, and sport a $1400 iPhone and you’ll fit right in.

        Drive through DC at 4:30 and you’ll see.

  3. ‘The Greater Toronto Area’s real estate board saw home prices plateau in January after being in free fall and depressing sales since spring, but brokers see a return to activity already taking shape’

    What I’ve noticed is a complete lack of this discussion: you got FB’s standing in the cold stamping their little feet. You got people who have been yuugely schlonged in 6 months. Foreclosures are piling up. And do these UHS lament their boosterism in this ‘unsustainable’ turn of events? Oh no, it’s off to the races! Shameless parasites.

    ‘Prices peaked last March at $723,739 and have fallen 28 per cent since then’

  4. ‘In 2022, the peak median price of homes in Leander and Cedar Park was $629,000, according to ABoR data. Home prices in both cities significantly dropped to $531,000 in December’

    These sh$tholes aren’t even in Austin.

  5. We were expecting rates in the 4% or maybe higher 3% range, but in the end we ended up with a 5% interest rate.”

    Real inflation is at least double what our fake, Soviet-style CPI stats say it is. You have a lot more pain in your future, Elsa, as investors balk at buying monetized debt that’s going to be printed away by the Fed, given the pitiful ROI.

  6. I think we should have done that, but instead, we almost maxed out on our loan. Now that we’re in the house making those monthly payments, we’ve been piling on credit-card debt for the past few months. We definitely didn’t anticipate having as many repair expenses.

    The stupid, it burns.

  7. Hopefully our salaries will increase and we’ll be able to get by more comfortably.’”

    More likely your job will be outsourced to Mumbai by the same globalist Quislings you no doubt voted for.

  9. A bit of math – Before Fed/state/local taxes that’s close to a $300,00/year household income.

    And YOU THREW IT AWAY to be a debt slave.

    “‘Our take-home pay each month is a bit more than $11,000,

      1. article said “take home pay” was 11k a month. That’s net. So figure gross is probably 50% again on top of that. So 15 to 16k a month. (200k a year).

        1. My household is $200,000 a year in the suburbs of an expensive midwestern city. There’s no way we could afford a $1,000,000 house even with interest rates in the 3’s. Especially with inflation. I looked at some budget figures the other day and we were not able to save nearly as we wanted to. We had our most expensive gas bill in our 15 years in our house even with a very mild winter. Food, taxes, cost of living ate up a lot. I drive a 15 year old domestic with 160k miles and it leaks oil and had no heat (now fixed) but I’m paying $45,000 for a car that cost $33k three years ago.

          1. But I bet you don’t Door Dash from the Thai local every night, own the new iPhone every year, have 13 subscription services for beer or wine of the month, two Pelotons (w/subscriptions), etc. etc. etc.

          1. They’ll have to get rid of Heels first and replace her with Big Mike. Once the media starts to attack Heels, we will know it has begun.

  12. Home prices in both cities significantly dropped to $531,000 in December, which is a 15.6% decrease.

    Is that a lot?

  13. In San Francisco, prices have seen the greatest drop nationally, down 15% year over year. Oakland was fourth with an 11.6% drop, and San Jose was sixth with a decline of 10.6%.

    It’s almost like there’s a correlation between Democrat-Bolshevik malgovernance & plunging property valuations.

  14. Welcome to the property ladder!

    And you didn’t even talk about property taxes, HOA dues, insurance, utilities (getting pretty cold today!) and…wait for it….

    Not Maintenance but replacement of stuff that wears out (and you should be planning for NOW).
    Hot water tank – 12 years – $1,500
    Roof – 25 years – $25,000
    Furnace – 20 years – $6,000
    Etc.

    You are heading towards bankruptcy – making $300,000/year.

    “Now that we’re in the house making those monthly payments, we’ve been piling on credit-card debt for the past few months. We definitely didn’t anticipate having as many repair expenses. The house we bought is older, so we have been overwhelmed with repairs like multiple water leaks.’”

    1. So hilarious that in the story they think their salaries are the issue…..”Hopefully our salaries will increase and able to get by more comfortably.”
      Yeah….you’re salaries are the problem. Dumba$$!

  15. Oh dear…I fear a bursting housing bubbles could cause Aussie FBs to lose faith in their WEF Quisling government.

    A top NSW judge is bracing for courtrooms in the Supreme Court to be clogged with home repossession cases as interest rates rise and homeowners fall behind repayments.

    https://www.news.com.au/finance/real-estate/buying/supreme-court-judge-predicts-property-repossessions-to-increase-significantly-as-interest-rates-rise/news-story/b84113f443003a0f8fe876b6f48a4559

  16. The other side?

    Is that like becoming a FB, trapped, jingle mail and bringing “HOW MUCH” to the table???

