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(Fortune)   The Fed: Admits a sharp home price decline is possible. Everyone else: So you're saying there's a chance we'll be able to afford a house in the future?   (fortune.com) divider line
    More: Interesting, Real estate, Will U.S. home prices fall, market correction, home prices, first time, ongoing housing correction, wave of mortgage defaults, house prices  
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693 clicks; posted to Business » on 09 Oct 2022 at 7:35 AM (16 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-10-09 5:43:52 AM  
Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.
 
2022-10-09 6:12:59 AM  
And

Fark user imageView Full Size
 
2022-10-09 7:00:46 AM  
I would prefer to sell and buy something that is more what I need than do an addition, but whatevs
 
2022-10-09 7:42:19 AM  
The trick is to sell just before the crash to one of the real estate companies, then by your home back at a steep discount.
 
2022-10-09 7:56:56 AM  
60% of the US has $1,000 or less in savings, and are stuck in jobs where getting more is virtually impossible. Whether a good house is 50k or 500k is irrelevant at that point, for most of the populace.
 
2022-10-09 8:15:20 AM  

bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.


Boomers are cash buyers and a lot sold high and moved and looking to buy again. Current policies will make their money worth more and homes less all while the lag on price decreases will keep the best homes out of anyone borrowing most of the home out of their hands.

The system is working.
 
2022-10-09 8:42:36 AM  
Of course home prices will fall. That doesn't mean they will be more "affordable"
 
2022-10-09 8:43:41 AM  
I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.
 
2022-10-09 8:46:33 AM  
Difficulty: The Fed has also said they want you to lose your job and be forced to take lower wages.
They don't want it to be more affordable for people earning money, they want it to be cheaper for those who already have money.
 
2022-10-09 8:50:29 AM  

hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.


They didn't last time either. They held onto them until they couldn't and then walked away. I bought a foreclosure at the bottom of the market in 2011, three years after the crash. Current Zillow value is $100k over the peak from last time this happened.
 
2022-10-09 8:56:36 AM  
I've bought and sold a number of houses and can anyone explain why real estate agents are obsessed with fireplaces? Seems to be universal, even in places where you can't use them because of air quality issues.
 
2022-10-09 9:07:31 AM  

hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.


Right, markets where there is an actual drop in market values will see fewer homes for sale. More people will avoid selling if they have any choice about it.

And few will do what a corporation would do in a heartbeat. In an extreme example like your 40% drop, it's probably best to default. You might have put only $20k down on that $400k purchase. You'll lose that, but the $140k negative balance goes to the bank. It's why they made you buy them PMI, and should just be a business decision.
A default will probably have a bigger impact on an individual's future credit than a business's, but I think it's mostly about the stigma that's been tied to personal defaults and bankruptcies.
 
2022-10-09 9:26:53 AM  

natazha: I've bought and sold a number of houses and can anyone explain why real estate agents are obsessed with fireplaces? Seems to be universal, even in places where you can't use them because of air quality issues.


The short answer: People are idiots.

My house has a fireplace which I have not used in over 20 years.  It is located in the center of the living room wall which faces my driveway (I live on a hill).  The fireplace is flanked by two windows.  I hate it because that wall would be better suited with a picture window that presented a view of the front yard and the driveway.  A couple of years ago, I had made mention to a friend of mine that I wished I'd planned better when I had the windows replaced, had removed the fireplace, and then reframed it for a picture window.
"Oh, but you're looking to sell your house.  Why would you do that?"
"It's worthless, and they're energy inefficient."
"But buyers really like fireplaces."
"Don't care.  I should have thought of removing it a long time ago."
"But they're romantic.  There's nothing better when the wife/girlfriend wants to curl up with you in front of a fireplace."
"Uh-huh. And people do that maybe once every couple of years, because cleaning them and hauling wood is a PITA."
"Uh.  Well, yeah.  But still...."
"Fireplaces are stupid."
 
2022-10-09 9:32:20 AM  
I have a gas remote control fireplace and it is awesome. On/off at a moments notice and does throw off heat.

wood fireplaces are for suckers.
 
2022-10-09 9:44:44 AM  

Chabash: The trick is to sell just before the crash to one of the real estate companies, then by your home back at a steep discount.


