His comments have merit. There is very little inventory and high demand; thus causing crazy prices. My daughter bid on a home in Old Bridge over the weekend. She bid over what was a high asking price. She was informed today that there were almost 2 dozen bidders and that her “bid was quite far down the list.” We need more supply, but few will be selling their home that has a 2.75% 30 yr mortgage. This home was on the market, as the seller (who owned the home for 65 years) is around 90.
OT: Stock and Investment Thread
- Thread starter RU05
- Start date
His comments have merit. There is very little inventory and high demand; thus causing crazy prices. My daughter bid on a home in Old Bridge over the weekend. She bid over what was a high asking price. She was informed today that there were almost 2 dozen bidders and that her “bid was quite far down the list.” We need more supply, but few will be selling their home that has a 2.75% 30 yr mortgage. This home was on the market, as the seller (who owned the home for 65 years) is around 90.
Agree - but the market doesn’t seem to care (yet) and barely blinked at the banking turmoil. If the market is truly forward looking I’m surprised bank failures and credit tightening didn’t result in a pull back.
I’ll play. are those people selling to rent? If not, aren’t they just going to add to the demand side. How does that help?
This whole RE market is buyer-seller gridlock. IMO, sellers with no where to go is the biggest driver. Rates are double what potential sellers are currently paying. And there’s nothing on the market to choose from. And if something comes on the market that checks the right boxes it’s a bidding war and total ****-show. What incentive do sellers have to list their homes? I do think a meaningful drop in rates could help. Or, if companies forced workers to come back to the office. WFH has upended the RE market not to mention corporate relos are basically dead. Brokers have been telling me the market is easily 20-30% overvalued but buyers don’t care.
Your argument is counterintuitive. On one hand, you said the market is overvalued but you are also arguing for lower rates so people can keep it overvalued. A home is not just an investment.
CPI up 4.9% YoY - projected to be 5.4%. It was 5.6% in March.
Core CPI up 5.5% YoY- projected to be 5.5%
At least it’s not hotter than expected. Yields moving down, futures moving up .
Inflation no longer at the top of the worry list. Now passed by credit contraction and recession probabilities.
Core CPI up 5.5% YoY- projected to be 5.5%
At least it’s not hotter than expected. Yields moving down, futures moving up .
Inflation no longer at the top of the worry list. Now passed by credit contraction and recession probabilities.
I don't think Powell will see it that way. 5% is still very high and way over his target of 2%.
Well, explain to me why home prices have gone up year over year, with rates going up significantly? (It’s counterintuitive as well, but it’s reality). Affordability has gone way way down, but people are paying up because of few housing options. What is driving prices is low low supply of homes on the market, which is partially driven by current homeowners unwilling to trade up from their low rate home.
Exactly the point I was driving. Yes, the notion that lower rates = price stabilization or even decreases would be the product of increased supply. Right now we have higher rates = higher prices and that’s the worst possible scenario.
At $4.78 per share as of this morning.
That $3 level was a great buying oppurtunity. Not that I took it. Think I made 8% in 3 weeks on put premium. Whoopdee dam do.
If rates dropped to 3% tomorrow I think you’d probably see a short term spike in home prices based on current inventory…then followed by a flood of supply which would actually lead to price decreases or stabilization. Personally, I’d like to trade up and would list my house. But I have a 15 year at 2%. There are no houses to choose from. And I’m not desperate so the thought of getting dragged through bidding wars on a few good overpriced houses just isn’t appealing.
Pretty much inline with expectations. Last month was a huge drop, so this month was a tiny one (YoY).
May and June prints are the ballgame! May and June 2022 experienced the 2 largest CPI increases of the entire inflation cycle. If May and June 2023 come in on average 0.2% MoM, CPI YoY will be about 3.5% (simple math based on public data). In addition, with the coming drop in shelter CPI, the math will push CPI YoY well below 3% this summer.
Everyone will declare victory. Fed will signal their planned pivot prior to the presidential election year and essentially get the heck out of the way.
Plan accordingly!
Rate isn’t going back into the 2plus interest rates again because it was too low unless we have a severe recession or depression. Might be high 3+ or 4 % interest which may keep houses prices higher than expected.
Inflation pretty much stuck at 5%, more than twice the Fed's target. Expect a .25 hike next. May CPI likely to inch up ever so slightly. Recession by 4Q23 then the Fed holds rates steady for a 1Q/2Q24 before cutting begins. Best guess at this point. In the meanwhile, don't fight the Fed.
Increasing housing supply, especially if we are expecting a flood of it, requires more workers.
Those workers are going to need a place to live.
Plus all the people now owning 2nd homes, which they ABNB.
Not sure if price decreases are in our future.
Why do we think CPI inches upward in May?
And this recession keeps getting pushed back.
See my post above. Came in as expected, which is good. However, the CPI math looks outstanding for the next 2 prints (May and June). These months in 2022 experienced massive increases, so the base effect is huge. The data is public, so everyone can do the math for themselves.
Silly post. CPI dropped a full 1% last month. Stuck? Also, based on the May and June 2022 prints, CPI YoY will plummet again with the next 2 prints due to base effect. Math is math.
Everyone knows this. Well, I guess most people.
Good WSJ article on inflation easing (also highlights that shelter data is about to plummet):
But inflation is a comparison of price yoy, not percentage increase yoy.
Now the obvious one in the favor of inflation coming down is fuel prices. We were in the heat of it last year, right now WTI is significantly below last years prices.
That's TK inflation math. Everything going against him is about to reverse and everything in favor of his argument is going to continue (and even accelerate) in his preferred direction.
Yes, you use the actual CPI not the percentages. CPI is now 303.363. After the 2 large CPI increases in May and June 2022, the comparator CPI print pumps to 296.311.
Let's assume CPI increases 1.5 for each May 2023 and June 2023, which is the average increase over the past 4 months. This will bring us to a June 2023 CPI of 306.363. Do the simple math:
(306.363-296.311) / 296.311 = 3.39% YoY change
And this doesn't account for the upcoming massive drop in shelter CPI data.
Core CPI seems sticky. It’s been between 5-6.5% for a year. That’s problematic.Silly post. CPI dropped a full 1% last month. Stuck? Also, based on the May and June 2022 prints, CPI YoY will plummet again with the next 2 prints due to base effect. Math is math.
Everyone knows this. Well, I guess most people.
I do agree that the CPI print in two months has the potential to have a great reading. June 2022 was peak inflation and peak real estate.
Let’s hope!
Only "sticky" due to the garbage CPI shelter metric which is 40% of CPI core. Use real-time shelter data and CPI YoY core is well below 3%.
As per yesterday's Compound show, earnings are well above expectations and are starting to be projected upwards now (which means, earnings may have "bottomed" in April).
Rate hike probability fell from 22% yesterday to 14% today, after the CPI number.
BOOM! Thanks for the heads up. The only thing worse than people believing the garbage CPI shelter metric, is the members of the Fed actually using it to make forward-looking policy decisions! LOL.
A
anon_0k9zlfz6lz9oy
Guest
I’ll explain. The rate of increase have slowed significantly. The higher rates is doing its job. The strong job market is keeping prices up. If people are selling because they can’t afford to, prices will come down. If people are selling to trade up, the prices will continue to go up.