Over the past few years I said (tongue in cheek) Jerome Powell's plan to lick inflation is simply "more inflation"....
Here we are.
Inflation.......... ?
- Thread starter Hobo Hilton
- Start date
Here we are.
Kicking all of the illegals out would be a good start to the housing problem. Won't happen though.
Bruh, I remember all of my low IQ friends getting houses for way more than they could afford in the early 2000's using ARMs. We all know how all of that turned out. I actually bought one of their houses as a short sale.
Financing is expensive right now. I was in a car dealership picking up a nicely optioned 2022 vehicle with a branded title for cheap, and the they were saying people are walking out with 10%-18% or higher interest rates on used cares if they have below a 690 credit score. 690-730 gets about a 8%-9% on a used car. Just nuts.
Cash is king! Still waiting for a like new F-250 super duty for $40,000. It'll come, I just have to stay patient!
That's why they are packing America with people. More people = more houses.
You take away the 100million foreign born, and the usa pop hasn't moved that much from the 80's. Housing wouldn't be an issue; resources wouldn't be an issue.
In order to get Gov Control, you need people crowded and fighting for resources. That's the plan. Plus, building houses is about the only thing that America does here anymore that can't be made in another country.
i.e. The FED is ALWAYS too late... too little. They have no idea what the fuck they are doing.
They know what they are doing... but it's not what's best for you or this country.
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate.
On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate.
On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
A "Pipe Dream". This administration has raided the coffers and run up a record level National debt. The US financial system is sunk. The only saving grace is to back the USD with physical gold.
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That plan, which the Journal report described as highly secretive, is part of a 10-page document that suggests Trump — if elected — would be consulted on interest rate decisions. In addition, the Treasury Department would be used as an added check and balance to oversee the Fed’s bond-buying activities.
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Trump advisors are considering plans to dramatically revamp the Fed, WSJ report says
Former President Donald Trump’s political operatives are putting together a plan that would give him unprecedented influence over the Federal Reserve, including a provision that could make him an “acting” central bank board member, according to a report from The Wall Street Journal.That plan, which the Journal report described as highly secretive, is part of a 10-page document that suggests Trump — if elected — would be consulted on interest rate decisions. In addition, the Treasury Department would be used as an added check and balance to oversee the Fed’s bond-buying activities.
Inflation remains untamed.
The last batch of inflation news that Federal Reserve officials will see before their policy meeting next week is in, and none of it is very good.
In the aggregate, Commerce Department indexes that the Fed relies on for inflation signals showed prices continuing to climb at a rate still considerably ahead of the central bank’s 2% annual goal, according to separate reports this week.
Within that picture came several salient points: An abundance of money still sloshing through the financial system is giving consumers lasting buying power. In fact, shoppers are spending more than they’re taking in, a situation neither sustainable nor disinflationary. Finally, consumers are dipping into savings to fund those purchases, creating a precarious scenario, if not now then down the road.
The last batch of inflation news that Federal Reserve officials will see before their policy meeting next week is in, and none of it is very good.
In the aggregate, Commerce Department indexes that the Fed relies on for inflation signals showed prices continuing to climb at a rate still considerably ahead of the central bank’s 2% annual goal, according to separate reports this week.
Within that picture came several salient points: An abundance of money still sloshing through the financial system is giving consumers lasting buying power. In fact, shoppers are spending more than they’re taking in, a situation neither sustainable nor disinflationary. Finally, consumers are dipping into savings to fund those purchases, creating a precarious scenario, if not now then down the road.
Investors brace for 5% Treasury yields as US inflation worries mount
NEW YORK, April 26 (Reuters) - As U.S. inflation worries grow, some investors are preparing for the 10-year U.S. Treasury yield to breach a 16-year high of 5% hit last October.
Bond yields, which move inversely to prices, have climbed in recent weeks as signs of persistent inflation erode expectations for how deeply the Federal Reserve will be able to cut interest rates without further fueling consumer prices. The yield on the benchmark 10-year note is up 80 basis points this year and last stood at 4.70%, a five-month high.
Many investors are betting further weakness lies ahead for bonds. Global fund managers' fixed income allocations in the latest BofA Global Research survey are down to their lowest level since 2003. Bearish Treasury positioning among some classes of hedge funds stands at its highest level of the year, according to BofA data, even as other asset managers have increased their bullish bets.
