As inflation bites the working-class hard, U.S. household savings rates continue dropping fast. When combined with drops in home values the loss in home equity compounds the issue. American families are getting poorer much more quickly under Joe Biden’s economic policies.
According to the Wall Street Journal home values dropped in August at their highest monthly rate of decrease since 2011 {link}. In part this is driven by higher mortgage rates which are pricing home buyers out of the market. However, the regional impact is worse on the west coast than east or southeast.
[…] The housing market has slowed abruptly this year due to a rapid increase in mortgage rates, which has raised borrowing costs for home buyers and pushed many prospective buyers out of the market. Existing-home sales fell for eight straight months through September. (link)
As noted in The Daily Mail review of a similar analysis: “It’s Northern California that leads the way, with San Jose experiencing a drop of 10.8 percent since September, followed by San Francisco at 8.5 percent, then it’s Seattle at 8.2 percent, Denver at 5.8 percent, San Diego 5.2 percent, Portland 5.1 percent, Las Vegas 4.8 percent and Phoenix at 4.4 percent.” (link)
What we are seeing is a confluence of events, generally brought about by the outcomes of larger Biden administration policy. Massive increases in energy costs are the result of energy policy; those increases are fueling inflation from the supply side on food, fuel, electricity, home heating etc. Simultaneously, Fed monetary policy is driving consumer demand down. The recession debate continues amid the economic think-tanks while Main Street outcomes show we have been in a recessionary period all year.
The majority of consumers have stopped purchasing nonessential goods and services. As a result, the only thing holding the economy together is employment. Sooner or later, as the natural lags in the economy bite down, the lack of consumer spending (noted in increased inventories) is going to result in lay-offs and unemployment. It’s almost a guarantee at this point once the boxcar impact of the prior supply chain shortages straightens out.
The third wave of food price increases is now here, and we are all likely starting to see those price increases in retail food stores. Depending on how much higher energy prices go this winter (gasoline, natural gas, home heating oil etc.) the middle class will again be making tough checkbook decisions on spending.
On a MACRO level (nationwide averages) I would not be surprised to see home prices drop to where they were in the beginning of the second quarter of 2021. Home sales have dropped quickly, and home inventories are now climbing. Home buyers are now in the position to negotiate for much lower prices as fewer home buyers are in the market.
If you did not purchase a home in the past year, you likely have stable equity. Depending on region, those who did purchase a home this year will have to wait quite a while before the price level returns. Meanwhile rents continue increasing as middle-class workers are stuck between diminishing real wages (Biden inflation) and higher home borrowing costs (Biden monetary policy).
Rents soar. Evictions loom.
See the numbers in this #ChalkTalk and then take action Nov 8 to begin the renewal process for American prosperity. pic.twitter.com/9eombuAMPs
— Steve Cortes (@CortesSteve) October 25, 2022
Biden* says our economy is “strong as hell”…
Said another way our economy is equal to hell.
Or going there.
Bidenvilles for EVERYBODY!!
Bidinh’s not speaking to middle class homeowners. He’s speaking to renters. But because the DC elites pulling Bidinh’s strings have NO IDEA how high rents have risen … they’re clueless about the RED tsunami coming their way. Buh bye Democrat majorities. Buh bye Kamelala RamaLamaDingDong tiebreaker
It doesn’t matter who he’s speaking to. Their ultimate goal (as proxy activists and worshipful proponents of the WEF) is to rid themselves of the middle class, no matter how they have to do it. This is just the start.
I’m hopeful for that “Red tsunami)…but 2020 changed everything. I’m in the ” don’t count your chickens before they’re hatched” camp.
The red tsunami isn’t going to stop a lame duck CONgress from passing as much of the WEF/Davos wishlist as humanly possible in the 60 days following the election.
ChiCom Mitch always has 10 republican’t votes to sell for everything from amnesty to more gluttonous spending & Empress Piglosi won’t need any republican’ts but she’ll damnSkippy have at least 2 fists full.
One hand washes the other….absolutely. It was ever thus but not as blatantly in our faces as now. Such is their hubris and their contempt for the people who put them there.
I thought the Fed would change course and stop with the rate hikes prior to the election. I figured the Dems would pressure them so they could get a stock market boost and claim the economy was strong. But it’s clear now that they don’t care about the optics and are moving full speed ahead to crush the middle class.
