The DFW housing market is NOT sustainable (Houston, Dallas: foreclosed, student loan)

[DFW_FTW]

Originally Posted by spacecitytx

To the bolded…perfectly said.

The “Doom and Gloom” attitudes in this thread are appalling. I suppose it just dawned on me that these guys must be investors of some sort…not regular people like my wife and I, who couldn’t care less about what bubble will burst at what time. We bought our house because we love it and actually want to LIVE in it…we have no desire to flip it and make money off of it.

Jeez…all the “feeling sorry” for people who bought post Covid is just downright disgusting. If those people (including myself) had the income, credit, down payment, and ability to buy a home at the price point they wanted and an interest rate they could work with…then why or earth would they give a rats arse about “the market”?

These fellas need to lay off the apocalyptic talk.

This is for all the traders you refer too who tried to time the market and the original poster of this thread who gave the worst advice possible.

You guys couldn’t swing or scalp to save your life’s. You had no clue when to buy calls on TLT or puts on TLT.

You should’ve just taken the 4% rate when you had the chance.

Now look at what JPM has to say about affordability and how much growth Dallas has seen in real estate price.

Just incase you wants to be a smart ass they also have information about SPY, go try to time that too. LMFAO

https://am.jpmorgan.com/content/dam/...markets-us.pdf

Go read this whole packet and then try to see if you can learn something, make some changes in your dumbass decision making / reasoning process to not make these stupid life altering decisions where you don’t buy housing when it’s affordable.

You played stupid games. Guess what you won?

A stupid prize. Now keep paying rent and pissing away money for couple more years just to buy it at the same monthly payment as 2020, 2021 or 2022 but in 2025 or 2026.

LMFAO

I don’t have any empathy and sympatxhy or ****s. This is life.

Grow up big boiii and pull yourself up by your bootstraps.

[DFW_FTW]

Originally Posted by Kenro911

1) There has not been many cased in history where houses were sold for double the price of previous year. On top of being bought unseen, waived inspections, appraisals etc. Majority of houses people bought at the top they never even saw in person.

2) The above people are financially more stressed. Any loss of jobs or major increase in living cost will cause them to go under. Potentially taking everyone else with them on a ride

3) The doom talk is about the fact that median home to income is almost x8. The rents are through the roof and so are car expenses and insurance, groceries etc. The issue here is that the longer the band is stretching, the higher the chance of whiplash so bad that even people like me burn in the financial collapse. Even if that does not happen, and income to median home goes to x10, x15 whatever. This means I have to make huge plans to literally leave millions in equity for my kids. So they could afford to buy a home.

Just to put things into prespective, in 90’s the income to median home was x3.

The median income is not meant to be for buying a median house.

People need to get that fact into their head.

A typical homebuyer will have a higher median salary than your typical median salary in America.

Folks who already bought and locked in don’t matter.

I’m interested in the pool of buyers who are actively looking to buy a house.

I don’t care about the retired guy living on $2000 per month in his paid off house.

His salary / wage / income doesn’t matter. He wasn’t buying a house anyways.


The folks who are buying have lots of cash, income, stocks or use some sort of house hacking or dual income to qualify.

That is the income stat I care about and the median income on that group is more than enough to snag cheap housing in Dallas compared to other metropolitan areas that offer similar benefits.

The median Income person when taking into account all of America can go rent a 2 bedroom until they get on the same level as those buying today.

Go get a degree, learn a skilled trade, house hack. Marry a guy or girl or same sex too. Doesn’t matter. Find a way to increase your income, wages, skills and assets or keep renting.

[Xalistiq]

Originally Posted by Wittgenstein's Ghost

My point is that you being right last year about the terminal rate needing to go higher than expected doesn't mean you're likely to be right about things moving forward. You don't suddenly know more than the market or the Fed itself because you were right about a general direction once.

The Fed itself is clueless, behind the curve in taming inflation, and as Powell’s regretfully premature comments about “disinflation” on February 7 demonstrate, much too overconfident that their cumulative rate increases are sufficient to bring about a “soft landing”.

Despite a multitude of economic datapoints at their fingertips, the Fed’s, Powell’s, and Yellen’s reassuring prognostications throughout most of 2021 about the transitory nature of inflation was dead wrong.

Powell acknowledged this himself, when he conceded that the Fed waited too long to raise rates:

https://www.washingtonpost.com/us-po...s-marketplace/

Analyzing the brutal, compounding, and generationally unprecedented inflation data of 2021 and 2022, I concluded that in order to reduce inflation to historical levels, the terminal rate would need to rise significantly above what the Fed and market had priced in. I was correct.

The market, in contrast — a junkie for accommodative policy — has continuously priced in rate pauses or even rate cuts by the end of this year, despite the Fed’s repeated insistences to the contrary.

If the market knows so much, as you claim, then why did all indices post massive declines following yesterday’s troubling PCE report? The market should have fully priced in and expected that the datasets captured by the PCE would show inflation surged in January, and yet it did not.

In fact, the market’s disastrous results in 2022, the worst since 2008, are indicative that most of its “expectations” are just “speculations”.

Which is to say that the market is no better at predicting the future than me or anyone else.

Originally Posted by Wittgenstein's Ghost

Economics clearly isn't your day job.

Considering my salary earnings last year exceeded Powell’s and his minions’ Fed salaries, I’d say that’s a good thing.

Which isn’t to say that my portfolio returns over the past few years are anywhere close to theirs. Then again, I didn’t have access to the insider knowledge that disgraced Fed presidents Kaplan (Dallas) or Rosengren (Boston) did to make their insider plays:

https://news.yahoo.com/a-timeline-of...104415556.html

And Bostic (Atlanta), is somehow still employed with the Fed, despite admitting to numerous trading violations over the years:

https://amp.cnn.com/cnn/2022/10/14/b...fed/index.html

Originally Posted by Wittgenstein's Ghost

But you're concluding that you suddenly know more than everyone else because you were right and they were wrong once. That just isn't how economics works.