"It all boils down to one word: inflation.
The FED Reserve Governors are scattering "like a covey of quail"....
An obvious sign they have lost control of the US monitary system.
Governor Michelle Bowman said she sees “upside risks” to inflation, and Minneapolis Fed President Neel Kashkari floated the possibility of having no rate cuts this year. The Atlanta Fed’s Raphael Bostic, meanwhile, said he could favor hiking them if inflation gets worse.
finance.yahoo.com
An obvious sign they have lost control of the US monitary system.
Governor Michelle Bowman said she sees “upside risks” to inflation, and Minneapolis Fed President Neel Kashkari floated the possibility of having no rate cuts this year. The Atlanta Fed’s Raphael Bostic, meanwhile, said he could favor hiking them if inflation gets worse.
Fed Rate-Cut Debate Shifts From When Toward If on Inflation Data
(Bloomberg) -- The debate for the Federal Reserve is beginning to shift from how many times to cut interest rates this year to whether to cut them at all in 2024.Most Read from BloombergMusk Makes Surprise China Visit in Search of Tesla Revenue BoostElliott Said to Have Built ‘Large’ Stake in...
Global Credit Bubble Watch:
April 22 – Financial Times (Huw van Steenis): “Private credit firms have enjoyed a ‘golden moment’, as Blackstone president Jonathan Gray put it last year, while banks have been on the back foot from the sharpest increase in interest rates in 45 years. In 2023, these non-bank lenders funded a whopping 86% of leveraged loans, up from 61% in 2019, according to PitchBook LCD. But one year on from the failures of Silicon Valley Bank and Credit Suisse, the strongest banks are ramping up their lending into the broadly syndicated bank loan markets… In the first quarter, 28 companies arranged bank loans to refinance $11.8bn of debt that was previously provided by private credit firms, according to PitchBook... Put another way, banks have been able to claw back just over half of the $20bn that shifted in favour of private credit firms in 2023.”
April 22 – Financial Times (Huw van Steenis): “Private credit firms have enjoyed a ‘golden moment’, as Blackstone president Jonathan Gray put it last year, while banks have been on the back foot from the sharpest increase in interest rates in 45 years. In 2023, these non-bank lenders funded a whopping 86% of leveraged loans, up from 61% in 2019, according to PitchBook LCD. But one year on from the failures of Silicon Valley Bank and Credit Suisse, the strongest banks are ramping up their lending into the broadly syndicated bank loan markets… In the first quarter, 28 companies arranged bank loans to refinance $11.8bn of debt that was previously provided by private credit firms, according to PitchBook... Put another way, banks have been able to claw back just over half of the $20bn that shifted in favour of private credit firms in 2023.”
lol, gonna get nasty..
"Secretary of the Treasury Janet Yellen’s request for China to purchase $400 billion in U.S. debt went unanswered,"
" response has been to keep the monetary presses running, flooding the market with U.S. dollars. Projections suggest that if the U.S. maintains its current military and economic strategies, its national debt could soar to an astronomical $54 trillion by 2034."
"Secretary of the Treasury Janet Yellen’s request for China to purchase $400 billion in U.S. debt went unanswered,"
" response has been to keep the monetary presses running, flooding the market with U.S. dollars. Projections suggest that if the U.S. maintains its current military and economic strategies, its national debt could soar to an astronomical $54 trillion by 2034."
U.S. and China’s standoff over debt reaches scary level
MSN
www.msn.com
From a worldwide perspective, it's already nasty. The dumb Americans continue to believe the Government propaganda as long as the checks continue to arrive.
This is the most stupid thing I've read today. Please read your post and think on it for a few minutes. Then probably delete it with your apologies. When the kids talk about "Boomer Think, this is what they mean.
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The average 30-year fixed-rate mortgage was 7.10% for the week ending April 18, according to Freddie Mac's latest Primary Mortgage Market Survey. That's an increase from the previous week when it averaged 6.88%. A year ago, the 30-year fixed-rate mortgage averaged 6.39%.
The average rate for a 15-year mortgage was 6.39%, up from 6.16% last week and up from 5.76% last year.