They’ve caused all this…too low for too long. My opinion only is that they won’t back down now. Pause maybe.
I suspect the Dems are upset the Fed hasn’t helped them out (even if that is possible, which I do not believe it is). And the stock market certainly seems to think those rates have peaked.
There are plenty Fed whisperers and “experts” who think they can predict what they’ll do next. I suspect it’s all bravado…or wishful thinking.
Wishful delusions for 300. Possibly just mocking bird agents or narrative tellers.
So many choices, so many possibilities.
See, they are not worried about Nov 8 or hiding it really well.
The former…..
I know, Betsy. 2020 was clearly a stolen and fraudulent election and I see nothing indicating our stupid party Republicans have done a single thing to prevent it from happening again. All you have to do is look at the quisling McConnell and how he is sandbagging MAGA senate candidates to see what the uniparty is really working towards.
It’s the manipulation and late vote “counting” and the delays in announcements of the winners that make me withhold unbridled enthusiasm.
I remember when we all knew on the night who won and loss. I’m afraid we will never see honest elections again. And that makes the USSA just another banana republic.
I should also add that I fervently hope I am really really wrong, spren, but that is my gut feeling.
My gut feeling sentiment too!!
LOL!!
Since when did Hell have a strong economy?
I’ve heard it said theirs is quite hot.
Spoken like a man who knows where of he speaks.
Home values are dropping, property taxes wont.
Prices are still rising here in my rural, conservative area.
It is next to impossible to find anything to buy.
The new home building has slowed at lot for some reason but we seem to have so many who want to move here.
I’m just outside of Ocala FL. The re market is smoking hot.
same thing here in North Texas. Plenty of homes being constructed from people moving here from California. I’m hearing that it’s slowing because people can’t sell their homes in order to move…..
Not even counting interest rates at around 7%?
The home may be a good buy. Adding this interest rate over a 30 yr span?
This is why home prices are dropping, as interest rates keep rising.
Interest rates, inflation eating one’s purchasing power, and we cannot forget that part of what ran prices up was Blackrock and friends buying up real-property to hedge their bets going into the Biden Depression, so I suspect part of the drop now is those buyers stepping back, for now.
Those same Vulture Class buyers will be happily picking up distressed properties when they crash things so hard people are forced to abandon the massively overinflated mortgages they assumed to obtain homes during the past couple years.
I second your post!
Told my financial advisor to dump anything associated with Blackrock. I’m Blackrock free …
Feh. We bought our first house with an 18% fixed rate mortgage. We still have a ways to go to match Jimmy Carter’s disaster. But it’s coming.
Jimmy Carter the peanut man had four years in office and he effectively destroyed the economy when he was president. This resident vegetable in the White House in two years has done more damage than anybody I have ever known and he has two more years to finish destroying this country.
From peanut farmer to peanut brain.
From a putative Christian to a proven pervert.
Maybe his last booster today might improve the situation.
Saline doesn’t any harm, so there will be no improvement unless Carlos Hathcock USMC gets to work.
Carlos Hathcock. OMG.
I resemble that remark. 😎
Probably a Saline solution🤔, otherwise the optics would be very bad.🤔🤔
Democrats & joe
Yah. My first mortgage in the early 80s was 13%
Ah, yes, the misery index.
If I remember correctly, Carter’s misery index was over 20%.
Inflation + Unemployment = Misery index
June 1980, 21.98%
yep, China investors who have become wealthy due to being exempted from the climate change hoax and operators of manufacturing operations abroad buying homes cash and immediately putting them up for high rent. Recently sold a house in So Cal for 100k less then original asking price to one of them.
In the 12 months ending March 2022, Chinese investors spent $6.1 billion buying U.S. properties, an increase of 27% from a year ago. 6 in 10 of these were cash purchases.
Total U.S. residential units purchased by foreign investors was $59 billion (3/21-3/22), up 8.5% from the preceding 12 months.
About 40% of the countries in the world have some restrictions on foreign ownership of land/properties.
Open border on real estate. I noticed at least roughly 90% of Chinese in SoCal, and there are a lot, wear masks everywhere. Just what Xi ordered. They are also pushing the electric vehicle psychosis.
Here in CO a friend has 2 duplexes and a single family home (but large enough lot to tear down the old home and put up two 4-plexes), and all lots are adjacent to one another. All structures could be torn down, apartment complex put up. Been listed for 8 days, had 3 different Chinese buyers interested.
