Posted on 04/24/2023 6:17:46 AM PDT by Kaiser8408a
In the garden of Biden, not all is well for housing and the mortgage market.
It has been a tough road for the US economy since Covid and Biden’s Reign of Error. For the first time since July 2020 under President Trump, we have finally seen average hourly earnings growth YoY exceed average home price growth YoY.
In REAL terms (after substracting out headline inflation), we see that US housing market is still plagued by 24 straight months of negative wage growth with REAL wage growth still being lower than REAL home price growth.
Then we have Biden’s Marxist mortgage model, making those who who saved and showed care in managing their credit score given money to those who didn’t save and are terrible at financial management. Just like taxpayers trusting DC bureaucrats to carefully spend their money.
Biden’s new theme? “Let’s go crazy!”
(Excerpt) Read more at confoundedinterest.net ...
Um... isn’t that because housing prices are dropping like crazy since we have 7 % mortgage interest rates, due to massive inflation?
“Marxist mortgage model”
What type of entity do you think provided the funding for most of the under 3%, 30-year mortgages?
Trump thought it was a good idea to hand out $1400 on top of the $600 McConnell and Pelosi had agreed to (on top of the $600/week handouts).
“Housing prices are dropping” only in states run by crazy people as far as I have seen. And not “like crazy”.
Here in Florida, prices remain high but sales have slowed to a more regular pace.
“massive inflation”
The food section of Walmart is a rather shocking place now.
My GV cheese balls have gone from $2.54 to $3.18.
Much of the $.98 candy is now $1.48.
Cookies that were $1.27 are now $2.38.
Many Aldi prices have just about doubled from pre-COVID levels.
Reign of Error. Gonna use that.
Reign of Fear (Terror)
- Covid Emergency!
- Climate Emergency!
- Gun Violence Emergency! (not bad-guys just the weapons)
- Equity/Inclusion/Race Emergency!
- but most of all...
- TRUMP! Emergency!!!
Inflation is really close to 30% in many areas of the markets.
My Aldis brand Cheetos are still $1.79 or so. 😊
I am in Florida, I am actively looking for a house.
I am getting a lot of notices that say “Price Reduced”
A LOT
I was Truck shopping online
A 2020 dodge ram was selling for 45,000
A 2021 was selling for 83,000
We are not seeing that other than in specific neighborhoods which were greatly over-priced by speculation in the deep blue state of Washington. Even in Spring is very little supply and somehow there are those who have the money to pay high prices even with higher interest rates. We still have a sellers’ market despite the wishful hype.
Think about it. Most houses with large mortgages were either refinanced or purchased during the time of low interest rates. People do not want to sell those houses and give up their low interest rate financing. This is cutting into the available supply.
IMO, the prices have reduced from the wildly inflated prices made so by the amount of free money that was floating about.
Once mortage rates got near what that had been for years, prices had to come down.
In my neighborhood, in N. Forida, roughly the same size homes with similar amenities have sold over the past 24 months at 600K in 2021, 1 million in mid 2022, and recently 800K. So one might say the prices have reduced 20% recently. Another could say they went up 33% in two years. The trend is definitely downwards due to interest rates IMO.
I am getting a lot of notices that say “Price Reduced”
It is a sales tactic. My wife and I are hoping to move to a different state. Florida is one of the states that we have been looking at. The houses that we have been most interested in there keep selling... especially in the last month or two.
There are actually a couple of reasons why you are getting "price reduced" notices. People do not know what to ask these days and in general if you ask too little it is pretty hard to get away with raising the price. So people are asking more than they actually think they will be able to get as a negotiating strategy. Your “Price Reduced” notices are mostly the same as when you walk on to a used car lot and see the “specials”, or the “sales” at department stores.
People love to think that they are getting a bargain. The prices are set high and then reduced to get people's attention. I remember looking at 4K televisions that had just arrived at the store for a “Black Friday” special. The tag said that it was originally $750 and had been reduced to $350 which seemed very cheap. My wife was very excited. When I looked the TV up on my phone... other retailers had been selling that same model for around $350 for months. All the reviews said it was a cheaply made piece of crap that everyone with sense should avoid.
So do not be fooled by “Price Reduced” notices. They typically don't mean much.
I never saw this many BEFORE last year
I am sure that you are correct. When market conditions change, sales tactics change. Prices are dropping in places where speculation spiked them to levels much higher than what normal market conditions would have taken them to.
The increase in mark downs is partially due to people asking for the moon in a rising market, but they are also meant to make who are being squeezed feel like they are getting some type of "bargain". Where we are at the price of gasoline has gone through the roof. People who used to go to other stations are waiting in long lines to save ten cents a gallon at Costco. They could have saved ten cents a gallon at Costco previously but they didn't bother because they were not actively looking for a bargain.
In many places supply is currently at a very low level and the normal cyclical seasonal demand is on the rise. That means that in many places prices are not currently dropping. Will they drop later in the year? Obviously in some places yes, but Florida is still one of the states that is experiencing a net increase in population. New York, California, Illinois and many other blue states are losing population, so we expect reduced demand to cause prices to drop. And obviously increased house payments caused by increased interest rates also causes downward pressure.
But your valid observation likely does not mean what you think that it does. Prices in most places in Florida are still going up.
"But despite the steep decline in sales, home prices in Florida keep going up, up, up."
“It's part of an ongoing trend that's starting to feel unstoppable. According to Norada Real Estate Investments, Florida home values have risen by an eye-popping 80% over the last five years — and GOBankingRates spoke with several experts who expect the upward trend to continue for at least another half-decade.”
https://money.yahoo.com/housing-crisis-hit-florida-120110145.html
I owned 14 units at one time, and i have been watching real estate all my life, so I see the trends go up and down.
I see them going down now.
Also- people with adjustable rate mortgages are going to cr*p their pants next time it adjusts. People will have mortgage payments doubling.
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