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There is no such thing as "commodity and asset inflation."
Inflation is a rise in the general price level - not the increase in any product or sector.
The classic definition of inflation is an increase in the money supply, not price levels. The money supply inflates and deflates, prices don't- they rise and fall. Rising prices are one consequence of inflation, but I it is not inflation itself.
The housing bailout proposal is only going to keep prices higher. There are roughly 2.7 million houses in Covid Forbearance, Biden Administration is proposing to allow eliminate/cancel all the accrued interest, fees and push those payments out to 40 year mortgages. We were expecting to see some foreclosures later this year, but it looks like there wont be any this summer through next year with this plan.
Additionally were printing money out of thin air, interest rate are to low and its making demand over exceed the supply. House prices and materials are just going to keep going up so hold onto your assets.
We say in the banking world that a rising interest rate environment kills deals. Low interest rate environments tend to make many unattractive deals, attractive.
I have watched various overpriced items, just sit, and sit, and sit........no price-drops, no concern that it is not selling, no willingness to budge in-order to sell that product.
Charging a ton more, while selling a lot less, may be a good tactic to keep the revenue the same while having to do less work.
A simple example is beef-liver. Many stores now only carry it in their freezers.......because it just sits and sits and they do not want to have to throw it out. But the little liver that many stores carry in their freezers is not selling for 99-cents a pound, but $5 a pound. So they sell a lot less, but make-up for it by charging much more and having nearly no product that is thrown away.
I have been building a house and doing it myself. So I am very aware of the prices of things and have had to scale down what I am doing a little bit. Thankfully I bought the bulk of copper and wood and materials I needed last spring when I started. However the guest bedroom and bath can be added later. Also the deck is being scaled way down. A 2x6 that was $8 last year is $16 this year.
Any savings on interest rates is being wiped out or even eclipsed by this and the rising price of pre-existing homes. It is becoming problematic for everybody involved. That being said i own shares of a few materials companies but that doesn’t really help me now.
Don’t even get me started on the price of workers.
A lot of demand for materials (and probably handymen) as DIY projects spiked.
The unexpected strength of the home remodeling market made 2020 the tenth consecutive year of expansion for the industry, but the pandemic disrupted several long-term trends. “From 2010 to 2019, homeowners largely relied on professional contractors, and remodeling activity was heavily concentrated in coastal metros,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. “But in 2020, amid concerns about having contractors in the home, DIY projects gained new popularity, and remodeling activity shifted to lower-cost metros where larger shares of younger households—traditionally the most active do-it-yourselfers—could afford to own homes.” [Interactive Chart] In late March of last year, 60% of respondents to one homeowner survey had begun at least one DIY maintenance or improvement project in the previous two to three weeks; by early May, the share had jumped to nearly 80%. Additionally, during the pandemic, many urban renters purchased homes—a transition that often begins a new cycle of improvement projects—in outlying communities in search of safer living conditions, more space, and lower housing costs.
There are millions of rich people who sat home for the last year not spending money. Their portfolios are up significantly. They largely don’t care about material cost since most of the cost for any home improvement project is labor. Every contractor I know is flat out doing premium remodeling jobs. Housing prices are up so much that nobody would consider building a middle class starter home when all the profits are in high end construction and remodeling. If you’re not high income or high net worth, this isn’t the time to be having an addition put on your house.
There are millions of rich people who sat home for the last year not spending money. Their portfolios are up significantly. They largely don’t care about material cost since most of the cost for any home improvement project is labor. Every contractor I know is flat out doing premium remodeling jobs. Housing prices are up so much that nobody would consider building a middle class starter home when all the profits are in high end construction and remodeling. If you’re not high income or high net worth, this isn’t the time to be having an addition put on your house.
They are building them here like there is no tomorrow. I just had a shed built last month - a nice one. Probably paid 30% more due to lumber prices, but I wanted it done and I could afford it. And I am certainly not rich.
They are building them here like there is no tomorrow. I just had a shed built last month - a nice one. Probably paid 30% more due to lumber prices, but I wanted it done and I could afford it. And I am certainly not rich.
What area is that in, Texas? I'm doing a GIS project at work and couldn't believe the magnitude of new construction going on in many areas there.
What area is that in, Texas? I'm doing a GIS project at work and couldn't believe the magnitude of new construction going on in many areas there.
Southeastern VA and Northeastern NC.
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