I have done no such thing.

I have merely called out the Fed’s and the markets’ delusional optimism about the viability of returning inflation to 2% without major economic shocks or a recession.

[Xalistiq]

Throwing more cold water on the “soft landing” narrative is a just-released white paper, co-authored by Frederic Mishkin (former Fed governor) which concludes that:

“the Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession”, according to CNBC:

https://www.cnbc.com/amp/2023/02/24/...aper-says.html

[Xalistiq]

Originally Posted by DFW_FTW

You played stupid games. Guess what you won?

A stupid prize. Now keep paying rent and pissing away money for couple more years just to buy it at the same monthly payment as 2020, 2021 or 2022 but in 2025 or 2026.

LMFAO

I don’t have any empathy and sympatxhy or ****s. This is life.

Grow up big boiii and pull yourself up by your bootstraps.

You are vile.

[DFW_FTW]

Originally Posted by Xalistiq

THE ORIGINAL POSTER'S - Xalistiq advice is vile.

Xalistiq's advice is vile

let me fix that for you

[Leonard123]

Originally Posted by spacecitytx

To the bolded…perfectly said.

The “Doom and Gloom” attitudes in this thread are appalling. I suppose it just dawned on me that these guys must be investors of some sort…not regular people like my wife and I, who couldn’t care less about what bubble will burst at what time. We bought our house because we love it and actually want to LIVE in it…we have no desire to flip it and make money off of it.

Jeez…all the “feeling sorry” for people who bought post Covid is just downright disgusting. If those people (including myself) had the income, credit, down payment, and ability to buy a home at the price point they wanted and an interest rate they could work with…then why or earth would they give a rats arse about “the market”?

These fellas need to lay off the apocalyptic talk.

You raise a very good point, but by that same token, there are people who don't want their neighborhood to be in decline if and when they should need to move. For instance, I would want to be sure I was moving to a neighborhood and city that won't be declining in 30+ years. Some people hop around so much they don't care. However, I can say from experience as my own neighborhood has gone to pot, that is a very legitimate concern. People end up trapped in a declining neighborhood with nowhere to go!

Despite conventional wisdom, It's just as bad if not worse now for the "move up" buyer as for the first time buyer. In fact, it may be worse.

There is a rapidly growing gap between the rich and the poor and the good neighborhoods and the bad ones. This is a huge detriment to the north Texas economy.

[numbersguy100]

Originally Posted by Xalistiq

Throwing more cold water on the “soft landing” narrative is a just-released white paper, co-authored by Frederic Mishkin (former Fed governor) which concludes that:

“the Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession”, according to CNBC:

https://www.cnbc.com/amp/2023/02/24/...aper-says.html

So the Fed doesn't know what it's doing but a paper by a former Fed chair is credible? I don't know whether that's right or wrong but there's no reason to believe one but not the other.

I personally think inflation has a while to run, but this is just me. The market went wild and acted like inflation is back to 2% when all it did was trend down from 8% to 6% (generalizing here). 6% is still really, really far way away from 2% and doesn't support any sort of case for pausing rate hikes in the near term. Of course, mortgage rates could actually fall despite rate hikes if recession fears increase due to movement in treasuries, so then you've got some small amount of tailwinds for real estate. Or I should say, people who still have stable jobs will shop at much better rates.

[Xalistiq]

The case for many more rate hikes throughout 2023 is becoming more likely.

Bullard, one of the few Fed presidents not asleep at the wheel, warns that:

“…officials should raise rates aggressively now, or the U.S. economy could see a repeat of the 1970s—when year-over-year inflation rose as high as 12%, destroying Americans’ purchasing power.”

And

“Our risk now is inflation doesn’t come down and reaccelerates, and then what do you do? We are going to have to react.”

https://finance.yahoo.com/news/dange...175207618.html

The Fed needs to abandon the notion of a soft landing, hike rates above the rate of inflation, and then hold them there indefinitely until the economy shows continual signs of cooling. A recession, as unpleasant and painful as it may be, is magnitudes less destructive to the overall economy than runaway inflation, which has been the reality for two years now.

Originally Posted by DFW_FTW

Xalistiq's advice is vile

let me fix that for you

If by chance you ever end up unemployed, destitute, or worse, I will extend compassion and pity, even though you aren’t at all deserving of it.

[Xalistiq]

Originally Posted by numbersguy100

So the Fed doesn't know what it's doing but a paper by a former Fed chair is credible? I don't know whether that's right or wrong but there's no reason to believe one but not the other.

Many sources dispute the Fed’s official soft landing narrative, including the Fed itself.

The Cleveland Fed published a paper on Thursday stating that CPI inflation will not fall to 2% by 2025 unless unemployment rises to 7.4% for a year:

https://markets.businessinsider.com/...and-2023-2?amp

The International Monetary Fund published a paper in September 2022, stating its opinion that in order for inflation to fall to 2%, the unemployment rate needs to rise to 7.5%:

https://www.reuters.com/markets/us/u...ch-2022-09-08/

Likewise, Bank of America forecasts that unemployment will top out at 5.5% this year, and that the U.S. will start shedding 175,000 jobs a month beginning this quarter (I find the second claim dubious):

https://finance.yahoo.com/news/bofa-...170000414.html

By contrast, unemployment peaked at around 10% during the Great Financial Crisis:

https://www.bls.gov/spotlight/2012/r..._spotlight.pdf