Realtor hoping for a bidding war. So, of course, is my friend.
zoned for commercial I suppose.
Economic activity continues to shrink, according to plans.
“Depending on how much higher energy prices go this winter (gasoline, natural gas, home heating oil etc.)…”
Spot gasoline futures up 61 cents/gal over the last month, 29 cents just this week, and it’s only Tuesday.
At the same time, natural gas in Texas is nearing $0.
https://finance.yahoo.com/news/texas-natural-gas-drops-toward-162250182.html
Nolte: Heating Oil Already Being Rationed in Joe Biden’s America (breitbart.com)
I’ve seen houses in my far north DFW locale drop by as much as 100,000 since June and they are still on the market. I can only imagine that the dozen or so homes around me that sold 6-9 months ago that had multiple offers way over asking are now underwater.
Just about anything bought in the last year will be underwater soon. If the buyers did not sign up for an ARM, they might just weather it.
If they are not planning to sell, they won’t lose money. While I doubt that we’ll see the incredibly unrealistic mortgage rates of recent years again, rates are still well below those I paid for a house forty or so years ago. This, too, will pass, but it stinks while it lasts.
When we moved into a brand new neighborhood in 1968 most of us 20 families were happy with our mortgage rate of 5.75%. Nobody complained. Everybody pretty much stuck to the acceptable practice of keeping the monthly mortgage payment to a quarter of your salary. I know I know it was long ago but it was good.
I started in banking in 1983 and the rules were very clear and no one seemed to balk at them…your total housing costs (PITI) should not exceed 28% of your monthly gross income and all other debts included (car loans and credit cards) should not exceed 36%.
This was back in the days when most people put down 20% on a house, unless they went FHA, which only required 3% down (and which most sellers hated) or VA, which only required 1% down (if I remember correctly – we didn’t do many of those). The standard rule was that you could afford a house that was 2 1/2 times your annual salary and that was generally pretty doable for most families, although the Carter years forced many mothers into the workforce so that really changed a lot of dynamics (and NOT in a good way).
Now you have two income couples, both working in tech, making $125K each (minimum) and they are struggling to come up with 10% down on an $800K house, which will stick them with payments of over $4K per month just for their house…
I have a lot of issues with the way that Gen Z’ers handle their money (and handle their lives) but I do have sympathy for those who are trying to do the right thing, because they have been screwed over by three generations of politicians who didn’t give a da*n about them and the American Dream is slipping further and further out of their grasp. It is why so many of them, foolishly, are looking for Socialist (or even Communist) solutions to their problems. They simply don’t know what they don’t know but they are angry, and the media, the politicians, and their teachers (especially college profs) are lying to them about WHO is causing the problems and HOW to fix them!
I know a plumber, who was making 100k+ back in 2007, who bought a 700k home in Campbell, CA.
He had to work constant OT to make his payment.
His monthly was 4,000$
The bottom dropped out in 2008, massive unemployment for union plumbers.
He couldn’t make the payments anymore.
He sold the house for 500k.
Now, he rents a house for 4,000 a month.
Work is steady for him, and he clears 100k easy,
but that house now costs 1.1M and he can’t rebuy into that Campbell market.
Vikingmom I agree with everything you posted there. I first entered the housing market in 1979 and the lending rubrics were very close to what you stated. I did qualify for a VA/FHA 30-year fixed 10.5% loan for my first house and it required 2.5% down, as opposed to 20% down for a conventional mortgage. We re-fi’d to a 15 year loan after interest rates dropped under Reagan.
The equity we gained on selling that first house 17 years later helped us easily buy our current home. I don’t see the same path to equity for the current young adults given the market dynamics of late.
Similar here. Was in college. 1st home. 11%. 1983?
Perhaps you are in the real estate business. I respectfully disagree with your assessment. What is happening now has no historical reference point. This is entirely different than the previous collapses. This has a long way to go before the bottom is realized, and I believe the climb back up will be very slow to non existent. What once was will be no more, by design I might add. With our political realities don’t expect much relief from those in government. I will vote, however I expect very little to change regarding our current trajectory.
This purposeful destruction. I have hope for a November resolution but I have neighbors with democrat campaign lawn signs calling for MOAR.
Forgive my ignorance tonight, but what does MOAR stand for?
It’s a cutesy form of more.
Mangled Objectives Abound Republican!