    “‘They have accepted the fact that their house or condo will sell for X amount and they’re not going to make much of a profit,’ she said. ‘A lot of them are breaking even, but are willing to do that to attain what’s on the other side for a lower price.’”

  17. Blackburn News in Canada. “The housing market in Windsor-Essex continued its cool down in January with a 46.72 per cent drop in sales.

    Is that a lot?

  19. Things are different now: ‘I’ve seen investors who are now faced with the reality that they’re either going to have to come up with extra funds because the mortgage rate has increased so much that they may not be able to close.’”

    Die, speculator scum.

  20. The US Department of Defense has confirmed that the Chinese spy balloon drifting unimpeded over the USA has been broadcasting a message in English, Spanish, and Mandarin: “Realtors are liars.”

  22. Your federal income taxes are paying for all of this.

    Russia Today — Pentagon will allow Ukraine to fire long-range missiles at will (2/3/2023):

    “It is up to the government in Kiev to decide how to use new rockets being delivered for the US-supplied HIMARS launchers, the Pentagon said on Friday. The statement is a confirmation that the latest batch of munitions the American taxpayers are funding will include Ground Launched Small Diameter Bombs (GLSDB).

    Ryder also confirmed that the US won’t stand in the way of Ukrainians using the missiles to strike deep inside Russia.

    “When it comes to Ukrainian plans on operations, clearly that is their decision. They are in the lead for those,” he said on Friday. “So, I’m not going to talk about or speculate about potential future operations, but again, all along, we’ve been working with them to provide them with capabilities that will enable them to be effective on the battlefield.”

    https://www.rt.com/news/570935-pentagon-ukraine-glsdb-missiles/

    American taxpayers do not “stand with Ukraine” they proudly stand with Russia, because Russia is the future of Christian European civilization.

    The West is dying. And nothing can save it. The Christian Nationalist Homeland will be established in Russia and Eastern Europe.

    Zelensky is not a Christian. Neither is the majority of Pedo Joe Biden’s cabinet, and don’t think that American taxpayers are not #Noticing.

    “Liberal Democracy” as a concept means that the Christian citizens of a nation are ruled over by unelected globalist bureaucrats, and all of your freedoms are being erased.

    You’re living in Weimar America.

    1. The m30 and m31 rockets fired from the HIMARS and the easily targeted by air defense GLSDB are hugely expensive and lack real punch as they carry a relatively small warhead. But expensive means Eisenhower’s feared military industry complex shareholders are getting sweet returns.

    2. I tried to find out (via DuckDuckGo) what the estimated military casualties/deaths both Russia and Ukraine for 2022. No matter how Repost from yesterday:
      I searched the results were all about touting Russian casualties with wildly different estimates; nothing anywhere about total Ukraine military casualties/deaths. I restricted time for articles in last month. Many articles about Ukrainian civilian casualties. Bit of censorship and propaganda I think.
      Does anyone know what these numbers are? or know where I can find them?

  24. 𝗔𝗹𝗲𝘅𝗮𝗻𝗱𝗿𝗶𝗮, 𝗩𝗔 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟰% 𝗬𝗢𝗬 𝗔𝘀 𝗘𝘅𝗰𝗲𝘀𝘀, 𝗘𝗺𝗽𝘁𝘆 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗕𝗹𝗮𝗻𝗸𝗲𝘁𝘀 𝗡𝗼𝗿𝘁𝗵𝗲𝗿𝗻 𝗩𝗶𝗿𝗴𝗶𝗻𝗶𝗮

    https://www.movoto.com/va/22206/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘕𝘰𝘝𝘈 𝘣𝘳𝘰𝘬𝘦𝘳 𝘴𝘵𝘢𝘵𝘦𝘥, “𝘛𝘩𝘪𝘴 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘪𝘴 𝘳𝘪𝘥𝘥𝘭𝘦𝘥 𝘸𝘪𝘵𝘩 𝘧𝘳𝘢𝘶𝘥. 𝘕𝘰𝘸 𝘱𝘳𝘪𝘤𝘦𝘴 𝘢𝘳𝘦 𝘤𝘳𝘢𝘵𝘦𝘳𝘪𝘯𝘨.”

      1. 11000 is take home.

        I did a quick calculation, assuming Fed Std deduction, SS, and $30K for clownifonia state income tax (couldn’t be bothered with their brackets). The top Federal tax bracket for a 300K couple is 24%.

