Price memory on such a high value asset is also a factor here. People don't want to lose hundreds of thousands on real estate, so they refuse to lower their selling prices. They feel entitled to their inflated housing values.
I can't really blame them. The prospect of taking a six figure hit followed by doubling or tripling the interest rate on a new place will remove any motivation to sell from anyone who doesn't have to leave the area.
That isn't just taking it in the ass. That's being bent over and spitroasted.
That's true, but even if you manage to say sell your middle class home for $700k, you're going to lose about 10% of that, and if you're a first time seller I think there's still that 4% Obama tax.
And then you basically can't purchase a similar home again.
He's not an idiot. He knows exactly what the consequences of his actions are. He lowered interest rates at a time that they normally wouldn't purely to help the Biden administration, and now they're doing the opposite to Trump because they want to hurt his administration.
Chris Martenson at Peak Prosperity likes to call Powell and Yellen "monetary vandals."
Honestly i think it’s far more nefarious than this. The fact is this is just a precursor of the massive housing surplus that will happen when boomers start passing away. Those 1 million dollar (overvalued) homes won’t sell and this will be used used as an excuse to mass immigrate again and those immigrants will receive low interest loans from the government to buy houses and “save” the market. Create the crisis and sell the solution.
The last time we gave browns mortgages to buy houses resulted in the Global Financial Crisis of 2008. Those toxic loans are still on the Fed's books, despite then-Chairman Ben Bernanke promising it's a "temporary" emergency measure and it would be sold on the open market "eventually".
don't knock the guy, he has no good option. they're stuck. they cant inflate further because it fucks with the social contract too much, and they can't inflate less because they need to pay the handouts (to both lower and upper strata), or they get a revolution.
the actual resource cost of bribing useless parasites into not blowing up moden society exceeds what said society can produce to such an extent that even borrowing against its kids' future isnt enough.
The Fed could start by ceasing their bailout programs of banks, MMFs, and even non-financial corporate entities. Currently we have a moral hazard where certain people can gamble with the economy and keep their jobs regardless of what happens, all in the name of "stability."
The gambling with other people’s money needs to stop. Honestly, with some of the moves these financial institutions make, I’d rather them play in a rigged mob casino because at least there would be a chance of winning something.
That's some of it, definitely. But another part is that people who could sell, have chosen to rent, or Air BNB. The Rental and Air BNB bubble will basically destroy property prices in cities when it pops.
I bought my home just a few years back, which means it came with a bunch of fancy apps to track values and equity and all that.
And on every single one of them, there is a "If you Air BNB this many days of the month at this value, you can pay off your house by X!!" calculator attached. And its fucking juicy looking, like 7 years instead of 30 if you only do 12/30 days a month.
That's the kind of temptation that will get a lot of people, even those who aren't big rich investors looking into that market.
All those numbers depend on line go up forever and nothing bad happening to the market or economy or even AirBnB's terms of service (which everyone is leaving for hotels due to cleaning fees).
If you can pay for a house in cash and want to dabble in real estate, that's one thing. Mortgaging a house to rent is no different from buying stock on margin.
That's new, but that cost comes with the dangers (and laws) of renting and advertising. Investment properties are investments. You can lose your principle if you're not careful. Considering how many people are doing it, I'd suggest that we have a bubble because of it.
What has to happen is 25+ years of credit based inflation needs to be cleared, which was not allowed to happen after the 2000 tech boom bust and the 2008 mortgage fraud bust. All that bad credit was papered over by even more credit, at lower rates.
It is going to hurt, A LOT, because the losses of 2000 and 2008 were never allowed to happen. House prices need to fall 50% or more, and home owners are going to have to eat those losses, and we all know who is going to eat most of that: boomers.
This is entirely fitting, because those fucking leeches deserve it.
Investment companies have a lot invested. They don't need to liquidize but they need to show to growth to investors. It is in their interest to keep prices up even if they don't sell. If enough people were to take their money out it would collapse, but that ain't going to happen.
Galean is right. To illustrate think of the inverse that happened with gamestop. As long as Nobody was selling prices went up, in that case it was a Bad Thing so the aristocrats did some dummy sales to inflate supply, lowering the price.
In this case it's the opposite, prices only go up if the only things that sell are going for a higher rate. You're confused because you're a functional human being and not a finance guru, to you a market with low turnover is bad, but to the bookies who place the bets all that matters is the sticker.
