Posted on 02/23/2021 7:32:41 AM PST by SeekAndFind
According to the latest data from S&P CoreLogic Case-Shiller, US home prices in the top 20 cities rose at a stunning 10.10% year-over-year - its fastest acceleration since 2014...
Source: Bloomberg
That is a price rise that is five times The Fed's 'mandated' level of inflation.
Phoenix, San Diego and Seattle posted the biggest gains in prices. Nationally, the Case-Shiller index jumped 10.4% in December, also the biggest surge since 2014.
Historically low mortgage rates have fueled a pandemic housing rally, with scant inventory of homes to buy helping to boost prices.
As in the housing boom of the mid-2000s, home prices are rising faster than personal incomes. Changes in the Home Price Index and the Income Index from 1991 to 2020:
Will The Fed never learn? This pump-a-thon didn't end well before... and with exponentially more debt and leverage now, it will end in even more wealth transfer and socialism for the rich...and this time, the paeons pitchforks are already sharpened.
We also note that the moratoriums on evictions and foreclosures are also distorting the market. There's no question these policies are needed to keep people from being displaced in the midst of a pandemic, but they will eventually have to be lifted and it is not clear what will happen when they do.
“I am not yet willing to think about selling my primary house, but I am considering selling a few rentals this year that I originally planned to keep for several years.”
SMART!!! As I see it, the risk to landlords is huge...as they have always been a HUGE TARGET of the left (in lots of ways). I’d be out of that business tomorrow, if I were in it!
I’m in Texas and they’re blowing up trains now (just today) to try to start the ball rolling on shutting down our energy business, and with that, the state economy dies. Just getting out of my house will remove that downside risk from my situation...not to mention making it far easier to leave this country.
Coral snakes :)
The key with rentals is 1) state/local laws, which are landlord favorable here and 2) screen your tenants well. I always slightly underprice my rent vs market so I have significantly overqualified applicants. I’ve been renting for 10 years over 8 properties or so and never had any issues with any of my tenants.
“The key with rentals is 1) state/local laws, which are landlord favorable here and 2) screen your tenants well. I always slightly underprice my rent vs market so I have significantly overqualified applicants. I’ve been renting for 10 years over 8 properties or so and never had any issues with any of my tenants.”
Good to hear, but if rent control, for example, gets imposed (maybe nationally), things may get much worse for landlords. Whether we like it or not, we’re always at the mercy of government, with the feds always being top-dog. That’s why you’re at risk, no fault of your own.
And lack of dirt! Lack of desirable areas where weather won't kill or attack you. Most all of these desirable regions are all but built out...Little or no prime land left.
Low interest rates enable more people to buy a home. That results in faster sale of those offered, lower inventory and bidding wars causing prices to escalate.
The question is, how long will it last, what with the economic destruction sure to come over the next couple of years.
I guess that’s true. It just seems like I barely can buy anything anymore for under 4 dollars. And worse the boxes and bottles are smaller. I can’t believe companies are allowed to do that. It’s a travesty!
How does that work? More immigrants prevent us natives from having larger families?
A Chinese pullback could have serious effects for some West Coast housing markets
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They aren’t going to pull back, so relax. There is little left for them to invest in China - they’ve built all the Potemkin Villages they can. Making money is the number one obsession of all the mainland Chinese people - how its done does not matter.
You can even go to cities and find rental cars places the have brothels. If food quality can be cut to make a profit, they do. If a building looks good with paper mache and styrofoam filled structural columns painted to look like concrete, they do. If a new apartment building has lots of amenities, don’t worry, in 3 years or less they will be gone. If companies that sell the bottled water you have to drink (because the tap water is horribly polluted), can be refilled free at the nearest landfill, polluted river, or waste plant, they do.
All of that is covered and to make more money they must invest overseas. So relax. Be happy. Learn Chinese.
Rent controls nationally would be illegal and unlikely at any rate outside large urban cores, where I don’t have any rentals currently and never would - their cap rates are too low for my tastes. You aren’t wrong there are risks but ALL investments and stores of value have risks and rentals in MOST states are no worse than most other investments. But at any rate, I’ll be happy to take recent market gains as soon as my current leases are up mid year.