        The tax grand total is just over 100K, so monthly take home would be over $16K

    2. A moment of silence for those LGBTQLMNOP heroes in the diversity, equity and inclusion department who were able to turn a degree in queer gender studies into a “tech job”, at least for a couple years:

      “At Twitter, the diversity, equity and inclusion team is down to just two people from 30, one former employee said. A DEI worker who was let go from a popular ride-share company said their job search has stalled as other technology companies assess their finances. And just before getting the axe at separate tech giants this fall, two DEI specialists said leadership had stopped setting long-term goals for their departments entirely.”

      Big Tech Layoffs Are Hitting Diversity and Inclusion Jobs Hard

      https://www.bloomberg.com/news/articles/2023-01-24/tech-layoffs-are-hitting-diversity-and-inclusion-jobs-hard#xj4y7vzkg

      1. Big Tech Layoffs Are Hitting Diversity and Inclusion Jobs Hard

        Suddenly, being productive, income generating and profitable matter again.

        1. “Suddenly, being productive, income generating and profitable matter again.”

          Those words are violence! and symptoms of a systemically racist, white privilege, cis male normative society. Next thing you’re going to say is that I have to show up on time for meetings if I want to keep my job. Homie don’t play that.

        2. The woke stuff is getting pitched overboard entirely, it would seem. Shareholders got their a$$es pounded and viola! it’s just hateful, debate stifling garbage that’s bad for business.

          1. It would be nice when it impacts the commercials. I hardly watch broadcast, maybe occasional sports, but I’m tired of the two Dad commercials.

          2. but I’m tired of the two Dad commercials

            Network TV has become unwatchable. Are the two dad ads also mixed race?

          1. Those sports leagues also figured out that if they kept up the DEI charade for much longer they were gonna get roasted, if not sued, for not employing enough white people, or short people, or trans men, or what have you.

    1. ZERO accountability. Always some irresistible external force pushing these “victims” into making poor choices, and not their own galactic sense of entitlement.

  27. Denver’s homeless population continues to grow despite more spending (2/3/2023):

    “A point-in-time survey that captures a one-night snapshot of homeless in cities conducted in January 2022 counted 4,794 people living on Denver’s streets. That represents a 44% increase over the same survey’s results five years earlier.

    “The problem that we’re addressing is worse,” said Benjamin Dunning, historian for Denver Homeless Out Loud, a nonprofit advocacy group.

    In 2022, Denver budgeted $152,306,150 for housing and homelessness. That number grew to $180,948,669 for 2023, a 19% increase. In 2019, that budget was only $73,159,330, less than half what was budgeted last year.

    Dunning said that money is making a difference, but there is still a long way to go.

    “We’re putting hundreds of millions of dollars into a billion-dollar problem that is growing,” he said. “Denver is spending what they can, but it isn’t enough.”

    https://www.denver7.com/news/investigations/denvers-homeless-population-continues-to-grow-despite-more-spending

    4,794 is a lowball number, there’s at least 20,000 out on the streets. Keep paying those property taxes, $180 million isn’t enough, no amount will ever be enough.

    1. Denver’s homeless population continues to grow despite more spending (2/3/2023)

      The more free sh!t you offer, the more homeless you will get. That’s why the homeless call Seattle “Freeattle,” and show up in droves. Word gets around. Watch the documentary “Seattle Is Dying” for free on the tube. A lot of the troublemakers aren’t even locals, they showed up for some free sh!t. And they have a Part II of the Seattle Is Dying doc now, as well.

  28. A reader sent these in:

    If you are not familiar with the #bigflip thesis, coined by the great @INArteCarloDoss, the bottom line is this:
    -Labor inflation is entrenched and remains very hot (holding core inflation high)
    -Goods will inflect higher (leading to more volatile inflation
    The consequences are:

    https://twitter.com/lawhon_sam/status/1621599049966141440

    Same guy who’s been screaming at the top of his lungs that inflation is dead and the Fed will cut rates just a week ago!

    https://twitter.com/TheMaverickWS/status/1621670698627506176

    Lance Lambert

    The average 30-year fixed U.S. mortgage rate jumps to 6.19%. That’s a big jump. It was 5.99% on Thursday.

    https://twitter.com/NewsLambert/status/1621559115557355520

    CarDealershipGuy

    Ford just hit a 6-year RECORD LOW in sales.
    Deals on its cars are worsening.
    Stock is in absolute shambles 📉
    Is the American ICON actually failing?
    Call your Grandpa and tell him you LOVE him before you read this… It’s a DOOZY 👇

    https://twitter.com/GuyDealership/status/1621560194026053638

    CarDealershipGuy

    you’re not depressed. you’re just driving a German car that’s leaking oil and out of warranty

    https://twitter.com/GuyDealership/status/1621496532376715264

    I’m sorry this looks awful

    https://twitter.com/amazonholder1/status/1621539709448032257

    Powell is another Arthur F. Burns. He falls short of the decisive leaders like Paul Volcker, who used to smoke cigars during his meetings and didn’t cave to pressure. Unemployment is currently at its lowest point in 53 years. Inflation is coming back with vengeance.