I have said for over 20 years that when the boomers start dying off, there will be an abundance of housing. Don't think the bankers didn't notice, that's why they push for mass migration. They make their money on interest (usuary) and they would rather have 2% of $1,000,000 than 3% of $500,000. It's greed that is driving all the policies that you see
“ Redfin expects home prices to drop 1% by the end of the year as a result. Prospective buyers may see their purchasing power increase, and prospective sellers should consider selling sooner rather than late”
Lmfao 😂 fucking boomers and their price memory . Try 50% and get back to me.
I’d like to be able to buy a house someday in my home nation, but it appears the only people who can buy houses in the U.S. anymore are j’w bankers, j’ws, a bunch of foreigners and muhnorities who get all sorts of help from my tax dollars to each get a nice house of their own without paying anywhere near what Whitey has to pay. Seems like this data would suggest housing prices have to collapse soon if there are that many houses for sale and so few buyers, but maybe they’re holding onto them for the next influx of illegals during the White genocide process, so it doesn’t really help me much.
It not impossible, I'm white trash with an okay job and me and my wife were able to buy one even at the absurd current rates just a few years ago. We even skipped the "first time home buyer" trap by actually showing up with a pittance of a down payment. And its in a "high cost of living" state, though not a major urban city.
Its bleak all around for sure, but reality is often less awful than the numbers make it look once you go out and put in the leg work.
You would still end up as one of the biggest losers if the prices and/or rates do crater though, would you not? Who knows how long it would take for the value to climb back to what you paid for it.
Not that I'm blaming you, we all need a place to live and raise a family, and I'll probably be in the same boat in a year or two.
Who knows how long it would take for the value to climb back to what you paid for it.
I'm living in it, happy in it, and it fulfills all the needs my family has in terms of space. That value is peaked without much sign of changing. I can afford it, and we have enough afterwards to not be struggling.
Obsessing over the monetary "value" of it is how our entire country ended up in this state. Sure X years from now I might end up having paid more than I had if I bought it then, but that's also X years my family would have been living cramped and less happy elsewhere.
When the rates crater I'll refinance and save a solid chunk then, which I'm already in the pipe to do, and since I don't plan to sell the value otherwise is only relevant to the taxes/insurance I pay on it, of which the value dropping benefits me. I'm sure its more complex than that and guys deeply knowledgable about all this will yell about my idiocy, but living in paranoid fear of "what if I get screwed later" keeps you from too much in life.
I'd assume this is Boomers needing to tap into the equity of their real estate than them dying off, whether it's to retire in a low cost-of-living state or inflation nuking their retirement. We still have Silent Gen liches like Nancy Pelosi still clinging to life.
About 25 years ago I had read a financial report that said that 1/2 of boomers owned more than one house. At that time, boomers were 1/3rd the population. So, yeah, I'd say that has a big part of it
I have an empty boomer-owned house next to me. The woman who owns it thinks it's an investment. Taxes here aren't low, it costs ~6K a year in taxes at the least, it's been empty 10+ years. I don't think the owner comprehends that after such a long time unoccupied, the house is worth much less; these people think that a house is always worth more, no matter what.
Meanwhile, if she would have sold and put that cash into a index fund, it would be worth more now, even with the capital-gains tax factored-in. Even if the money sat in a savings account, adding in 6K per year instead of paying tax, would be a win.
Yeah, I'm a boomer and I've met a lot of moron boomers. I've met quite a few smart and honorable boomers as well. Every generation has the same issues.
Unfortunately, the carrying cost of real estate is so much now, unless there some productive use to offset the annual taxes, it's not a good way to hold wealth.
I would also like to add, that when the oldest boomers hit 70-1/2 years old, they were required to start taking minimum distribution from retirement accounts and we saw the stock market fall hard. Financial institutions knew this was coming and sold ahead of time and the boomers started selling into a falling market to compound the problem. It was definitely a setup to catch lazy, ignorant boomers and make them pay for their lack of understanding
I think the jobs report tomorrow will be bad, the recession will be confirmed, congress will react with big spending bill, we will experience inflation DURING high unemployment (stagflation) which is going to hurt. The market will crash. Gold prices will continue to go up as a hedge against the inflation and big stimulus bills. Housing prices will fall because. Insurance taxes high rates. The material prices haven fallen but the housing prices remain inflated. Big cheap oversized pine boxes with gypsum and vinyl siding are not fancy. They blame global warming but wont tell you the truth that hurricanes rip through these shit box houses because they are all built out of toothpick soft pine wood that rots easy, is not hard wood, is soft, warps, gets eaten easy by bugs, doesn't stand up to water or humidity, isn't structurally as rigid and sound.