Won't work. The Investors & Banks that bought & foreclosed on them will see their unoccupied investments fall to dust through neglect before they sell any at a discount. 2008 showed that, they just waited it out.
When you've got billions invested and guaranteed government bailouts if things get tough, you just wait it out and let the plebs starve & die.
 
2022-10-09 9:59:52 AM  

natazha: I've bought and sold a number of houses and can anyone explain why real estate agents are obsessed with fireplaces? Seems to be universal, even in places where you can't use them because of air quality issues.


Because everything they say is bullshiat. Especially in the Yamhill valley.
 
2022-10-09 10:12:31 AM  
It will still be hard if it is just me and the pets living where I am now.
 
2022-10-09 10:19:00 AM  

bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.


There's not much Powell, Biden, or Yellen can do at this point except raise rates.
My in-laws sold their house a year ago and got way more than they thought possible and now live in a luxury senior living place.  I think they put their cash in stonks though, so their "savings" has declined substantially.  Lots of complaining about money lately.
My FIL owns his own place, but has also left his entire nest egg in individual stonks and so has also seen his portfolio shrink substantially.  Both have financial "advisors".
Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.
God I hope they don't show up at my door with a suitcase flat broke.
 
2022-10-09 10:21:21 AM  

Chabash: The trick is to sell just before the crash to one of the real estate companies, then by your home back at a steep discount.


You will be buying back at a higher interest rate.  At best it would be a wash but most likely you'd lose money in the long haul.
 
2022-10-09 10:25:22 AM  
No because you'll be unemployed. 1Q2023 is not going to be pleasant.

/Hold on to your butts
 
2022-10-09 10:36:36 AM  

bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.


A high home value has no value unless you reverse mortgage it.  The money is not liquid.  All you can do is borrow against it.  I fail to see how this is remotely a goal of the Fed.  Furthermore, raising interest rates would lower the value, so they're failing at their nefarious scheme in full view.
 
2022-10-09 10:38:03 AM  

Northern: Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.


Because they're probably going to live for 10 more years and they need the growth.  You're always going to have some portion of your money in stocks until you die.  Every FA would tell you to do so.
 
2022-10-09 11:04:12 AM  

SirDigbyChickenCaesar: Chabash: The trick is to sell just before the crash to one of the real estate companies, then by your home back at a steep discount.

You will be buying back at a higher interest rate.  At best it would be a wash but most likely you'd lose money in the long haul.


Except I'll have a check for the inflated value, minus the mortgage payoff. It's offensive what my house is now vs when I bought.
 
2022-10-09 11:08:19 AM  

Intrepid00: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.
Never mind that it harms everyone in succeeding generations who might never own a home.
Boomers are cash buyers and a lot sold high and moved and looking to buy again. Current policies will make their money worth more and homes less all while the lag on price decreases will keep the best homes out of anyone borrowing most of the home out of their hands.
The system is working.


Oh shut up. God you guys are boring.  I'm a Boomer.  I bought a cheap little house when I was about 45.  It's the only house I will ever own, and i didn't live in it until last year, when i got off the road, working so that I could pay off my tiny house.  Now years after I bought it, I sit in the back of the house sometimes and think, Wow, a yard. This is my yard.  I can do anything I want with it.  I put up a fence and I sit in my yard, just like an old lady who worked hard should be able to do.

I might add that I live in a poor town, in a red state, and you wouldn't be caught dead here because you're too cool and urban to lower yourself like that.  How would you make any money?  The upwardly mobile young people have gentrified themselves right out of a home, because all they've done all their lives is look at ads that tell them to live above their means, and if it doesn't look like it belongs in an AirBnB ad, it's  not clean enough for them.  Maybe you can just stay in Air BnBs forever.....they're more up to your standards.  Sure, someone took a house off the market so that millions of you could do that, but that's not your problem, is it? The farking Boomers are.  My son probably won't get a house until his dad or I kick off--but then he'll get two.  I bet that wasn't a problem in previous generations, who had fewer houses, and more kids.  Except in your fevered mind, where everyone owned a house with a white picket fence when they were 25.
It never happened, you deluded twats.

