[Lwcasu]

Originally Posted by 08grad

Asset prices don't come down when money is printed. The fed injected a bunch of money into the stock market (up almost 30% the past 3 weeks), and the government is putting more of it in the hands of consumers and businesses through the stimulus plan. I think anyone sitting on cash right now will eventually regret it. If this virus was a fraction as bad as the government is making it out to be, the DJIA wouldn't be at 24,000.

There are a lot of people with money who haven't been able to spend it the past month, particularly the retirees who haven't been able to go to the casinos and restaurants. When the "non-essential" business ban is lifted in a month (this is my belief - the public is starting to push back on this ban), businesses are going to be slammed with customers who have been deprived of their wants for over a month.

I have a feeling that the people screaming for home prices to come down are the same crowd who are priced out of the market and have been for years. I don't see it happening. Rates are low. Trillions of dollars are being put in the hands of consumers and businesses. There's still people buying - in my neighborhood 2 homes went pending today, there are several already contingent/pending. We're approaching pool season and homes with pools are in demand especially with the government shutting down all public pools.

In 2008 the Federal Reserve increased the monetary supply and what happened? Housing prices continued to fall. The average person is getting or going to get killed. $1250 is not putting money in the hands of the consumer, when that same guy was likely getting a lot more before. Factor in maintenance, mortgage, taxes, insurance and a house can quickly become a liability. You have a glut of baby boomers who are about to retire and unemployment sky high. Look at Japan. They drastically increased their monetary supply and houses dropped significantly in value. With their demographic problems, you can acquire houses there for practically nothing (outside Tokyo). You can actually have deflation in the housing market and at the same time have price inflation. I think that is where we are headed. I could be wrong, but you could too. And for the record I’m not priced out of the market and already own. I just see this as bad.

[Katie the heartbreaker]

I put out a thread on the Las Vegas economy and excluded housing prices for a reason. We are in unprecedented times so trying to predict where housing prices will go is futile. What happened in 1929 or 2008 is not the same as what is happening now. This time, there is going to be tons of money going directly to the people which is inflationary. More money is going to be chasing the same amount of goods. This could boost housing prices even if we are in a depression. I want to see housing prices come down, but I would not be surprised if they continue to go up.

[eventusstultorummagister]

We sit here stranded, though we're all doing our best to deny it.

[Dom Cobb]

Originally Posted by Katie the heartbreaker

I want to see housing prices come down

This sums the whole discussion up. There is a group of people who were burned in 2008, or missed buying a house in 2009-14 and now cannot afford, or have some deep schadenfreude for anyone who has been successful over the last 8 or so years and relishes an economic collapse, or a combo of all three points.

My God, if you can only find happiness in someone else’s demise, I’d suggest some deep soul searching and counseling. Being unhappy is no way to go through life.

[Katie the heartbreaker]

Originally Posted by Dom Cobb

This sums the whole discussion up. There is a group of people who were burned in 2008, or missed buying a house in 2009-14 and now cannot afford, or have some deep schadenfreude for anyone who has been successful over the last 8 or so years and relishes an economic collapse, or a combo of all three points.

My God, if you can only find happiness in someone else’s demise, I’d suggest some deep soul searching and counseling. Being unhappy is no way to go through life.

You are so off base that it is not even funny. Asset price inflation helps owners and hurts renters. It has destroyed many people even so far as to make them homeless in their vehicles. Asset price inflation can best be described as socialism for the rich and capitalism for the poor. Therefore, if you wish for asset price inflation you wish for the demise of anyone who can only afford to rent, which includes me. You have schadenfreude on us. The rich are getting richer and the poor are getting poorer, and according to you I should be happy about it? Give me a break.

[strato58]

What people wish and hope and pray has zero to do with the market. Supply and demand is all there is. I don't know how there won't be more supply and less demand with this historic pandemic. If the economy gets up quickly and people are able to have a job to go back to everything will shake out ok. Somehow I don't think that is going to be easy. Hell people can't even get their relief money and are having trouble getting unemployment in a timely manor. Housing prices were very high to begin with so any hiccup becomes a real issue. Once people start to default on loans it feeds on itself. Good thing for the fake low low interest rates because if they ever go up to historic norms it will be a disaster.