Also the BRICS thing is way underestimated. They are putting in place the infrastructure to take over as the world's reserve currency. USA is fucking up. The 50% tariff on india had them running to Russia and China to join forces and then Vietnam is now with BRICS and they are stockpiling the gold and building vaults and banks in these nations to hold the gold. Meanwhile the fiat USA dollar is tanking and USA is going with bullshit digital fake coins that only exist in theory and with trust that an algorithm isn't being hacked or manipulated.
I can offer my own insight on the matter from the UK perspective, and the story is extremely similar here. My own little town has dozens of houses for sale which have been on the market for six months or more. Nobody is foolish enough to buy when the interest rates are so high and keep climbing.
And in Bulgaria we have historically low interest rates and an overvalued real estate market. We are joining the euro zone next year. I expect interest rates to rise. And since almost all mortgages have variable rates, we may get a crash.
The house market needs to crash and make these boomers sell their multiple properties to young families that need them to live. The biomers are hoarding houses like criminals horaded food during a siege.
Price memory on such a high value asset is also a factor here. People don't want to lose hundreds of thousands on real estate, so they refuse to lower their selling prices. They feel entitled to their inflated housing values.
I can't really blame them. The prospect of taking a six figure hit followed by doubling or tripling the interest rate on a new place will remove any motivation to sell from anyone who doesn't have to leave the area.
That isn't just taking it in the ass. That's being bent over and spitroasted.
That's true, but even if you manage to say sell your middle class home for $700k, you're going to lose about 10% of that, and if you're a first time seller I think there's still that 4% Obama tax.
And then you basically can't purchase a similar home again.
Curious if there is going to be a massive value decrease as they try to dump properties to prevent paying property taxes.
Good summary of why the housing market is frozen - (almost every seller is paying a low interest rate and every buyer will be paying a massive one)
https://youtu.be/T8J-IjF8IsM
J Powell is a fucking idiot. That is all.
He's not an idiot. He knows exactly what the consequences of his actions are. He lowered interest rates at a time that they normally wouldn't purely to help the Biden administration, and now they're doing the opposite to Trump because they want to hurt his administration.
Chris Martenson at Peak Prosperity likes to call Powell and Yellen "monetary vandals."
I think it's an apt description.
Honestly i think it’s far more nefarious than this. The fact is this is just a precursor of the massive housing surplus that will happen when boomers start passing away. Those 1 million dollar (overvalued) homes won’t sell and this will be used used as an excuse to mass immigrate again and those immigrants will receive low interest loans from the government to buy houses and “save” the market. Create the crisis and sell the solution.
The last time we gave browns mortgages to buy houses resulted in the Global Financial Crisis of 2008. Those toxic loans are still on the Fed's books, despite then-Chairman Ben Bernanke promising it's a "temporary" emergency measure and it would be sold on the open market "eventually".
don't knock the guy, he has no good option. they're stuck. they cant inflate further because it fucks with the social contract too much, and they can't inflate less because they need to pay the handouts (to both lower and upper strata), or they get a revolution.
the actual resource cost of bribing useless parasites into not blowing up moden society exceeds what said society can produce to such an extent that even borrowing against its kids' future isnt enough.
there is no way to make this work.
The Fed could start by ceasing their bailout programs of banks, MMFs, and even non-financial corporate entities. Currently we have a moral hazard where certain people can gamble with the economy and keep their jobs regardless of what happens, all in the name of "stability."
The gambling with other people’s money needs to stop. Honestly, with some of the moves these financial institutions make, I’d rather them play in a rigged mob casino because at least there would be a chance of winning something.
that goes into my "upper strata handout" bin.
they can't stop funding parasites or they will get overthrown.
I don't know man, bullets are relatively cheap, especially when you buy at the scale the federal government would need to buy to put down the leeches.
There's a way to make it work. It's just not very nice, and involves a mountain of corpses.
That's some of it, definitely. But another part is that people who could sell, have chosen to rent, or Air BNB. The Rental and Air BNB bubble will basically destroy property prices in cities when it pops.