And god forbid you might have to fix anything in your "new" house, since you grew up on computers and don't know how to do a farking thing except punch buttons on your phone and ask someone to come take care of you.  YOU can't buy a new house, that's for people who are old and have made a home for themselves in the area--but all you can buy is a new house, because you don't have to skills to fix anything, or any inclination to learn them.  That's for Poor People.  Why would you buy something that you have to work on a lot?  That's not how you handle your investments.

And why shouldn't you be able to buy a nice house when you're 30? The Boomers all did.
Please shut up.
 
2022-10-09 11:10:37 AM  

OccamsWhiskers: hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.

Right, markets where there is an actual drop in market values will see fewer homes for sale. More people will avoid selling if they have any choice about it.

And few will do what a corporation would do in a heartbeat. In an extreme example like your 40% drop, it's probably best to default. You might have put only $20k down on that $400k purchase. You'll lose that, but the $140k negative balance goes to the bank. It's why they made you buy them PMI, and should just be a business decision.
A default will probably have a bigger impact on an individual's future credit than a business's, but I think it's mostly about the stigma that's been tied to personal defaults and bankruptcies.


That last part is why we should ban corps from buying houses.  If a meat based entity will have a larger hit in their credit than a legal fiction entity, then the system is rigged.  Have each corp directly tied and married to the soul of at least one meat based entity.  Such that any crime or financial responsibility must be taken on by the avatar of the fictional legal entity.  Default on a loan?  The meat entity takes the hit.  Immolate dozens of people because you didn't replace power line hooks?  The meat entity goes to prison for life and the fictional entity shuts down because the meat entity can't take responsibility for the actions of the fictional entity.

What is good for the meat goose is good for the legal fiction gander.
 
2022-10-09 11:14:10 AM  

hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.


Market "going" prices are set by the sales that actually happen.
So, you are correct that in your example above those particular sellers won't sell at a loss. That also means they won't set the "going" prices either.
So who will?
There are certain situations that often push for quicker sales at whatever they can get. even at a loss:
estate sales (dead people)
divorce sales
moving to another town
and of course distressed sales (Foreclosure), which will increase as job losses mount and inflation eats up money

If prices fall over a number of months, the people that initially refused to sell at a loss will realize that a new reality has set in. Some may panic at further lowering prices, and sell. Some will still refuse to sell and ride out the price roller coaster for however many years it takes
 
2022-10-09 11:17:21 AM  
The owners of America are still living in a day-dream in which those pesky unions are still a force, where there is still a viable middle class, and where people have confidence in their economic futures.

None of those things are true anymore. People tend to borrow for two reasons: They have no choice, or they have confidence in their ability to pay it back. Which of these two do you think is motivating current consumer borrowing?
 
2022-10-09 11:25:10 AM  

AmbassadorBooze: OccamsWhiskers: hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.

Right, markets where there is an actual drop in market values will see fewer homes for sale. More people will avoid selling if they have any choice about it.

And few will do what a corporation would do in a heartbeat. In an extreme example like your 40% drop, it's probably best to default. You might have put only $20k down on that $400k purchase. You'll lose that, but the $140k negative balance goes to the bank. It's why they made you buy them PMI, and should just be a business decision.
A default will probably have a bigger impact on an individual's future credit than a business's, but I think it's mostly about the stigma that's been tied to personal defaults and bankruptcies.

That last part is why we should ban corps from buying houses.  If a meat based entity will have a larger hit in their credit than a legal fiction entity, then the system is rigged.  Have each corp directly tied and married to the soul of at least one meat based entity.  Such that any crime or financial responsibility must be taken on by the avatar of the fictional legal entity.  Default on a loan?  The meat entity takes the hit.  Immolate dozens of people because you didn't replace power line hooks?  The meat entity goes to prison for life and the fictional entity shuts down because the meat entity can't take responsibility for the actions of the fictional entity.

What is good for the meat goose is good for the legal fiction gander.


You do realize that all most all houses are purchased by corporations(banks) and people make payments to the corporations(banks)?
 
2022-10-09 11:25:47 AM  

cryinoutloud: Intrepid00: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.
Never mind that it harms everyone in succeeding generations who might never own a home.
Boomers are cash buyers and a lot sold high and moved and looking to buy again. Current policies will make their money worth more and homes less all while the lag on price decreases will keep the best homes out of anyone borrowing most of the home out of their hands.
The system is working.