    https://twitter.com/MFHoz/status/1621531710297964545

    To buy a median-price home in the US, an average person would need to make about $107,000 annually, up from about $74,000 a year earlier, per Bloomberg.

    https://twitter.com/unusual_whales/status/1621539257000263680

    “Do I take any blame for inflation? No. Because it was already there when I got here, man”
    INFLATION WAS 1.4% AT THE TIME OF HIS INAUGURATION

    https://twitter.com/texasrunnerDFW/status/1621564601543303169

    Another $4.25 trillion and the Fed will be back to early 2020 levels.

    https://twitter.com/RudyHavenstein/status/1621322092473126912

    Joe Davis, global chief economist at Vanguard, on a more outlook- and data-dependent Fed: “After any pause, it is equally as likely the Fed is raising rates again rather than cutting because the labor market bends but doesn’t break.”

    https://twitter.com/NickTimiraos/status/1621582523347177472

    George Gammon

    Credit card debt almost 1 trillion as delinquencies spike. In other news unemployment at lowest level since 1969. 🤔

    https://twitter.com/GeorgeGammon/status/1621532468514885634

    It’s a hard assertion to disagree with. As Martin and I discussed on DFA yesterday, there are also some early signs that elements of U.S inflation could reaccelerate. All in all a very challenging set of circumstances for the housing market.

    https://twitter.com/AvidCommentator/status/1621748137122762752

    A long, shallow rolling recession is a possible scenario. I think more likely rolling scenario will encounter a cavernous pothole in the form of a credit market crash

    https://twitter.com/Halsrethink/status/1621645535642877953

    2. “Do I take any blame for inflation? No. Because it was already there when I got here, man”

      Can you imagine the lies his father told around the “kitchen table” when he was a kid.

      1. “President Biden did not lie. He specifically said ‘Inflation was already there when I got here.’ That is true. By the time Biden got here to give his speech, inflation was already there.”
        PolitiFact and Karine Jean-Pierre

  32. “I felt pressured to buy a nearly $1 million house at age 27 — and I deeply regret it. This as-told-to essay is based on a conversation with Elsa, a 27-year-old software engineer”

    Evidently anyone in Elsa’s family who was able to give her financial advice had already been killed in some horrific accident.

    1. Not necessarily. I tried to pass advice to my nieces through my sister last year, but everyone was so excited about the prospect of overpaying for homes purchased in a mania that noone would listen to my concern.

      2. Women are scheming idiots, yet somehow the men allow the harpies to p-whip the IQ points out of them. See “Commercial, Suzanne” and “Winsor, Henry” for examples.

        1. “It takes a village.”

          My mom was a stay at home mom, raising 4 children. The same could be said for all of my friends’ moms when I look back. I remember all of the stay at home moms being very happy with their lives, and the husbands could easily support the household on their salaries.

          I don’t think where we are today is progress at all, and I see a lot of unhappy people, especially women. They were sold a bill of goods. “You can have it all.” Sure, while you work until you drop and never achieve it.

          1. “They were sold a bill of goods.”

            I saw way too many women at work spending more than they earned on self gratification, e.g., top of the line SUV, expensive clothes, hair and nails done weekly, etc., and you’re right, they’re unhappy.

          2. I remember my mother saying, oh great, you get to do everything you had to before, but now you have to do it after you get home from your job. I didn’t get the impression at the time that she was trying to tell me something, but I was going to all those NOW meetings downtown.

          3. I don’t think where we are today is progress at all, and I see a lot of unhappy people, especially women. They were sold a bill of goods. “You can have it all.” Sure, while you work until you drop and never achieve it.

            Agreed. Having it all is a farce. Something has to give.

  33. 𝗦𝗮𝗹𝘁 𝗟𝗮𝗸𝗲 𝗖𝗶𝘁𝘆, 𝗨𝗧 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟲% 𝗬𝗢𝗬 𝗢𝗻 𝗦𝘂𝗿𝗴𝗶𝗻𝗴 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗔𝗻𝗱 𝗦𝗼𝗮𝗿𝗶𝗻𝗴 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗗𝗲𝗳𝗮𝘂𝗹𝘁𝘀