We moved from Long Island to Fla. Gulf Coast 16 months ago. 2.5 percent mortgage with 25% down. Very Trump area. Wife wanted to wait a year. Thank God I pushed to get out and move before all this
Welcome to FL. Fellow LI’ander, been here 30 years. Good move.
We just wish our grown kids would follow.
Maybe they will, that’s how my siblings and I landed in FL. Regular visits with Mom & Dad made it our 2nd home. We all moved down at some point.
Strange for someone from NY to land on gulf coast, mostly they land here on east coast, it’s that I-95 deal.
Keep those Yanks to the east so they don’t mess up the Redneck Riviera
I lived in Clearwater during the 80s.. There were eight employees where I worked and not one of us grew up in Florida. Mostly from New York and Michigan.
I ain’t far from y’all.We need to have a CTH inshore saltwater fishing contest before it all goes sideways..
Yes! And dare your enemies to start a Biden boat rally!
Yeeeeeeehaaaaww! 🤟
Love the gulf coast welcome neighbor.
I’m at Cedar Creek Lake about 2 hrs SE of you.
Housing starts still underway but lakefront property values are declining.
Going up? I recall that elevator guy asking us as a little kid. Often we said, going down. Up and down, here comes the Biden Merry Go Round!
The players are playing, there will winners and losers. The question is always where will the winning side be located? This game of change is in its early stages. Wait till there is more blood in the streets.
After the upcoming elections a new phase will take place, political winners and losers will clamor for their fans to gear up and do “what’s right.” Right for who? Sit back and you will soon see.
Note how the dynamic and talented Hillary Clinton is coming out from the woods where she has had some Southern Boys build a northern winery these last few years, all dressed up with slogans at the ready. Abort abort…we will see how that call worked out this coming November. My hunch, not much. What will replace it?
Hillary gave us a clue…the call to arms is about to take place only she will not be anywhere close to the front lines, nor will Bill, nor Obama, nor anyone of their so called leaders. Let the little people duke it out. Maybe one of their media clowns will take a hit and leave blood on the floor, I don’t know, but this I do know…they have no intention of leaving their golden seats of power without a blood thirsty fight. And that guy in the House, McCarthy of the republicans, already ran up his white flag (no getting even!)…he has got to go.
Get Jim Jordan ready or ask him who else would be a fighter because that is what the republicans are going to need, with or without Donald Trump leading them.
If the Speaker ain’t MAGA, they are,RINO.
So, MTG or Boerner, otherwise don’t bother.
Focus on State Legislatures and Governors; 30 State Legislatures are R majorities, 28 Govs are R.
MUCH easier (by comparison) to get a MAGA Gov and a MAGA Majority Legislature, in a State than unseating the RINO hierarchy in Congress.
Not to say don’t vote for MAGA candidates for U.S. Senate and House, ..
Just saying focusing, obsessively on CONGRESS, ….AT THE EXPENCE of Govs and Legislatures, is what got us into this mess.
Senate Banking Committee Chairman Sherrod Brown (D., Ohio) asks Jay Powell to slow down interest rate rises in a letter one week before the FOMC meeting (and two weeks before congressional elections)
https://www.banking.senate.gov/imo/media/doc/fed_full_employment_letter.pdf
If Mr. Trump had done that it would have been called meddling in an election.
Steve Cortes has a beautiful mind. Love that guy!
Rents will always continue to increase as long as we are importing MILLIONS of illegal immigrants, and the West coast can’t figure out how to control fires.
Rents around here are skyrocketing and so are evictions.
If Ted Wheeler is going to build housing for the homeless, he’d better get moving.
I keep wondering where the illegals are living. They aren’t amongst the homeless (here in CA anyway). The “housing shortage” never made sense to me – the first time home buyer age group is not as large as the older boomers who should be exiting the housing market.
A lot of millennials are in the mix too because they weren’t first time home buyers at the usual historical age range because of the financial crisis in 2008, which we can thank Clinton and Bush Jr. for.
I see many in my Town
who live in their cars right now in N.J.
My local park has many school/work aged Hispanics who just walk around and sitting at bench’s all day like Zombies with their eyes glued to their phones.
You see the same people every day that tells me they don’t have a place to go or something to do like work or school.
Funny thing is this started in the last year as
I have been walking at this park for years now.
Central Americans often pool their moneys, buy homes, and house 10-12 family members in them.