I bought my home just a few years back, which means it came with a bunch of fancy apps to track values and equity and all that.
And on every single one of them, there is a "If you Air BNB this many days of the month at this value, you can pay off your house by X!!" calculator attached. And its fucking juicy looking, like 7 years instead of 30 if you only do 12/30 days a month.
That's the kind of temptation that will get a lot of people, even those who aren't big rich investors looking into that market.
All those numbers depend on line go up forever and nothing bad happening to the market or economy or even AirBnB's terms of service (which everyone is leaving for hotels due to cleaning fees).
If you can pay for a house in cash and want to dabble in real estate, that's one thing. Mortgaging a house to rent is no different from buying stock on margin.
That's new, but that cost comes with the dangers (and laws) of renting and advertising. Investment properties are investments. You can lose your principle if you're not careful. Considering how many people are doing it, I'd suggest that we have a bubble because of it.
Yes let's blame the fed and not endless war and debt and money printer whirring
Derp
The fed runs the money printer and works with the war hawks.
$1t in new debt every 100 days and its the fed that's the problem...sure bud
They're literally partners in crime
What has to happen is 25+ years of credit based inflation needs to be cleared, which was not allowed to happen after the 2000 tech boom bust and the 2008 mortgage fraud bust. All that bad credit was papered over by even more credit, at lower rates.
It is going to hurt, A LOT, because the losses of 2000 and 2008 were never allowed to happen. House prices need to fall 50% or more, and home owners are going to have to eat those losses, and we all know who is going to eat most of that: boomers.
This is entirely fitting, because those fucking leeches deserve it.
Nah, they'll just die due to spite rather than take a loss, and an to burn down all their properties in their will as one final act of fuckery.
Why isn't this affecting prices? Because investment companies that speculate on houses have no selling pressure.
Investment companies have a lot invested. They don't need to liquidize but they need to show to growth to investors. It is in their interest to keep prices up even if they don't sell. If enough people were to take their money out it would collapse, but that ain't going to happen.
I think "investors" is Blackrock which means they have no issue since they're jacking up rent prices and everything else.
Galean is right. To illustrate think of the inverse that happened with gamestop. As long as Nobody was selling prices went up, in that case it was a Bad Thing so the aristocrats did some dummy sales to inflate supply, lowering the price.
In this case it's the opposite, prices only go up if the only things that sell are going for a higher rate. You're confused because you're a functional human being and not a finance guru, to you a market with low turnover is bad, but to the bookies who place the bets all that matters is the sticker.
Doesn’t matter. BlackRock, Vanguard, and State Street will simply buy it all and rent it out.
I have said for over 20 years that when the boomers start dying off, there will be an abundance of housing. Don't think the bankers didn't notice, that's why they push for mass migration. They make their money on interest (usuary) and they would rather have 2% of $1,000,000 than 3% of $500,000. It's greed that is driving all the policies that you see
“ Redfin expects home prices to drop 1% by the end of the year as a result. Prospective buyers may see their purchasing power increase, and prospective sellers should consider selling sooner rather than late”
Lmfao 😂 fucking boomers and their price memory . Try 50% and get back to me.
I’d like to be able to buy a house someday in my home nation, but it appears the only people who can buy houses in the U.S. anymore are j’w bankers, j’ws, a bunch of foreigners and muhnorities who get all sorts of help from my tax dollars to each get a nice house of their own without paying anywhere near what Whitey has to pay. Seems like this data would suggest housing prices have to collapse soon if there are that many houses for sale and so few buyers, but maybe they’re holding onto them for the next influx of illegals during the White genocide process, so it doesn’t really help me much.
It not impossible, I'm white trash with an okay job and me and my wife were able to buy one even at the absurd current rates just a few years ago. We even skipped the "first time home buyer" trap by actually showing up with a pittance of a down payment. And its in a "high cost of living" state, though not a major urban city.
Its bleak all around for sure, but reality is often less awful than the numbers make it look once you go out and put in the leg work.
You would still end up as one of the biggest losers if the prices and/or rates do crater though, would you not? Who knows how long it would take for the value to climb back to what you paid for it.
Not that I'm blaming you, we all need a place to live and raise a family, and I'll probably be in the same boat in a year or two.
I'm living in it, happy in it, and it fulfills all the needs my family has in terms of space. That value is peaked without much sign of changing. I can afford it, and we have enough afterwards to not be struggling.