    https://www.movoto.com/ut/84101/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘣𝘳𝘰𝘬𝘦𝘳 𝘤𝘰𝘯𝘤𝘦𝘥𝘦𝘥, “𝘐𝘧 𝘺𝘰𝘶’𝘳𝘦 𝘢 𝘣𝘶𝘺𝘦𝘳, 𝘵𝘩𝘦 𝘣𝘳𝘰𝘬𝘦𝘳 𝘪𝘴 𝘭𝘺𝘪𝘯𝘨 𝘵𝘰 𝘺𝘰𝘶. 𝘐 𝘬𝘯𝘰𝘸 𝘢 𝘭𝘪𝘢𝘳 𝘸𝘩𝘦𝘯 𝘐 𝘩𝘦𝘢𝘳 𝘰𝘯𝘦. 𝘐’𝘷𝘦 𝘣𝘦𝘦𝘯 𝘭𝘺𝘪𝘯𝘨 𝘮𝘺 𝘦𝘯𝘵𝘪𝘳𝘦 𝘭𝘪𝘧𝘦.”

  34. “‘Our take-home pay each month is a bit more than $11,000, and our monthly mortgage payment is about $6,800.”

    $6,800 / $11,000 = 61.8%. Is that cheaper than renting?

    “But we’ve been trying to pay a little bit more in order to save on interest.”

    The best way to save on interest is to not overpay on principal.

    “I’ve heard people say to borrow less than what the bank will allow you to. I think we should have done that, but instead, we almost maxed out on our loan.”

    Why?

    1. For comparison, Zillow sez the home we rent is “worth” over $1 million, and our rent is less than half of Elsa’s mortgage.

    2. “Now that we’re in the house making those monthly payments, we’ve been piling on credit-card debt for the past few months.”

      They are paying extra on the mortgage on top of 61.8% of their income to save on interest, then racking up credit-card debt to cover home maintenance costs.

      What is wrong with that picture?

      1. What’s obviously wrong is that she’s using 19% interest rate credit cards to pay off 5% interest rate mortgage.

        Her other issue is that she’s 27, which means her parents are either late boomer, or worse, GenX. Neither cohort will subsidize their kids the way early Boomers did. Later boomers don’t have two dimes and GenX is too p-o’d to give a penny.

        1. What’s obviously wrong is that she’s using 19% interest rate credit cards to pay off 5% interest rate mortgage

          If there’s a long-term plan to shift the debt from secured to unsecured credit lines, it could be a smart move

  35. “I felt pressured to buy a nearly $1 million house at age 27 — and I deeply regret it.”

    I bet the sellers happy and why didn’t they get a home warranty ? I even got one on a short sale and used it for all kinds of things.

    1. If you bought in a short sale, that suggests there were many sellers and few buyers, conferring market power to buyers.

      By contrast, Elsa bought when homes were flying off the shelves like hot cakes, with too many buyers for a very limited inventory, conferring market power to sellers.

      “Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.”

      — J. Paul Getty

  36. “‘Over the past few years, I’ve seen home prices going up, and I don’t see why they would go down anytime soon.”

    Ah, to be young and naive. It’s only money®.

    1. When I was 27 and just starting out, I was in a similar position to Elsa’s: I had a good income, and was in a financial position that would have allowed me to buy a home. But interest rates were high in the pre-Quantitative Easing era, and competition for homes was fierce. I spent my would-be down payment money on longterm Treasurys yielding over 8%. Five years later, a recession had taken hold, interest rates had dropped, and housing inventories were flush. I sold my Treasuries, whose value had increased, to fund the downpayment on my first home purchase. It was nice to shop with lots of attractively priced homes on the market to choose from and little competition from others, as few others were buying. For some odd reason, bulls go into hibernation when the bears come out to play.

      1. When I was 27 buying a house was not in my top 20 list of things to do. I guess I could kind of understand her urgency if she had a couple kids already, but in her situation it was pure FOMO and greed. At least she’s young enough to financially overcome it.

        When I started talking to friends and family about a housing bubble in 2005, they looked at me like I was insane, and since the last nationwide housing crash had been during the 1930s, their ignorance could at least be understood. Today we’re only 10 years down the road from a housing crash, and every one of these buyers has no excuse.

      2. I bought my first place right out of college. At that time, I was able to buy a house in Irvine for just over $100,000. And I’ll always remember how absolutely everyone told me I was crazy to do it because I could rent for less. And they were correct: I could’ve rented for less.

        Of course, fast forward 30 years and the house is paid off, is “worth” seven times what I paid for it, and brings in $3000 a month in rent. What’s the old saying? “Your mileage may vary“. I really love that place and lived there for 15 years. If my wife and I hadn’t gotten married, I might still be living there today.

        Nevertheless, I’m glad I did not listen to the advice so many people about renting.

        1. “Of course, fast forward 30 years and the house is paid off, is “worth” seven times what I paid for it, and brings in $3000 a month in rent.”