There are also unofficial “banks”, or piggy banks that family members put into, in order to buy homes.
When I lived in Castro Valley, CA, there were whole neighborhoods that consisted of Central American families that pooled their monies. Work trucks and cars lined every square inch of the parking spaces on the street.
Unlike the other streets nearby, which had your typical 2 cars in the driveway.
That is where many illegals are finding space. They just cram them into their “familia” homes.
Thats what I saw in the Bay Area
I suspect the feds are paying for their housing either through large
corporations or the churches.
As to the west coast fires, it was discovered that there was a let it burn unwritten policy in place. It is not that they could not control the fires, it was that they chose to let them burn. They allowed dozens of square miles to burn including the town of Greenville, and yet not one of the million or multi million dollar homes at Lake Almanor was touched. They stopped the fire when and where they wanted to.
If The Commiefornians, Chiraqis, ZooYorkers, Wiscos, Austinites(blue/green/pink hair, Texas plates)and every-dadgum-body else doesn’t stop moving to Florida because their Governors can’t live up to their oaths to their State Constitutions, long time residents will be priced out of existence.
Many already are.
Beware the Dumbasspora.
Bingo
Far right is found to be alright…
Funny thing … Bidinh is governing from the far left … but the legacy media keep labeling him “moderate”. What’s wrong with this picture? Answer: everything
https://www.breitbart.com/economy/2022/10/25/turkey-prices-set-to-soar-thanksgiving/
But, but, but … Jao Bidinh CUT the cost of your July 4th Hot Dogs! Time for an old fashioned Thanksgiving weenie roast … and you can even invite your newly transitioned college “girl” cousin to attend! Yeayyy. Thanks Jao!
This isn’t the weenie roast you are looking for.
Home prices almost invariably fall as interest rates rise. It’s just an economic fact of life. If you are not planning to sell your house, you haven’t lost anything (yet). California is affected badly because the state does everything possible to make living there very expensive. No one in his right mind would move there if he didn’t have to, and a lot of people are leaving. Those are hardly conditions that favor price stability in the housing market.
But does Gavin’s hair look good?/obviously sarc
Best receding hairline Ive ever seen
Look at the 2 WEF douchebags !
What about his voice? Horror movie
The house price bubble is beginning to pop. Check out this graph from the St. Louis Federal Reserve. It shows that real house prices are way way higher than they were the last time that the house price bubble collapsed (in 2007-2008):
https://fred.stlouisfed.org/series/CSUSHPINSA
Bubbles occur when people think that just because prices have been going up, they will continue to go up. When prices start going down, at first they go down slowly. Then the collapse. We are still at the going down slowly stage.
The more regulated a sector, the more prices rise faster than inflation.
Housing, medical care and College have consistently risen far higher than inflation.
This is the graph the federal reserve chairman, powell, looks at to decide whether or not to increase interest rates. It’s called the “core” PCE, or core personal consumption index.
You can see the 2% line powell is shooting for and from that line you can tell he’s been doing a pretty good job at keeping inflation under control, i.e., at the 2% level..
You can also see that almost immediately after biden took office, March of 2021, the index started to rise. The question is what programs did biden put in place which caused the PCE to rise, and with it, the rise in interest rates by powell? They are there.
It’s easy to conclude from this graph that biden is increasing inflation while powell is simultaneously, trying to lower.
inflation. Without question, powell and biden, two of the most powerful people in this country, are working against each other.
What will that lead to? Given the complexity of the economic system we live in, your guess is as good as anyone.
https://www.finance.senate.gov/ranking-members-news/crapo-stagnant-economy-needs-pro-growth-policies
Nothing new. For many years, there were two big office buildings in DC, full of drones pursueing their agencies goals.
One was to reduce smoking,…the other was subsidising tobacco farmers.
Ya can’t make this sh*t up, and Only in America!
My Mom’s tiny bungalow, located in a ‘hood in So Cal, built in 1912, was purchased by her in 1967, for $18K. I sold it, in September 2021, as is, for $680K. It has now been sold twice, was rehabbed, and went on the market for $1.4 million. There was a bidding war, and the final sale price was $1.5 million. The guy who bought it at that price, in March 2022, is now trying to sell it at $1.4 million. It has recently been taken off the market, due to a lack of interest.
A tiny bungalow in the ‘hood. Go figure.
Straight outta Compton?