Obsessing over the monetary "value" of it is how our entire country ended up in this state. Sure X years from now I might end up having paid more than I had if I bought it then, but that's also X years my family would have been living cramped and less happy elsewhere.
When the rates crater I'll refinance and save a solid chunk then, which I'm already in the pipe to do, and since I don't plan to sell the value otherwise is only relevant to the taxes/insurance I pay on it, of which the value dropping benefits me. I'm sure its more complex than that and guys deeply knowledgable about all this will yell about my idiocy, but living in paranoid fear of "what if I get screwed later" keeps you from too much in life.
I wonder how much of this is being fueled by boomers starting to die off.
I'd assume this is Boomers needing to tap into the equity of their real estate than them dying off, whether it's to retire in a low cost-of-living state or inflation nuking their retirement. We still have Silent Gen liches like Nancy Pelosi still clinging to life.
About 25 years ago I had read a financial report that said that 1/2 of boomers owned more than one house. At that time, boomers were 1/3rd the population. So, yeah, I'd say that has a big part of it
I have an empty boomer-owned house next to me. The woman who owns it thinks it's an investment. Taxes here aren't low, it costs ~6K a year in taxes at the least, it's been empty 10+ years. I don't think the owner comprehends that after such a long time unoccupied, the house is worth much less; these people think that a house is always worth more, no matter what.
Meanwhile, if she would have sold and put that cash into a index fund, it would be worth more now, even with the capital-gains tax factored-in. Even if the money sat in a savings account, adding in 6K per year instead of paying tax, would be a win.
Yeah, I'm a boomer and I've met a lot of moron boomers. I've met quite a few smart and honorable boomers as well. Every generation has the same issues.
Unfortunately, the carrying cost of real estate is so much now, unless there some productive use to offset the annual taxes, it's not a good way to hold wealth.
I would also like to add, that when the oldest boomers hit 70-1/2 years old, they were required to start taking minimum distribution from retirement accounts and we saw the stock market fall hard. Financial institutions knew this was coming and sold ahead of time and the boomers started selling into a falling market to compound the problem. It was definitely a setup to catch lazy, ignorant boomers and make them pay for their lack of understanding
I heard that statistic mentioned yesterday.
What do you think is going to happen?
I think the jobs report tomorrow will be bad, the recession will be confirmed, congress will react with big spending bill, we will experience inflation DURING high unemployment (stagflation) which is going to hurt. The market will crash. Gold prices will continue to go up as a hedge against the inflation and big stimulus bills. Housing prices will fall because. Insurance taxes high rates. The material prices haven fallen but the housing prices remain inflated. Big cheap oversized pine boxes with gypsum and vinyl siding are not fancy. They blame global warming but wont tell you the truth that hurricanes rip through these shit box houses because they are all built out of toothpick soft pine wood that rots easy, is not hard wood, is soft, warps, gets eaten easy by bugs, doesn't stand up to water or humidity, isn't structurally as rigid and sound.
Also the BRICS thing is way underestimated. They are putting in place the infrastructure to take over as the world's reserve currency. USA is fucking up. The 50% tariff on india had them running to Russia and China to join forces and then Vietnam is now with BRICS and they are stockpiling the gold and building vaults and banks in these nations to hold the gold. Meanwhile the fiat USA dollar is tanking and USA is going with bullshit digital fake coins that only exist in theory and with trust that an algorithm isn't being hacked or manipulated.
Just to confirm: "the" means USA?
The secondary title says:
So yes, I believe that there's a fair chance that it doesn't apply to Europe or Canada, and is actually about the United States.
I can offer my own insight on the matter from the UK perspective, and the story is extremely similar here. My own little town has dozens of houses for sale which have been on the market for six months or more. Nobody is foolish enough to buy when the interest rates are so high and keep climbing.
Worry not cuckadians north of the USA : the federal government is handing money to non-Whites to buy houses. For ''equity''.
And in Bulgaria we have historically low interest rates and an overvalued real estate market. We are joining the euro zone next year. I expect interest rates to rise. And since almost all mortgages have variable rates, we may get a crash.
I'm just a blind retard apparently thanks for pointing it out
Most informative follow-up would be a volume per buyer/seller chart covering the same span
The house market needs to crash and make these boomers sell their multiple properties to young families that need them to live. The biomers are hoarding houses like criminals horaded food during a siege.
that blackrock peak