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Kind of circular logic here. As with the whole rental/eviction etc. situation... who are they going to sell to, if prices are unstable and there are no student renters?
I predict that in general we will be about where we were, with some shakeups at the individual level. There just isn't anywhere for panic reactions... to go.
There are always some buyers. Some people like you will think prices will be stable. But there is somewhere for prices to go. If a bunch of houses go through foreclosure that put downward pressure on prices. That can create its own momentum. Plus its supply and demand. If supply exceeds demand that puts downward pressure on prices. Just look back at 2008. I know there are different factors today but you can learn from that.
Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.
Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.
Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
you want to buy a $42,000 car with $45,000 income? Wow!
There's 5 million barrels per day less demand. The lower price is having less of an impact. Unfortunately, under the way the government calculates inflation, they automatically assign a larger weight to a component that falls in price. The fake weightings, substitutions, and hedonic adjustments only work one way --- to suppress the index.
Contractor prices haven't declined and neither have consumer electronic prices.
Give it time. Some people will run out of money. You’re only gonna be able to pass these moratoriums and close down businesses for so long before you might as well pour a gallon of gas on the whole thing and set it on fire
Quote:
Originally Posted by ddeemo
I am actually surprised that prices haven't gone up much for staples like food. For us, our income hasn't really changed much (retired) but our costs have gone down.
Prices on food in my area have gone up 10-20% depending on what you buy. There are very few specials especially on meats and fruit. household and essentials have gone up.
Quote:
Originally Posted by armourereric
My 2 examples:
Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.
Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
Dude why are you looking at a 42,000 or 47000 dollar car when you make 45k. Especially right now. They did you a favor by letting you walk. Do yourself a favor and at the most you should be looking at is a 3-4k car. They're out there.
There is no reason for a business to give discounts or specials unless there is a reason like overproduction. Construction hasn’t stopped.
There are always some buyers. Some people like you will think prices will be stable. But there is somewhere for prices to go. If a bunch of houses go through foreclosure that put downward pressure on prices. That can create its own momentum. Plus its supply and demand. If supply exceeds demand that puts downward pressure on prices. Just look back at 2008. I know there are different factors today but you can learn from that.
I think you can analyze til your 'lyzers fall off, but it's on insufficient data and a complete lack of meaningful indicators. You can't apply generalities to this; I don't think you can even compare the last two recessions to it. The dot bomb was comparatively tiny and mostly affected those heavy into tech stocks and some bottom third of employees working for shaky VC startups... pretty much everyone else was fine or even prospered.
2008 was bigger, deeper and wider but still didn't affect anyone much outside the overinflated mortgage arena, which although big is not "everyone and everything." And by most metrics we recovered pretty quickly. (And even built ourselves a whole new layer of bought-'em-cheap investor landlords. Oh, well.)
This is different. It's everything, everywhere, everyone... globally. There hasn't been an event like this in at least 90 or so years, and I could make an argument that the GD isn't much of a comparision, either, due to vast economic and other changes, if I wasn't in a hurry to get to lunch. So maybe this is the first real event of this scope and scale in industrialized times.
New territory for absolutely everyone from Greenspan, Smith and Krugman on down to, well, some of puffier pundits here. I suspect that no large consensus of great minds will get the outcome even mostly right until the trends are quite obvious. (In other words, economists doing what they do best.)
But analyze away on a small scale and with old indicators. I don't mind.
I think you can analyze til your 'lyzers fall off, but it's on insufficient data and a complete lack of meaningful indicators. You can't apply generalities to this; I don't think you can even compare the last two recessions to it. The dot bomb was comparatively tiny and mostly affected those heavy into tech stocks and some bottom third of employees working for shaky VC startups... pretty much everyone else was fine or even prospered.
I agree the dot com bubble was not a big deal to most people.
Quote:
Originally Posted by Therblig
2008 was bigger, deeper and wider but still didn't affect anyone much outside the overinflated mortgage arena, which although big is not "everyone and everything." And by most metrics we recovered pretty quickly. (And even built ourselves a whole new layer of bought-'em-cheap investor landlords. Oh, well.)
2008 had 10% unemployment rates. It effected the economy across the board. It did effect parts of the country worse than others. Nothing like what we are dealing with today of course but it was probably the most severe downturn since the great depression at that point. Nothing to sneeze at. It started in the mortgage market but spread all over. I would argue that the recovery was slow and sluggish compared to past recoveries and considering all the money that was thrown at the Great Recession.
Quote:
Originally Posted by Therblig
This is different. It's everything, everywhere, everyone... globally. There hasn't been an event like this in at least 90 or so years, and I could make an argument that the GD isn't much of a comparision, either, due to vast economic and other changes, if I wasn't in a hurry to get to lunch. So maybe this is the first real event of this scope and scale in industrialized times.
New territory for absolutely everyone from Greenspan, Smith and Krugman on down to, well, some of puffier pundits here. I suspect that no large consensus of great minds will get the outcome even mostly right until the trends are quite obvious. (In other words, economists doing what they do best.)
But analyze away on a small scale and with old indicators. I don't mind.
No one knows exactly how it will shake out. But to get back to the OP prices are dropping on many things and it makes sense that real estate will take a hit. I am an real estate investor. Last thing I want is falling prices and lower rental demand. But to ignore that possibility is silly.
people can speculate all they want about the price of goods in the future, much is unknown, but this much requires no speculation....if you're unskilled and/or uneducated and struggle to make ends meet before the pandemic, you'll be in the same shape once this ends. Conversely, people who have means before this pandemic in most cases will end up back on top.
people can speculate all they want about the price of goods in the future, much is unknown, but this much requires no speculation....if you're unskilled and/or uneducated and struggle to make ends meet before the pandemic, you'll be in the same shape once this ends. Conversely, people who have means before this pandemic in most cases will end up back on top.
How did that line of reasoning work out for Louis XVI and his rentier friends back in 1789? The government faced supply chain disruptions and debt problems and one day the “unskilled and/or uneducated” people took matters into their own hands.
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So maybe this is the first real event of this scope and scale in industrialized times.