Nobody in their right mind would ever move to that area Compton that is the hood
Twice in one year plus rehab? So the flipper made a fortune but, wth is the person who bought it already wanting to sell? A speculator getting into a bidding war? Not a very good speculator. Might be stuck making those payments a while or they might just walk away. 54 years is a lot of capital gain! That is also a very long time. I was curious so I plugged those numbers into a rate of return calculator I searched up and it amounts to a 6.95 percent annual return on the initial investment of $18,000. Probably could have done better in stocks based on historic results as an investment vehicle but, houses are also homes, castles, and other things as well.
Meanwhile in Canada
http://www.smalldeadanimals.com/wordpress/wp-content/uploads/2022/10/torontohome.jpg
http://www.smalldeadanimals.com/2022/10/25/he-doesnt-think-much-about-monetary-policy/
Still stuck in a difficult spot with trying to find reasonable housing.
Most of what I’ve seen avaliable are some combination of:
Living in a shoebox sized space in seedy and/or densely populated areas.
Commuting long distances to work with gas prices creeping up towards $4.00.
Paying more than 50% of my net income in rent with or without utilities included.
Bidenvilles are coming.
They’re already here … all over the State of CA.
Leading the way into slums and shanty towns everywhere.
By design. Biden has nothing to do with it. This is what the UN/WEF death march looks like – Agenda 2030 Urban Corridors. They want us herded into high density rental housing, riding public transportation to jobs at state-aligned monopolies.
That’s what is so maddening about it.
How do most people not know about that initiative or make note of the trends?
Well, if you bring this up around people you get one of two reactions. “Oh, you aren’t kidding. These people are evil.” and much more commonly “What the hell are you talking about? Stop watching Fox News!”
Uh, I haven’t watched Fox News in years friendo. But I guess you’ll find out soon enough.
You hit the nail squarely on the head. Everything we are witnessing has been planned for a very long time.
You are also right about the repurposed corpse in the white house. Biden is not running anything. Due to dementia Biden has the brain capacity of a ten year old at best, (note the ice cream cones).
The communists Obama, Rice and Jarrett are almost certainly running the country and purposely running her into the ground. Let’s hope that if they are successful the Chinese will have no further use for them and will exterminate them like cockroaches.
The 3 you mentioned are useful idiots and will be dispatched at a convenient time. The Chinese hate minorities.
Eff them. I will be living in the woods like a Skunk Ape by then surviving on crawdads and frogs.
Lol, a “skunk ape”
Praying for you. I hope you find housing soon.
Consider the “RV lifestyle.
Lots of used units available, at FAR less than the rediculous price for new ones.
Unlike a “Mobile home” which is neither mobile (have to pay $1000’s to move) nor a home (I lived in 2 at different times) an RV you CAN move yourself.
Hence, you can find a trailer park close to where you work, and reduce commute time.
Rents are less than for apartments, and don’t increase nearly as fast.
Its an OPTION perhaps worth considering. Like anything, DO YOUR HOMEWORK.
That’s our plan.
We will sell the house and property when the kids are older, buy an RV, a small piece of land
land park it there.
Whats the point of selling, if the next place you buy is dang near as expensive?
My in-laws have a beautiful 5 acres, it’s like a park.
But it’s too big for them in their 70s. They will likely sell and move to a care home when one of them goes.
Weve talked about about buying them out when one of them dies.
Its touch and go, as you can imagine.
But there is a guest house,well water, sewer, and a good 2 acres of cleared land for any animals or farming.
We would like to keep the property in the family, as my kids have spent the past 5 years hanging out there.
So, we would sell our place in town, and assume the note on that property which is 5miles from town.
Its that or the RV
We will see.
I’m stuck in Mexifornia so I have empathy for your situation. My rent is absurd and as you mention the only relief I have available is move into a crappy place in a sketchy neighborhood. So not really an option for me. I continue to plan for the day I flee this insanity.
Just wait. The US has a 25 day supply of deisel. That’s national. Expect regional shortages to begin to appear. When there is no deisel, no matter how much food is available it can’t get to processing facilities or to stores.
FJB
https://www.bloomberg.com/news/articles/2022-10-19/a-25-day-diesel-supply-and-surging-demand-are-a-worry-for-biden
Reporting from Las Vegas here. I work as a mortgage loan officer. Loan business is down about 85%. Lots of layoffs of both loan officers and back office folks.