          No doubt investing in California real estate over the last 40 years has been one of the best investments in the world. But as you said, your mileage may vary now that the state has turned in Mexico del Norte and is run by socialists.

          1. I’ve been privy to some long held land, commercial and shack sales recently, in two red hotness states. Being an accountant, I look at the whole picture including opportunity costs. Without even getting out a calculator I can say it’s a terrible investment just on property taxes alone.

          2. Without even getting out a calculator I can say it’s a terrible investment just on property taxes alone.

            I know raw land holders who will never, ever even get back a fraction of the taxes they have paid on holding it. The best that can be said for raw land is it’s a place where you can pay to store some of your wealth, if you have it.

            But good luck ever getting your money back out in a down market. Raw land is next to impossible to sell at that point. It’s very difficult to find buyers even in the best of times, because it’s typically an all cash deal.

          3. Right the big money is newer guberment backed loan real estate, which shoots up and shazaam! up go the taxes! You know all those whopping deductions you can use fer taxes? That’s out of pocket cash too.

          4. “Without even getting out a calculator I can say it’s a terrible investment just on property taxes alone.”

            With Prop 13 in California, people who bought 40 years ago are paying next to nothing in property taxes- about 1k. People who bought houses for 40-50k have houses that 3-4 years ago were worth $2 million. You think that’s a terrible investment?

        2. Market perspective is extremely important. Your point is valid, however, Irvine has different market dynamics than most places. I will spare everyone a wall of text on this topic but suffice to say it is very important to consider where you are in the credit cycle and to have a handle on what the population growth/decline trends are for the area you are considering. Timing is very important in these matters. For most areas of the country it would be very hard to argue that now is a good time to buy when properly taking these issues into consideration.

        3. “worth” seven times what I paid for it [$700,000], and brings in $3000 a month in rent.

          One of these things is not like the other.

          4. Blue is accustomed to prices in New York State, where $300K buys a near palace (with palatial taxes).

            Things are different here. For reference, the grandma-finally-died house on my block, the one that needed $100K of work, sold for more than $300K. We’re talking a Cold-War rancher, not a McMansion.

          5. Blue is accustomed to prices in New York State

            No Dear Donk, I am accustomed to math. I’ve spent most of my adult life outside of NY and I find that in the various states I’ve lived math is the same. It is only your expectations that are different than math, not your location.

        4. Thirty years ago was a historically advantageous time to buy, shortly before the onset of the greatest real estate bubble in the history of modern finance.

          Now that the Everything Bubble has popped, it may not be such an advantageous investment choice going forward.

          1. Quite true. I would never be able to afford a house in SoCal today, even though my income is 20x what it was back then.

            The Irvine place costs about 0.2% per year in property tax. Our primary home in OC is about 0.5%. My brother in law in Austin, Texas pays closer to 3% on each dollar of supposed value. His problem is that there is no limit to how high the tax can go. This is the problem Californians had in the 1970s.

            Anyway. If the price goes down, it will be a good thing for all those waiting. Which includes my my own kids, even if they don’t know it yet.

    2. Truly some stupid ass people in this country. Education system brought to you by Idiocracy.
      If people could just, I don’t know, maybe do a little critical thinking on WHY asset prices shoot up (or down) at any given time you’d think they’d be smart enough to see the pattern.

      1. Especially someone who in theory took advanced math and physics courses in college to get a CS degree. Classes that are supposed to make one think logically.

        I remember one of the first housing bubble blogs I visited asked everyone what their educational background was. This was sometime around 2005. About half of the people were engineers, mostly EE, ME and CS. Sounds about like this blog too.

      2. I think people used to be better about making critical analysis of these things before buying something like real estate. But there are no repercussions anything anymore. There will just be another government program to kick the van down the road.

        I don’t know where it started. Long Term Capital Management? The New Deal? The 2008 bailouts and ZIRP?

        Regardless, everyone and everything is “too big to fail”, and moral hazard has been transferred elsewhere. So people just hop on the real estate/stock market/cryptocurrency/etc bandwagon.

        It works until it doesn’t. And in the meantime, people with their heads screwed on straight get hosed every day, because they’re making decision based on logic, planning, and prudence.

        The is how the country falls apart. Slowly. Then suddenly.

        1. “Regardless, everyone and everything is “too big to fail”, and moral hazard has been transferred elsewhere.”

          The current state of insurance annuities, pension plans and Wall street could not survive another decade long downturn experienced during the seventies; they would implode.

        2. “I don’t know where it started. Long Term Capital Management? The New Deal? The 2008 bailouts and ZIRP?”