Oh shut up. God you guys are boring.  I'm a Boomer.  I bought a cheap little house when I was about 45.  It's the only house I will ever own, and i didn't live in it until last year, when i got off the road, working so that I could pay off my tiny house.  Now years after I bought it, I sit in the back of the house sometimes and think, Wow, a yard. This is my yard.  I can do anything I want with it.  I put up a fence and I sit in my yard, just like an old lady who worked hard should be able to do.

I might add that I live in a poor town, in a red state, and you wouldn't be caught dead here because you're too cool and urban to lower yourself like that.  How would you make any money?  The upwardly mobile young people have gentrified themselves right out of a home, because all they've done all their lives is look at ads that tell them to live above their means, and if it doesn't look like it belongs in an AirBnB ad, it's  not clean enough for them.  Maybe you can just stay in Air BnBs forever.....they're more up to your standards.  Sure, someone took a house off the market so that millions of you could do that, but that's not your problem, is it? The farking Boomers are.  My son probably won't get a house until his dad or I kick off--but then he'll get two.  I bet that wasn't a problem in previous generations, who had fewer houses, and more kids.  Except in your fevered mind, where everyone owned a house with a white picket fence when they were 25.
It never happened, you deluded twats.

And god forbid you might have to fix anything in your "new" house, since you grew up on computers and don't know how to do a farking thing except punch buttons on your phone and ask someone to come take care of you.  YOU can't buy a new house, that's for people who are old and have made a home for themselves in the area--but all you can buy is a new house, because you don't have to skills to fix anything, or any inclination to learn them.  That's for Poor People.  Why would you buy something that you have to work on a lot?  That's not how you handle your investments.

And why shouldn't you be able to buy a nice house when you're 30? The Boomers all did.
Please shut up.


Ok, Boomer.
 
2022-10-09 11:28:29 AM  

TedCruz'sCrazyDad: AmbassadorBooze: OccamsWhiskers: hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.

Right, markets where there is an actual drop in market values will see fewer homes for sale. More people will avoid selling if they have any choice about it.

And few will do what a corporation would do in a heartbeat. In an extreme example like your 40% drop, it's probably best to default. You might have put only $20k down on that $400k purchase. You'll lose that, but the $140k negative balance goes to the bank. It's why they made you buy them PMI, and should just be a business decision.
A default will probably have a bigger impact on an individual's future credit than a business's, but I think it's mostly about the stigma that's been tied to personal defaults and bankruptcies.

That last part is why we should ban corps from buying houses.  If a meat based entity will have a larger hit in their credit than a legal fiction entity, then the system is rigged.  Have each corp directly tied and married to the soul of at least one meat based entity.  Such that any crime or financial responsibility must be taken on by the avatar of the fictional legal entity.  Default on a loan?  The meat entity takes the hit.  Immolate dozens of people because you didn't replace power line hooks?  The meat entity goes to prison for life and the fictional entity shuts down because the meat entity can't take responsibility for the actions of the fictional entity.

What is good for the meat goose is good for the legal fiction gander.

You do realize that all most all houses are purchased by corporations(banks) and people make payments to the corporations(banks)?


Make the banks designate a meat to be the physical responsibility holder.  The CEO maybe.  For each home it needs to bailed out on, have the meat take the financial hit.  Make their credit score negative one zillion.  The whole chain of responsibility must have meat that can be punished.

If the meat won't take responsibility, shut the bank down.
 
2022-10-09 11:30:18 AM  

TedCruz'sCrazyDad: AmbassadorBooze: OccamsWhiskers: hobbes0022: I can't imagine someone who just bought a home for $150k above market with a 2.5% APR, selling there home at $150k under their sale price because that's all people can qualify for with the current APR rates.

Seriously, monthly payment on a 400k home to 2.5% APR is the same as a 240k home with 7% APR.  Normal people are going to qualify for much less money, and no one is going to want to sell there houses for a loss.

Right, markets where there is an actual drop in market values will see fewer homes for sale. More people will avoid selling if they have any choice about it.