I bought a home in December for 10k over appraisal for $422,000 because at 59, I was tired of renting. Same home today with a 100k lower price would have a $600 higher payment than my present payment because of rates now at 7.25%. More than two times higher than my rate and no one can raise my rent. I believe prices are not in freefall here in part because of the folks escaping from CA like I did four and half years ago..
Lowest mortgage originations just reported since 1997. A lot of loan officers and staff will be gone of this continues for any length of time. Hope you survive.
Is this showing first in San fran and jose, because people are tired of stepping in sh*t and dodging needles?
Its gonna get a lot worse.
I escaped from San Jose. The answer to your question is yes.
First time I visited San Jose back in the mid-90’s I thought “Hmm, I bet this used to be a pretty nice place.” It was already getting super expensive to buy a house there if you were lured by the tech industry. You had to go south to somewhere like Los Gatos to find something not utterly ridiculous even then.
I’m not sure I agree that rents will continue to rise. Where I live in NE FL, they have flatlined.
Several landlords or multiple duplexes and triplexes in my area are telling me that for the first time in over a decade, they have gone from having bidding wars and low down time between renters when one exits to having units sit empty for weeks if not 1-2 months after a renter leaves.
There seems to be some rupturing starting in the rental market, at least with single family homes, townhomes, condos and duplexes. Not sure about apartments though. Lots of those have been built in the last few years in this area.
I notice way more empties at my place in Mexifornia. They normally would be occupied no more than a few days after previous tenant moved. I’m still not convinced they won’t raise my rates but either way I’ll find out next spring.
Over time it is a virtual certainty the pricing will return as the federal government aims to inflate debt out of existence. Now that does not necessarily mean you will ever see an equivalent purchasing power return.
Just got notice my new lease goes up 30% starting in January.
Ouch.
That’s crazy, I’m afraid my daughter is going to get hit like that. It’d break her budget. Well it’s going to break a lot of people’s budget.
I bought two 12 foot pieces of molding at Home Depot today that cost $7o.72.
Find myself recycling building materials into new projects for exactly that reason GK.
Im gonna recycle back to the return counter!!
3.75 locked in back in 2017.
So I’ve got that going for me.
I like to give PDJT credit for that.
New home building prices won’t drop for a while. Builders will just put projects on hold or back out before the due diligence period ends. I work for a homebuilder in the greater DC metro area and we are in a bit better shape than rest of county because of the bloated government. But our permitting, materials, labor and general building costs are sky high. We can’t reduce pricing but we can stop building. So much for reducing inflation through demand destruction.
As long as my house price remains stable I won’t see my property taxes rise. That’s fine by me!
Nice, since BlackRock and Co. have gone on a buying flurry to purchase just about all the single family homes to rent out.
And the imbecile posing as Bidet’s press secretary claims Democrats have lowered all of our costs on everything. The only thing that is really surprising to me is how patient all of our adversaries have been to take advantage of our morons in charge.
Can you say, Cloward-Piven?
“Squeeze them form the top down and the bottom up”- Van Jones
But everything’s great for the elites at the top and tolerable enough for the welfare/entitlement class. Just the way it’s been planned.
I bought my home in 1986 for 90K, with property taxes of 800/annum (northern suburbs of Minneapolis). In 2008, the house was appraised at 235K, with property tax of 2300. In 2012, the house was appraised at 141K, and the property tax was at 2400. Today, the house is appraised at 325K, with property taxes at 3400.
Have your property taxes ever gone down when the formal appraisal on your home dropped like the proverbial stone? Somebody has to pay all those salaries and pensions for the AFSME crowd.
There is no freaking reason for rents to be “soaring” other than simple greed on the part of some landlords.
Fellow landlords, listen up. Just because you can raise the rent doesn’t mean you should raise the rent. In many cases, you end up shooting yourself in the foot and losing money in the long run. Wise up, keep the rent reasonable and maintain a good relationship with your tenants. It’s just good business.
FWIW, mortgage rates stand at roughly 7%, which historically is not high. I can remember when rates were in the teens in the early eighties. The rates at say 3% were ridiculously low for a 30 year. My father bought a home in San Diego CA in 1949 and paid a rate I believe of around 4%, sold that home in the mid 60’s and bought another at a 5.5% rate. All these super low mortgage rates did was create a price bubble in real estate that was artificial.