Mortgage rates sail past 7% as market moves into critical spring homebuying season
The average 30-year fixed-rate mortgage was 7.10% for the week ending April 18, according to Freddie Mac's latest Primary Mortgage Market Survey.www.foxbusiness.com
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Take those mortgage rates and convert them into loan interest costs/annual income for each of those decades.
I'll wait...
I'll wait...
Well, since the artificially low interest rates, and the predatory lending practices that accompanied them, are largely responsible for the inflated real estate prices that we're all dealing with now, there's no easy way out. But I'd rather pay 8%, the rate of my first mortgage, on an $84,000 house (1998) than 3% (current rate) on a $299,000 house (which is what the similar house across the street from my old place sold for in 2022).
Said differently, the rate isn't the anomoly, the property price is. In There's no disagreement that the combination of the two is untenable.
But people using "the value" of of their house as a slush fund for boats, vacations, etc probably didn't help much. In other words, it's not just Big Finance and .gov that did this, we may have had a little hand in it all ourselves.
Said differently, the rate isn't the anomoly, the property price is. In There's no disagreement that the combination of the two is untenable.
But people using "the value" of of their house as a slush fund for boats, vacations, etc probably didn't help much. In other words, it's not just Big Finance and .gov that did this, we may have had a little hand in it all ourselves.
what's you point? Trying to marginalize the rates by showing AVG per DECADE?
how about this - (it'll probably go UP soon)
The current average mortgage rate on a 30-year fixed mortgage is 7.73%, compared to 7.61% a week earlier
how about this - (it'll probably go UP soon)
The current average mortgage rate on a 30-year fixed mortgage is 7.73%, compared to 7.61% a week earlier
MSN
www.msn.com
Rates have been artificially low for a while now. These low rates have caused a spike in the values of homes because of the increase in demand - on a 30 year basis they were "more affordable". To be fair, if that were the only thing in the equation that reasoning would follow at a basic level, much like bonds. But greed got into the game - people started using homes as revolving loans, never paying them off and buying crap on what they had paid off on the home. And getting ARMS to get even lower rates. And balloon clauses. That works fine (not really) until rates start going up, credit begins to contract and the bills come due on the levered home, car, toy and the credit card. Then everything goes sideways. And then the banks realize that a good number of their loans are below market value AND nonperforming, so they curtail lending to increase reserves. Those loans they do make are at a higher percentage to offset risk.
If everyone - on both sides - would have just kept financially disciplined this would not have been such a major issue. But when greed gets into the picture on all sides it is a recipe for a true financial storm. And here we are.
OH, BTW, another bank failed last week. There are some real implications with such a small bank because of what the government did. 15 minute short video.
^^good analysis. Thanks for sharing.
Been reflecting on the cost of housing discussion above. I still feel like interest rate wise, we've been here before. However, and call me slow if you want, the property price part likely goes a level deeper than I originally posited.
Take two homeowners with similar homes and similar mortgage balances. One homeowner makes his payments with the intent of paying down his mortgage, and hopefully one day owning his house. The second homeowner uses the value of his home and some "innovative" financing to live a lifestyle beyond their means.
Knowing what we do about the appraisal process, at sale time, homeowner two's house magically appraises for at least enough to cover the mortgage and outstanding balances. A new buyer purchases homeowner two's house at the inflated amount, and can afford it due to the (previously) low interest rate. Thereby the new buyer is purchasing homeowner two's house AND debt. Voila!
Meanwhile, homeowner one's house goes up equally in value as seen in the appraisal's marketplace comparisons. However, when homeowner one sells, they they have more equity, due to the lack of debt. But, the buyer of homeowner one's house is still paying more because of homeowner two's outstanding debt and the corresponding rise in property price. Afterall, it's not likely that homeowner one is going to act against their own self-interest and discount their own house after being responsible for all those years.
Now, enter the current scenario where interest rates are not low (due to inflation, lol), and new buyers cannot enter the market and some homeowners are trapped in houses that no longer fit their needs.
And this scenario doesn't even consider those homebuyers who are underwater on their mortgages, or sociopolitical changes that cause human migration...
We all end up paying for homeowner two's bad behavior.
Been reflecting on the cost of housing discussion above. I still feel like interest rate wise, we've been here before. However, and call me slow if you want, the property price part likely goes a level deeper than I originally posited.