And few will do what a corporation would do in a heartbeat. In an extreme example like your 40% drop, it's probably best to default. You might have put only $20k down on that $400k purchase. You'll lose that, but the $140k negative balance goes to the bank. It's why they made you buy them PMI, and should just be a business decision.
A default will probably have a bigger impact on an individual's future credit than a business's, but I think it's mostly about the stigma that's been tied to personal defaults and bankruptcies.

That last part is why we should ban corps from buying houses.  If a meat based entity will have a larger hit in their credit than a legal fiction entity, then the system is rigged.  Have each corp directly tied and married to the soul of at least one meat based entity.  Such that any crime or financial responsibility must be taken on by the avatar of the fictional legal entity.  Default on a loan?  The meat entity takes the hit.  Immolate dozens of people because you didn't replace power line hooks?  The meat entity goes to prison for life and the fictional entity shuts down because the meat entity can't take responsibility for the actions of the fictional entity.

What is good for the meat goose is good for the legal fiction gander.

You do realize that all most all houses are purchased by corporations(banks) and people make paymen ...


No, a mortgage does not make a bank the buyer or owner of a property. The deed has the borrower's name only. The mortgage will have a lien on the property, but that grants no version of ownership unless and until the terms of the mortgage are violated and the lender completes a foreclosure.
 
2022-10-09 11:31:39 AM  

Rapmaster2000: Northern: Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.

Because they're probably going to live for 10 more years and they need the growth.  You're always going to have some portion of your money in stocks until you die.  Every FA would tell you to do so.


They probably invested in stocks that pay reasonable dividends, and are run by competent executives. At least, they should.
 
2022-10-09 11:33:25 AM  

ranchguy: I have a gas remote control fireplace and it is awesome. On/off at a moments notice and does throw off heat.

wood fireplaces are for suckers.


I disagree. I have a really efficient wood burning insert and used it almost every day last winter. It has a blower and heats the whole house. I only turned on the heater a handful of times.
 
2022-10-09 11:37:57 AM  
Some sort of speculation tax that ratchets up based on how many single-family homes you or your company are squatting on would probably get a nice ball rolling.  There is a need for commercial residential rental situations, only the extremely privileged can shift from living at home to having their own home with or without a mortgage, but something like this would help open up some of that inventory.
 
2022-10-09 11:45:46 AM  
Also: Public goods such as utilities should not be used as purely investment vehicles or left to for-profit market forces. Shelter and health care should be added to those lists.

Everyone should have the right to basic housing. People should be homeless only by choice.
 
2022-10-09 12:03:38 PM  
Admits?  I thought that was explicitly what they were trying to do?  After all the inflation everywhere else but home prices has nothing to do with interest rates, so literally the only thing the fed can affect by raising interest rates is to lower home prices. Not saying it's good or bad just saying they are being disingenuous if they aren't up front about that fact.
 
2022-10-09 12:26:02 PM  

Chabash: The trick is to sell just before the crash to one of the real estate companies, then by your home back at a steep discount.


I know one guy who did exactly that around the last crash.  Sold his condo, rented for a year or so, then bought the condo back when it was foreclosed on. He had planned on renting for the rest of his life, but it was too good of a deal to pass up.  As it worked out, the rest of his life was only two years. PSA if you think you are having a heart attack, call 911. Do not look up "symptoms of a heart attack on the Internet" and then die.
 
2022-10-09 12:27:07 PM  

Northern: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.

There's not much Powell, Biden, or Yellen can do at this point except raise rates.
My in-laws sold their house a year ago and got way more than they thought possible and now live in a luxury senior living place.  I think they put their cash in stonks though, so their "savings" has declined substantially.  Lots of complaining about money lately.
My FIL owns his own place, but has also left his entire nest egg in individual stonks and so has also seen his portfolio shrink substantially.  Both have financial "advisors".
Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.
God I hope they don't show up at my door with a suitcase flat broke.


Biden could have lowered energy prices (significantly driving inflation) by brokering a resolution between Russia and Ukraine and lifting sanctions on Iran. Instead he said he would blow up Russia's gas pipeline and then the gas pipeline mysteriously blew up.