One reason rents are going up is directly related to a jump in property taxes. All those crazy increases over the past few years in valuations by assessor offices all over the country are now showing up in county statements. The tax rate remains stable but valuations have skyrocketed. Property owner bills have to be paid by the renters.
And we have 5,000,000 illegal’s getting free housing
Free food
Free education
And more coming
I was a bit shocked that the three source average on my rural residential/ag property actually went up recently, like in the last week. It’s located in the production zone of Central CA. I’m seeing very few ag properties for sale in the area and rural residential is holding pretty well.
However, rural and ag in CA tend to lag the urban areas, particularly the hot urban areas, both on the upswing and downswing. That’s based on living in the area about 60 years. Property’s gotta go though, it’s time. If I never go back to California it’ll be a good life. If I have to take a substantial hit to make that happen, OK. Health and sanity are far more important than money. Still got dragons to slay.
I really dont think you can equate property value to demand side economics.
Real estate has been in a bubble, here’s the end of that bubble directly due to interest rate increases.
You can’t say rare increases don’t fix demand side inflation… But insist the value of real estate is effected like that.
Otherwise… May the markets crash across the board. We need it!
“Rents soar.” Can’t help but wonder if soaring rents are the product of software created by one company to ensure rents soar.
RealPage, a financial management company, stands accused by tenants of using algorithms to inflict financial woe on unsuspecting renters.
A law suit was filed days ago.
Worth watching because the tentacles of greed reach into the core of non property owners. This company manages collection of utilities payments as well….plus a variety of options to pay rent at a cost, and membership to improve credit ratings by paying rent.
RealPage 👁👁
Anyone know where there is data showing the decrease in homes values by counties? Is that data anyone to be found?
Thank you.
We have been forced to raise rents for 57 units by 33% and future increases are likely. Our property taxes have doubled north of Houston and we have no choice but to pass it along to the renters. The county says they were behind on raising apartment complexes taxes so in the worst timing possible they doubled our value and increased the rate effectively doubling the taxes owed. Wages are low, insurance and materials are high, the only thing saving us is no mortgage.
When the left leaning renters ask why the increases, I tell them you wanted this over mean tweets. Things were better under Trump but the media convinced everyone that he was racist or mean so now you have exactly what we all tried to tell you what would happen, that Biden would run this country into the ground. They usually look at me with disgust. Some let me continue, You got played by billionaires and now we all must deal with the consequences.
This will be worse than the Barry Obama housing crash.
Yes and no…all real estate is local.
Blue States will get hammered…they were already struggling with interest rates low. Coupled with migration to the red states where job growth continues, I feel for treepers stuck in these loser states. The value of their homes will shrink.
Red States will continue to do well…with job growth and solid red leadership. Yes there will be sticker shock over rates now vs what they were one year ago, but over time people will realize its worth it to pay more and live in a safe area with good schools. These people are now on the sidelines but will come back into the market. Also with construction costs high…which will come down because of developers not wanting uncertainty, there is no excess supply in the market.
Also, rural properties will continue to do well…people escaping crime and low lifes coddled by City govenment.
While home inventories have increased, in a normal market they are far less than adequate.
Many parents are going to take revenge on their children by leaving them large and outdated homes full of their material belongings with the upshot being a significant amount of wealth will end up in landfills and in money heaven.
I remember, not long ago, there were articles regarding Newsom taking (on favorable terms) large amounts of equity out from his home.
Like to see a follow-up to see if he is under water now on his home?
Call it karma, no?
Home prices on the decay here in Colorado, as well. Imagine that, just in time for the Globalists to buy all of the available property and rent abodes to those of us who survived the first plandemic purge. If you sell to any Corporate interests, you are as big a part of the problem as the Globalist Cabal, I say.
Something I have thought about…was the pandemic part of the Dim playbook to destroy the economy of select cities and destroy RE values in order to take advantage of the situation?
I know they shorted the stock market (all with advance information) to drive it down with C-vid and then rode it up when the vax came on the market.
But I have to believe this was part of the overall plan.
“They” play the long game…
Governor Newsom house gonna be underwater soon with all that equity he took out on favorable terms.
What’s the bank going to do?
Curious minds want to know.
It looks like more cheap properties are or will be on the market soon for Blackrock et al to snatch up and rent out. The plan is to make everyone a renter, except for the top of the top. New feudalism is in vogue. I’ll coin the term “newdalism” now to summarize the concept.