Take two homeowners with similar homes and similar mortgage balances. One homeowner makes his payments with the intent of paying down his mortgage, and hopefully one day owning his house. The second homeowner uses the value of his home and some "innovative" financing to live a lifestyle beyond their means.
Knowing what we do about the appraisal process, at sale time, homeowner two's house magically appraises for at least enough to cover the mortgage and outstanding balances. A new buyer purchases homeowner two's house at the inflated amount, and can afford it due to the (previously) low interest rate. Thereby the new buyer is purchasing homeowner two's house AND debt. Voila!
Meanwhile, homeowner one's house goes up equally in value as seen in the appraisal's marketplace comparisons. However, when homeowner one sells, they they have more equity, due to the lack of debt. But, the buyer of homeowner one's house is still paying more because of homeowner two's outstanding debt and the corresponding rise in property price. Afterall, it's not likely that homeowner one is going to act against their own self-interest and discount their own house after being responsible for all those years.
Now, enter the current scenario where interest rates are not low (due to inflation, lol), and new buyers cannot enter the market and some homeowners are trapped in houses that no longer fit their needs.
And this scenario doesn't even consider those homebuyers who are underwater on their mortgages, or sociopolitical changes that cause human migration...
We all end up paying for homeowner two's bad behavior.
Then somehow figure historical housing supply in there. Supply and demand. 3.2 million housing units short last time I checked.
Oh, no! Don't tell people that! It's all Biden! Or it's all investors buying up home stock for rental! No, nothing about personal responsibility. Excuse me, I have to go finance a $65,000 truck and a 2700 square foot home, then hit the internet to bitch about Biden and my finances.
You know it's bad when people can't even afford McDonalds.
Oh, and FJB
Oh, and FJB
I have been spending time with a friends Australian Shepherd puppy. Smart dog. What he has taught me is this--- His primary focus is on activity / entertainment. He will only eat when all of the activity ceases and his environment goes quiet.
I am seeing this in a certain element of society. "Entertainment takes priority over eating". Thousands spent on TV, cable, sound systems, streaming movies and they eat the cheapest, unhealthy crap available while parked on the couch for the evening. McDonald's used to be quick and cheap. It's not any more.
Culture in America is changing.
Inflation is up 17%
Peacock raising prices by $2 a month ahead of Summer Olympics
Because I was wondering the same thing that was mentioned above,,
median price of home in 1980 47,200 adjusted to 2020 (inflation) 147,879 / price per square foot adjusted.(ppsf) - 85 dollars
1990 , 79,000 , adjusted 157,169 / ppsf adj 75.00
2000 119,600 adjusted 179,331 / ppsf adj 79.00
2010 221,000 adjusted 263,000 / ppsf adj 110.00
2020 355,900 adjusted 430,639 / ppf adj 162.00 (using home size in 2014)
Avg Home size per decade (notice how home sizes were smaller after ww2 so they were more affordable)
$1 in 2020 is equivalent in purchasing power to about $1.21 today,
avg home size *I can't find 2020, using 2014
median price of home in 1980 47,200 adjusted to 2020 (inflation) 147,879 / price per square foot adjusted.(ppsf) - 85 dollars
1990 , 79,000 , adjusted 157,169 / ppsf adj 75.00
2000 119,600 adjusted 179,331 / ppsf adj 79.00
2010 221,000 adjusted 263,000 / ppsf adj 110.00
2020 355,900 adjusted 430,639 / ppf adj 162.00 (using home size in 2014)
Avg Home size per decade (notice how home sizes were smaller after ww2 so they were more affordable)
- 1930: 1,129
- 1940: 1,177
- 1950: 983
- 1960: 1,289
- 1970: 1,500
- 1980: 1,740
- 1990: 2,080
- 2000: 2,266
- 2010: 2,392
- 2014: 2,657
$1 in 2020 is equivalent in purchasing power to about $1.21 today,
avg home size *I can't find 2020, using 2014
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Now, do the same computation on the cost of a F-250 Ford XLT truck with comparable power plant, trans, etc.Because I was wondering the same thing that was mentioned above,,
median price of home in 1980 47,200 adjusted to 2020 (inflation) 147,879 / price per square foot adjusted.(ppsf) - 85 dollars
1990 , 79,000 , adjusted 157,169 / ppsf adj 75.00
2000 119,600 adjusted 179,331 / ppsf adj 79.00
2010 221,000 adjusted 263,000 / ppsf adj 110.00
2020 355,900 adjusted 430,639 / ppf adj 162.00 (using home size in 2014)
Avg Home size per decade (notice how home sizes were smaller after ww2 so they were more affordable)
- 1930: 1,129
- 1940: 1,177
- 1950: 983
- 1960: 1,289
- 1970: 1,500
- 1980: 1,740
- 1990: 2,080
- 2000: 2,266
- 2010: 2,392
- 2014: 2,657
$1 in 2020 is equivalent in purchasing power to about $1.21 today,
avg home size *I can't find 2020, using 2014
Pretty hard, since Ford got rid of the greatest engine of all time.. in gas ...460.
