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Much more qualified than you. At least, I've worked with economic numbers in real life and have studied the issue in the past 25 years. At least, bring something to a discussion other than empty rhetoric which can't be substantiated by facts.
Ah.
Since you have not the slightest idea what my actual background is, you might want to get a little quieter, here. This is a place I hang out with non-professionals and generally post accordingly. Hint.
I don't know about others, I really don't know how people manage to survive in this city as astronomically expensive as it already is and prices rising every year at 5-7% on top of that...
I really don't know what to think about cities that have become terribly expensive. Did the $100k+ crowd "earn" their right to live there? Do those who can't afford those rents etc. have any "right" to equal residence?
I do know that nothing dies faster than a gentrified zone that loses its cachet. They tend to sink to levels that not even the former residents will tolerate. So maybe there is something to socially engineering a wider mix of socioeconomic levels instead of, say, letting Seattle or SF be nothing but a very wealthy ungated development.
I rent, just got my rent increase which is annual and it's 6% (Los Angeles area). Everywhere around I see prices rising more like 4-5%. Inflation is more like 5% going by anecdotal evidence. Yet, the government insists inflation is under 2% and now they are going to CUT interest rates, madness.
The key phrase being 'going by anecdotal evidence'.
Which is, of course, the wrong thing by which to go. Your sample size is hopelessly small and absurdly limited.
May’s 12-month consumer-price index came a couple weeks ago at 2%—and it’s wrong.
Pick your measure. The CPI, the GDP deflator, the chain-weighted CPI, or even the trendy personal-consumption expenditures index—each shows an inflation number within 0.3 percentage point of the others.
Yet... all of these common measures overshoot by at least 2 percentage points, and maybe even 5 or more. That’s because of the flaw in the Bureau of Labor Statistics’ "hedonic adjustment", which totally misses the way the cost of technology declines over time. For example, by the time the BLS puts something new in its CPI basket -- say, a smart cell phone or a WiFi enabled TV set or brushless motor battery operated power tools, the item has already declined in price down the steep part of the curve & is (relatively) inexpensive. Many things are now free, replacing things that used to cost a lot, and this decline is nowhere incorporated into any of the popular inflation metrics. For example, Google Maps & Waze, language translation, electronic document signatures, etc etc.
Even Alan Greenspan is talking about the reported inflation rate being at least 2% off, and he's studied this in detail his entire adult life:
Quote:
Quote:
“So there is a bias in the statistic. You’re getting statistics which are not correct. If you had a 2% inflation rate as currently measured, it’s the equivalent of zero for actually what consumers are buying.”
I really don't know what to think about cities that have become terribly expensive.
People tend to vote with their feet. Personally, I just don't grok sharing a studio with a couple other people just so you can live in San Francisco or Manhattan or Newport Beach. Not my cuppa joe, but if that's what they want to do, I certainly won't get in their way.
I think the economy sux...but what do I know? I've only lived on my own since 1970, owned business and real estate since 1975 and been an investor for 35 years.
Inflation is the least of the worries out there - it's the other way around! My real estate, in very "hot" areas, isn't worth a dime more than it was 10 years ago. And, no, not bought at the peak of the bubble either. Zillow says "it's a buyer market" when I look it up for the zips....and that means lower prices.
Car sales are down. House sales are down. Purchasing managers (manufacturing) index is way down (lowest in 10 years).
Fed is cutting rates BECAUSE there is a poor economy...that's the only reason they would reverse course. 40% of Americans aren't making it and you can bet a bunch others are just a bit further (maybe 2 months instead of one) from the bill collector.
I expect that once I take a beating on the house and sailboat I am selling (people don't buy boats in a down economy like this), then the money I have will go far.
I'd much rather be the buyer these days......
As far as rents, that is a different story. I own REITS that manage 20,000 single homes as well as other real estate and I'm sure they do what they can to make a profit. The Great Recession caused an 8 year (or more) slowdown of new housing meaning that there are more people who wish to rent..than rentals. Also, the Great Recession as well as the low wage economy we now have mean that less people can buy..so they must rent...more demand=higher prices.
Landlords aren't cleaning up either....with property taxes, insurance and the cost of maintaining properties, most would make nothing if not for the tax breaks involved.
Around here 250K small townhouses are "affordable housing"....no kidding (of course, LA is worse, but I am talking about S. New England).
Note that I did not say that I can't afford the increase... I said costs are inflating far above 2%, different discussions. I am not willing to pay anything more than 20% of my take home pay on housing, most people in HCOL areas are willing to pay up to 50% which I think is absolutely foolish - but then again most people are also in debt so...
Note that I did not say that I can't afford the increase... I said costs are inflating far above 2%, different discussions. I am not willing to pay anything more than 20% of my take home pay on housing, most people in HCOL areas are willing to pay up to 50% which I think is absolutely foolish - but then again most people are also in debt so...
Like I said your personal cost of living is not reflective of just a price change index
I do agree that the inflation number is skewed specifically by astronomical appreciation of home prices/rents. The inflation excluding this is rather moderate and more in line with other places in the nation.
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