          1907 financial panic, when bailouts fell on J P Morgan, a private bank, to provide?

          This was a factor in establishing the Fed in 1913 as the public bailour authority.

      3. The tragedies of yore like Oedipus, who “couldn’t see” until he was blind, suggest this lack of insight has been with us for centuries. Fortunately in modern times we don’t have to poke our eyes out to see things clearly. An unanticipated lay-off during a prolonged downturn accompanied by your main squeeze riding someone else’s pony helps to sharpen your focus.

  38. Rep. Mary Miller on Chinese Spy Balloon: ‘National Security Must Not Be Compromised by Biden Family Payoffs’

    NICK GILBERTSON
    4 Feb 2023

    Rep. Mary Miller (R-IL) said that China is “exploiting” President Joe Biden’s “weakness” with the spy balloon hovering over America and declared that the United States’s “national security must not be compromised by Biden family payoffs.”

    Miller’s comments came in a tweet Friday morning as the Pentagon says the espionage device is expected to linger in United States airspace for a “few days,” as Breitbart News reported. The Congresswoman also called for the House of Representatives to “investigate why China is confident Biden will not respond to their hostile actions.”

    https://www.breitbart.com/politics/2023/02/04/mary-miller-chinese-spy-ballooon-national-security-must-not-be-compromised-biden-family-payoffs/

        1. According to U.S. officials, the military shot down the balloon as it crossed over the coast of the Carolinas and into the Atlantic Ocean, the New York Times reports. In the hours before the operation, the Federal Aviation Administration had issued a ground stop for airports in Wilmington, North Carolina, and Charleston and Myrtle Beach in South Carolina, citing the need “to support the Defense Department in a national security effort.”

          So, were they afraid that it might be booby trapped? Why didn’t they shoot it down while it was over Montana? It’s not like it would landed on something other than a tree.

          Anyway, the show is over. We now resume our regularly scheduled insanity in progress.

        2. I am reminded of Hearst in San Francisco paying a reporter on a ferry boat to jump overboard to generate some newspaper sales.

        3. ON SATURDAY MORNING, President Joe Biden promised to “take care” of the Chinese spy balloon that spent the past week hovering high above North America, and by the afternoon, he delivered as the U.S. shot the surveillance device down.”

          Thank God he let it foat slowly over most of our Nation before popping it.

          Hilarious Memes Ruthlessly Mock Biden Regime For Allowing CCP Spy Balloon To Float Across US

          Infowars.com
          https://www.infowars.com/posts/hilarious-memes-ruthlessly-mock-biden-regime-for-allowing-ccp-spy-balloon-to-float-across-us/

        4. ON SATURDAY MORNING, President Joe Biden promised to “take care” of the Chinese spy balloon that spent the past week hovering high above North America, and by the afternoon, he delivered as the U.S. shot the surveillance device down.”

          Thank God he let it foat slowly over most of our Nation before popping it.

          Hilarious Memes Ruthlessly Mock Biden Regime For Allowing CCP Spy Balloon To Float Across US

          Infowars.com
          https://www.infowars.com/posts/hilarious-memes-ruthlessly-mock-biden-regime-for-allowing-ccp-spy-balloon-to-float-across-us/

  39. “In San Francisco, prices have seen the greatest drop nationally, down 15% year over year. Oakland was fourth with an 11.6% drop, and San Jose was sixth with a decline of 10.6%.”

    It’s interesting how San Diego doesn’t show up on that list, as I thought Goldman Sachs said our market is among those predicted to fall by the most.

    1. Goldman Sachs Predicts Drastic Downturns In The San Jose, San Diego Housing Markets In 2023
      Downtown San Diego Sunset.
      (Photo: Dancestrokes/Shutterstock)

      SD housing prices have already gone down by $100,000 in the past year

      By Evan Symon, January 28, 2023 7:30 am

      According to a new report by investment bank Goldman Sachs, both the San Diego and San Jose housing markets are likely to see massive declines housing prices this year, with 25% decreases predicted and prices likely to be similar to where they were during the Great Recession in the late 2000’s.

      Housing prices have been going down in several markets across the state. While cities, such as San Francisco have attributed this to population losses in recent years and the market acting accordingly, other housing markets that have been hotter are expected to see a larger loss due to a combination of economic worries, oversaturated markets, and interest rates cooling down buyers.

      In addition to San Diego and San Jose, Goldman Sachs said that Phoenix and Austin are also likely going to see housing prices crash. According to a report last year by CoreLogic, San Diego average home prices had already fallen by about $100,000, meaning that it could become even worse this year.