The ford 460ci engine loved 2 things
1) to pull
2) to drink gas
good times
1969 cobra jet mustang says,, big engine isn't just for trucks.
k, losing point of thread
Pass everything but a gas station.Pretty hard, since Ford got rid of the greatest engine of all time.. in gas ...460.
The ford 460ci engine loved 2 things
1) to pull
2) to drink gas
good times
1969 cobra jet mustang says,, big engine isn't just for trucks.
k, losing point of thread
In 1980, we did not have a shortfall of 3.2 million housing units, interest rates on mortgages were 14%, would go up over 16% for two years after that, and did not go below 10% until the 1990s.Because I was wondering the same thing that was mentioned above,,
median price of home in 1980 47,200 adjusted to 2020 (inflation) 147,879 / price per square foot adjusted.(ppsf) - 85 dollars
1990 , 79,000 , adjusted 157,169 / ppsf adj 75.00
2000 119,600 adjusted 179,331 / ppsf adj 79.00
2010 221,000 adjusted 263,000 / ppsf adj 110.00
2020 355,900 adjusted 430,639 / ppf adj 162.00 (using home size in 2014)
Avg Home size per decade (notice how home sizes were smaller after ww2 so they were more affordable)
- 1930: 1,129
- 1940: 1,177
- 1950: 983
- 1960: 1,289
- 1970: 1,500
- 1980: 1,740
- 1990: 2,080
- 2000: 2,266
- 2010: 2,392
- 2014: 2,657
$1 in 2020 is equivalent in purchasing power to about $1.21 today,
avg home size *I can't find 2020, using 2014
The average home in 1980 also had countertops and cabinets that are far different from the fancy granite countertop kitchens today, and carpet and vinyl floors.
I am not taking issue with anything you wrote. I am just pointing out some more variables to consider.
A decade of mortgage rates at 13-17% would dampen housing prices a lot even now.
Still, the bottom line is that the housing supply has never recovered from the Great Recession, when homebuilding almost stopped. There was a surplus that turned into a deficit by 2010 that kept going on a downward supply curve.
Check out where we are now on supply.
Supply and demand = price.
Demand keeps rising. Housing construction is not keeping pace with demand. Until we build more housing, that price is not coming down.
And nobody wants more housing. They certainly do not want more affordable housing.
It would not even be legal for me to build my home where I live if I were building it today (not enough square footage to meet the new local requirements).
What do you think would happen to gasoline prices at the pump if there was an announcement that tomorrow there would not be enough gasoline that 3.2 million families would not be able to put any gasoline in any of their cars? What if that situation persisted for years and years?
what if we removed 30 million illegals from the USA, would we have a surplus then?
I run that scenario daily. Why daily ? Because conditions are changing faster than any one man can fathom.
I vividly remember gasoline rationing during the late 70's. There were some very ugly scenes around the gas stations.
About 50% of Americans would sit right there on their ass and wait for "The Government" to come to the rescue.
We have seen price gouging anytime there is any kind of shortage.
It it persisted for years, Bill Gates plan to reduce the population would play out nicely.