[ddrhazy]

Originally Posted by Katie the heartbreaker

You are so off base that it is not even funny. Asset price inflation helps owners and hurts renters. It has destroyed many people even so far as to make them homeless in their vehicles. Asset price inflation can best be described as socialism for the rich and capitalism for the poor. Therefore, if you wish for asset price inflation you wish for the demise of anyone who can only afford to rent, which includes me. You have schadenfreude on us. The rich are getting richer and the poor are getting poorer, and according to you I should be happy about it? Give me a break.

What is your solution to "asset price inflation" of real estate? If you could buy a house from Amazon that would assemble itself by a robot and only cost $25k, that would have it's own economic consequences.

[Katie the heartbreaker]

Originally Posted by ddrhazy

What is your solution to "asset price inflation" of real estate? If you could buy a house from Amazon that would assemble itself by a robot and only cost $25k, that would have it's own economic consequences.

It is very simple. The Fed started to do the right thing by slowly raising interest rates and reducing the balance sheet. The result was the stock market started to crash and they reversed course. If they continued, the housing market would have returned to fair value. What is fair value? Housing prices have followed the CPI until around the year 2000 when the subprime housing bubble started. I have taken housing prices from 1980, 1990, and the year 2000 and converted them to today's dollars and come up with a figure of $220,000. That is what housing would be now with no bubbles and a fed's funds rate of 5%.

[ddrhazy]

Originally Posted by Katie the heartbreaker

It is very simple. The Fed started to do the right thing by slowly raising interest rates and reducing the balance sheet. The result was the stock market started to crash and they reversed course. If they continued, the housing market would have returned to fair value. What is fair value? Housing prices have followed the CPI until around the year 2000 when the subprime housing bubble started. I have taken housing prices from 1980, 1990, and the year 2000 and converted them to today's dollars and come up with a figure of $220,000. That is what housing would be now with no bubbles and a fed's funds rate of 5%.

Labor costs are already becoming prohibitive to the point where it's almost impossible to have SFRs as starter homes. Almost all new builds that are under $300k are condos and townhomes. I don't think devaluing current properties is going to fix this problem as builder prices are more a function of construction labor salaries. So then you are demanding construction workers take a pay cut. That will just increase flight from the industry which has already been seeing a reduction in the workforce for almost 7 years now. So then what? Increase immigration to make up for the lack of cheaper labor? That's going to **** off a whole set of other people.

You tug on one string and then new problems get revealed.

[eventusstultorummagister]

Originally Posted by Katie the heartbreaker

It is very simple. The Fed started to do the right thing by slowly raising interest rates and reducing the balance sheet. The result was the stock market started to crash and they reversed course. If they continued, the housing market would have returned to fair value. What is fair value? Housing prices have followed the CPI until around the year 2000 when the subprime housing bubble started. I have taken housing prices from 1980, 1990, and the year 2000 and converted them to today's dollars and come up with a figure of $220,000. That is what housing would be now with no bubbles and a fed's funds rate of 5%.

You speak the truth. The enemy is the deep state/shadow govt/cabal/banking cartel/elite, aka "the Fed."

The OVERreaction to the virus is a way for them to avoid responsibility and avert blame. When they failed in the Repo market back in September they realized that we were headed towards a depression and that no amount of money printing was going to help. So they decided to unleash QE Infinity to create an inflationary depression as opposed to a deflationary one. They will tax this inflation because whenever inflation is high, nominal income increases and taxes grow. Inflation increases prices and taxes increase proportionally but purchasing power plummets. Their efforts will not stabilize the economy, it will only create inflation, not jobs or wealth.

Personally, inflated home prices are of no consequence to me. What really troubles me is the war that will surely follow.