      “This national decline should be small enough as to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” Goldman Sachs reported this week. “That said, overheated housing markets in the Southwest and Pacific coast, such as San Jose MSA, Austin MSA, Phoenix MSA, and San Diego MSA will likely grapple with peak-to-trough declines of over 25%, presenting localized risk of higher delinquencies for mortgages originated in 2022 or late 2021.”
      …
      https://californiaglobe.com/articles/goldman-sachs-predicts-drastic-downturns-in-the-san-jose-san-diego-housing-markets-in-2023/

        1. “Oakland was fourth with an 11.6% drop, and San Jose was sixth with a decline of 10.6%.”

          I guess that makes San Diego at least third largest, at 11.8% off peak?

  40. ‘There’s no longer this strong pull of workers to the area to get a tech job. You can get a tech job just about anywhere. And a lot those tech San Francisco (companies) are laying off workers, so maybe people don’t feel like it’s really worth it to pay for a home when job security is not as great as it used to be’

    Daryl, yer doing it wrong. You gotta play up the lamp posts. They got lamp posts that won’t fall over from bum urine for maybe a couple of years!

  42. Finance Housing
    CoreLogic updates its home price risk assessment for 392 U.S. housing markets
    The big question heading forward is will the home price correction soon fizzle out or carry on?
    BY Lance Lambert
    February 04, 2023 3:23 PM EST

    Historically speaking, home prices rarely decline on a year-over-year basis. Unless economics forces sellers’ hands, they usually won’t pull back.

    Of course, we’ve recently seen the U.S. housing market slip into one of those rare periods where national home prices are indeed falling—with U.S. home prices down 2.5% between June and November—and just months away from seeing home values negative on a year-over-year basis for the first time since the housing crash bottomed in 2012.

    What’s going on? The mad rush of demand during the Pandemic Housing Boom, which saw U.S. home prices soar 41% between March 2020 and June 2022, coupled with last year’s historic mortgage shock, has “pressurized” housing affordability. Some would-be homebuyers are priced out, while millions of other borrowers—who must meet lenders’ strict debt-to-income ratios—have lost mortgage eligibility entirely. That sharp pullback in housing demand has translated into falling home values.
    …
    https://www.yahoo.com/lifestyle/corelogic-updates-home-price-risk-202323343.html

    1. It may be my imagination, but it seems like there is a lot more red in the current version of their housing decline map than in earlier versions.

    2. “…millions of other borrowers—who must meet lenders’ strict debt-to-income ratios—have lost mortgage eligibility entirely.”

      Since when have lenders applied debt-to-income ratios to screen out unqualified applicants?

    1. Finance & economics | Buttonwood
      The last gasp of the meme-stock era
      So long and thanks for all the fun
      Feb 2nd 2023

      Two years ago the stockmarket was in the grip of speculative mania. Shares in GameStop, a struggling video-game retailer, hit an all-time intraday high of $483 on January 28th 2021, up from around $5 at the beginning of the month. Retail traders co-ordinated in a Reddit forum and snapped up shares using brokerage apps like Robinhood. Empowered by technology, newcomers piled into GameStop, ostensibly because the beleaguered chain was one Wall Street had heavily sold short (ie, bet that the firm’s shares would fall in price). Short-sellers were the villains. When GameStop spiked they lost their shirts. What could be better?

      The question at the time was how much of this would endure. Manias are as old as the hills, but this one seemed different: it was enabled by new technology that wasn’t going anywhere. For a time, the GameStop crew were unstoppable. They pumped up prices for companies that had attracted interest from short-sellers, such as amc, a cinema chain, and Bed, Bath & Beyond, a home-goods retailer. Battle-hardened short-sellers, including Andrew Left of Citron, a research firm, threw in the towel. Melvin Capital, a firm that had shorted GameStop, which the Reddit hordes made the cartoon villain of the saga, decided to close its doors in May 2022.
      …
      https://www.economist.com/finance-and-economics/2023/02/02/the-last-gasp-of-the-meme-stock-era

    1. Wind chill sends Mount Washington temperatures to 108 degrees below zero, setting new record
      setting new record
      February 4, 2023 / 1:49 PM / CBS/AP

      A record-setting wind chill of 108 degrees below zero hit Mount Washington in New Hampshire as arctic air brought dangerously cold temperatures and wind chills to the Northeast.

      The Mount Washington Observatory is set at the peak of the Northeast’s highest mountain. The area is famous for extreme weather conditions.

      On Saturday, wind gusts peaked at around 127 miles per hour. The observatory also recorded an actual temperature of 47 degrees below zero, tying an observatory record set in 1934. Video shared on Twitter shows the intense weather.
      …
      https://www.cbsnews.com/news/mount-washington-arctic-air-descends-into-northeast/

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