Also there is zero evidence that jacking up interest rates will make housing more affordable. It may lower home prices somewhat but that just means cash buyers will get more of them because the total cost for borrowers will increase.
 
2022-10-09 12:36:26 PM  
No, no, not YOU, asshole.
Don't be ridiculous.
 
2022-10-09 12:47:42 PM  

NewportBarGuy: Of course home prices will fall. That doesn't mean they will be more "affordable"


If home prices and land value falls, but interest rates rise, what that means is that people will be paying more in interest and paying less in property taxes (which affects city and state funding) and getting more of a tax break from the paid interest in their income taxes.

This is what we get when Joe Biden keeps a Trumper as the head of the fed.
 
2022-10-09 1:02:22 PM  
So is the county going to roll back the bubble pricing tax assessments?
 
2022-10-09 1:03:47 PM  

Intrepid00: cryinoutloud: Intrepid00: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.
Never mind that it harms everyone in succeeding generations who might never own a home.
Boomers are cash buyers and a lot sold high and moved and looking to buy again. Current policies will make their money worth more and homes less all while the lag on price decreases will keep the best homes out of anyone borrowing most of the home out of their hands.
The system is working.

Oh shut up. God you guys are boring.  I'm a Boomer.  I bought a cheap little house when I was about 45.  It's the only house I will ever own, and i didn't live in it until last year, when i got off the road, working so that I could pay off my tiny house.  Now years after I bought it, I sit in the back of the house sometimes and think, Wow, a yard. This is my yard.  I can do anything I want with it.  I put up a fence and I sit in my yard, just like an old lady who worked hard should be able to do.

I might add that I live in a poor town, in a red state, and you wouldn't be caught dead here because you're too cool and urban to lower yourself like that.  How would you make any money?  The upwardly mobile young people have gentrified themselves right out of a home, because all they've done all their lives is look at ads that tell them to live above their means, and if it doesn't look like it belongs in an AirBnB ad, it's  not clean enough for them.  Maybe you can just stay in Air BnBs forever.....they're more up to your standards.  Sure, someone took a house off the market so that millions of you could do that, but that's not your problem, is it? The farking Boomers are.  My son probably won't get a house until his dad or I kick off--but then he'll get two.  I bet that wasn't a problem in previous generations, who had fewer houses, and more kids.  Except in your fevered mind, where everyone owned a house with a white picket fence when they were 25.
It never happened, you deluded twats.

And god forbid you might have to fix anything in your "new" house, since you grew up on computers and don't know how to do a farking thing except punch buttons on your phone and ask someone to come take care of you.  YOU can't buy a new house, that's for people who are old and have made a home for themselves in the area--but all you can buy is a new house, because you don't have to skills to fix anything, or any inclination to learn them.  That's for Poor People.  Why would you buy something that you have to work on a lot?  That's not how you handle your investments.

And why shouldn't you be able to buy a nice house when you're 30? The Boomers all did.
Please shut up.

Ok, Boomer.


Know-nothing twats blame anybody but themselves.
 
2022-10-09 1:13:48 PM  

twocent: Intrepid00: cryinoutloud: Intrepid00: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.
Never mind that it harms everyone in succeeding generations who might never own a home.
Boomers are cash buyers and a lot sold high and moved and looking to buy again. Current policies will make their money worth more and homes less all while the lag on price decreases will keep the best homes out of anyone borrowing most of the home out of their hands.
The system is working.

Oh shut up. God you guys are boring.  I'm a Boomer.  I bought a cheap little house when I was about 45.  It's the only house I will ever own, and i didn't live in it until last year, when i got off the road, working so that I could pay off my tiny house.  Now years after I bought it, I sit in the back of the house sometimes and think, Wow, a yard. This is my yard.  I can do anything I want with it.  I put up a fence and I sit in my yard, just like an old lady who worked hard should be able to do.

I might add that I live in a poor town, in a red state, and you wouldn't be caught dead here because you're too cool and urban to lower yourself like that.  How would you make any money?  The upwardly mobile young people have gentrified themselves right out of a home, because all they've done all their lives is look at ads that tell them to live above their means, and if it doesn't look like it belongs in an AirBnB ad, it's  not clean enough for them.  Maybe you can just stay in Air BnBs forever.....they're more up to your standards.  Sure, someone took a house off the market so that millions of you could do that, but that's not your problem, is it? The farking Boomers are.  My son probably won't get a house until his dad or I kick off--but then he'll get two.  I bet that wasn't a problem in previous generations, who had fewer houses, and more kids.  Except in your fevered mind, where everyone owned a house with a white picket fence when they were 25.
It never happened, you deluded twats.