Everything now has a license to go up in price and it is from lumber to milk. I have seen 25% increases in prices for parts of all kinds, screws, hardware, paints and other coatings etc.
If the price of one part of the supply chain goes up 10% for a vendor he raises the price of everything 10% or more to “cover” costs.
Price gouging plain and simple.
“Rent controls nationally would be illegal...”
Good one! The only things ‘illegal’ now are what our newly-installed government decides to not allow us to do. Otherwise, my wife wouldn’t be packing our house right now.
As to your situation, yep, you’re still doing the right thing to get out of rentals, and who knows, maybe a miracle will come bring some degree of the rule of law back - but after something else we all thought was illegal (violating the Constitution to rig an election) was ruled to be PERFECTLY FINE yesterday, by what we thought was a conservative Supreme Court, I wouldn’t hang my hat on anything being off limits.
I do know how to code you bow tie wearing freak.
I got out of it because I needed to pay my bills.
You want manufacturing in the US? Then you and every customer will pay for it.
CVA I like a lot of what you say, but you are blisteringly ignorant on the cost of running a business. Put tariffs in, put and end to immigration, then you will see a high cost of inflation passed on to consumers. Will it be better in the long run? I think so. But it WILL hurt and hurt pretty bad at first. Our standard of living will drop short term as most of the cheap crap can not be made here at a price point you will pay.
That is including most consumer electronics.
Eggs have been between $.99 and $1.99 for a dozen for over 20 years. I’ve been buying ground beef and chicken breasts for $2.99/lb (90% of time) for 10 years. Bacon prices on sale are usually 3/ $10 and have been for as long as I can remember. Pasta I have been able to get for less than $1 per box for as long as I can remember. Yes, some things have gone up like crackers, chips, cereals, and sodas, but even then only about 3% a year on average - although some years they don’t go up and other years its 5-6%. I worked at HQ for a supermarket company for 13 years and our price increase average estimates were always very close to the BLS’s #s.
Did the Marines on Okinawa hurt for their country? Our sacrifice is small compared to that.
Your IRA and 401k are just as like to be confiscated for the greater good as rental controls nationally. And even if they did add rent controls, I’d still be making huge amounts of money. I actually prefer to leave my tenants in there without them moving out and rarely raise rents on good tenants. Many renters don’t realize vacancy massively cuts into your rental income - and there are always massive turnover costs. 4 weeks of annual vacancy is like reducing your rent by 8%, 8 weeks by nearly 16%. Add in 5-10% turnover costs (repairs, sometimes paying a commission for renters agent, time, etc) and I think this issue has been overplayed a bit. I certainly don’t support them, but outside a few cities, rents rarely go up more than 2-4% a year, in line with most rent controls anyway.
Again, I agree.
But going back to my current problem.
I could offer $100/hr (I have offered a guy $40!) but when they prefer a life of no work and the .gov gives them the means to free load, they will free load.
A friend of mine can’t find a manager position ($80K a year in IOWA!) because all the Americans want to live on the coasts and complain about the high cost of living.
So while the Marines and Army in WWII sacrificed a lot, most on the US will not sacrifice a latte. The whole “Wooden shoes ascending/ Silk Slippers descending” thing
Um. Calling BS.
That’s even better. Someone needs to send a press release to all our large Florida newspapers.
“Your IRA and 401k are just as like to be confiscated for the greater good as rental controls nationally.”
You better believe it! Once the currency collapses, then they’ll do just that, because that’s where all of the wealth is. First it will be currency controls, as everyone will try to get their 401k’s to other currencies, then they’ll seize the 401k’s and replace them with a small annuity, in a quickly deteriorating currency (US dollars). That’s a big part of why I’m leaving here, to also stay ahead of having my money seized. Once my money is out, I’m looking at buying property overseas, with much of it.
“And even if they did add rent controls, I’d still be making huge amounts of money.”
No one can predict that...if inflation soars and you’re prohibited from increasing rent, at least somewhat, it won’t end well!
“I actually prefer to leave my tenants in there without them moving out and rarely raise rents on good tenants. Many renters don’t realize vacancy massively cuts into your rental income - and there are always massive turnover costs.”
Absolutely - makes perfect sense to me!
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