And god forbid you might have to fix anything in your "new" house, since you grew up on computers and don't know how to do a farking thing except punch buttons on your phone and ask someone to come take care of you.  YOU can't buy a new house, that's for people who are old and have made a home for themselves in the area--but all you can buy is a new house, because you don't have to skills to fix anything, or any inclination to learn them.  That's for Poor People.  Why would you buy something that you have to work on a lot?  That's not how you handle your investments.

And why shouldn't you be able to buy a nice house when you're 30? The Boomers all did.
Please shut up.

Ok, Boomer.

Know-nothing twats blame anybody but themselves.


If an asteroid hits my car, it's my fault for not predicting asteroid strikes?  Boomers are the fault of millennials for not having time machines to stop them from using all the resources and jacking up prices of everything....?
 
2022-10-09 2:35:20 PM  
This is great timing as I'm getting ready to do an addition on one of my houses and this will lower the assessment  on that addition which will lower the amount of property taxes on it.  Only works in California due to Prop 13 BTW.

Beyond that it's going to be awful due to more and more housing being monopolized by REITs.

And regardless of my interest in lowering my property taxes I'm still very much a fan of a land value tax: https://en.wikipedia.org/wiki/Land_value_tax
 
2022-10-09 2:35:32 PM  

Northern: bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.

There's not much Powell, Biden, or Yellen can do at this point except raise rates.
My in-laws sold their house a year ago and got way more than they thought possible and now live in a luxury senior living place.  I think they put their cash in stonks though, so their "savings" has declined substantially.  Lots of complaining about money lately.
My FIL owns his own place, but has also left his entire nest egg in individual stonks and so has also seen his portfolio shrink substantially.  Both have financial "advisors".
Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.
God I hope they don't show up at my door with a suitcase flat broke.


Because their advisors aren't acting in a fiduciary duty or they've ignored their advisor's advice. I've seen both.
 
2022-10-09 2:44:22 PM  

bostonguy: Color me skeptical: It seems that all monetary and fiscal policy today is aimed at one thing: Keep home values high because Baby Boomers own most of them, and they are their primary assets.

Never mind that it harms everyone in succeeding generations who might never own a home.


That changes when you have a large chuck of boomers dying off from old age.

That rate is going to increase every day for like the next 10 years.


Next on the docket:
Raising the age of medicare eligibility while shortening the average lifespan to below 65.
 
2022-10-09 2:48:39 PM  

cryinoutloud: *Boomer rant*


*orders popcorn on DoorDash*
*awaits angery replies*

/Gen X
 
2022-10-09 3:06:38 PM  

Northern: Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies? It's incompetence at best.


Even if the financial advisor had recommended they have most of their nest egg in fixed income, there was still a good chance they were screwed anyway.

Fixed income ETF or mutual fund? Down 20% over the past year. Dividend funds? Similar. Really the only way you'd be fine is if you had a bond ladder and held everything to maturity. But then you'd get screwed by inflation.
 
2022-10-09 3:30:16 PM  

Al Tsheimers: Rapmaster2000: Northern: Why on earth would any financial advisor recommend a 75 plus year old keep their nest egg in stonks, never mind individual companies?  It's incompetence at best.

Because they're probably going to live for 10 more years and they need the growth.  You're always going to have some portion of your money in stocks until you die.  Every FA would tell you to do so.

They probably invested in stocks that pay reasonable dividends, and are run by competent executives. At least, they should.


Those two exist?
 
2022-10-09 4:15:05 PM  
My wife and I have already adjusted accordingly with our plans to purchase next year. Originally our budget was $180K. Now we've adjusted to our target of A MAX of $160K, likely lower just so we can do some improvements. To that end, this also will not be our forever home. We'll pick something we're happy with, but not planning on retiring in, then look again in +5 years. Thanks Fed, you've really helped things.
 
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