Regarding this, you make some valid points but there is one thing to consider: supply and demand may not equal price appreciation. The current environment we are in is just this kind of situation. Money creation (made through bank lending) has been on a steady decline and will continue. Combined with the higher overall prices, interest rates on revolving credit and lower pay relative to inflation, and now the failures of apartments and other residential units due to tenants not being able to pay there now exists a situation in which people may NEED housing, but they cannot afford it. This means that while demand is there, those who need homes are priced out of the market. Prices on housing can go up, but it will only serve to further constrict the supply of affordable homes available to those that need it. The only way for this to fix is for rents and home prices to come down, and this will take a little while. And it will take bankruptcies of rental companies and resale of those properties at cheaper prices with loans that can be serviced with the funds that the prospective tenants have available. This means either the lender or the previous owner of the property has to take a loss; odds are it will be the banks, further creating tension in the financial system, especially when combined with commercial real estate losses. In some areas, rental units under construction have stopped due to financial constraints. This only serves to keep rents higher for longer. What I am saying is while the need is truly there, the demand at current prices many times is not. Until owners figure this out there will be many work-a-day people forced out of the rental and house buying markets. Prices don't go up with demand, they go up with market demand at a given price. If people cant afford it or cant pass the credit check, they live in cars, in groups, or in mom's basement.
We find ourselves in an unfortunate macroeconomic situation to say the least.
I read your entire post, and, while I know you said "supply and demand may not equal price appreciation," by which I assume you mean low supply and high demand, the rest of your post says the opposite. It seems like your post overall agrees with what I was saying.
I mean, I want a machine gun collection, but I have been forced out of the market. If prices go so high on the ask side that nobody is buying, then machine gun sellers will have to lower their prices to move the merchandise.
Same with housing. Folks are forced out by the price, but the price is only so high as long as the unit can rent or sell. So millions may be living in cars, in groups (which pays the rent, so demand with cash meeting supply), or in mom's basement, but rental units are not sitting empty and for sale homes are not sitting on the market for 18 months not moving. Folks are buying and renting at those prices, even if not everybody is.
If there are ten buyers for five homes, the price gets bid up. Five buyers end up homeless. Price does not go down because five folks are homeless.
The price will not go up so high that they are empty - price does not work that way. No renters = lower the asking rent. No buyers = lower the asking price.
Lots of buyers and renters for homes because you are 3.2 million units shy of demand? High prices and rents even while millions are in cars, groups, and mom's basement.
Homebuilders oversupply such as we saw briefly in 2008, and this situation turns out differently. The five homes become fifteen. Still, there are only ten buyers. All ten have their choice of fifteen homes. Five homes are going to sit empty. Prices will decline in that scenario and owners try to be one of the ten that sell . . .
Homes sit on the market, no offers, lowball offers. Families have to move cross country and are now paying two mortgages or their old mortgage and rent in the new place, and they are desperate to sell and start slashing price to get rid of the payment.
Of course, with the lending credit crunch in 2008-09, new home construction came to a screeching halt. Look up at that chart a couple posts up in post # 3434, and you can see the precipitous drop in housing supply relative to demand. By 2010, housing supply crossed the 0 threshold and continued into negative territory. Housing construction from that point until now never caught up. It got worse and worse which drove prices higher and higher. As you can see, it got really bad around 2020, and by 2022 the supply started heading back up to the 0 line, but when the chart ends, the supply is still 3.2 million short. Housing prices explained in one chart.
I tried to get updated information, but depending upon the study, the numbers are anywhere from 1.8 million to almost 7 million short. All of them agree, however, that we are short on supply and long on demand. Lots of buyers bidding up prices on a short set of homes. Like musical chairs.
Will not matter until Federal government quits spending
Having investment firms buying up single family homes to build rental empire changed dynamic too.
Institutional investor funds are buying large housng (SFH, Apartments, Condos, dupleses, etc). A lot of pro / con propaganda out there.
They can make "package deals" and take a 100 unit housing track at a discount that an individual can not swing.
They have young attorneys on a retainer that only do real-estate transactions.
They have a cash fund so there is no dealing with lenders.
What this means is they can rent / lease a housing unit at a discount that a conventional land lord can not do.
The leases index up and tenants simply pay more for rent while the initial cost to the institution remains about the same.
The investors get a monthly dividend. It's just business.
and add......
like in PHX, when 3 companies control 80% of the rentals:
they increase rental rates
section 8 rentals that they control has rent go up
companies get more $$ back from Gov from section 8 housing.
Yep... And the beat goes on. Until Government is removed from "housing" the problems will get worse.
Those are included in the chart. It includes homes to rent or to buy, so while that may have changed the dynamic, it does not change the chart. A corporation buying a single family home does not remove it from the chart. Even with the "rental empire" single family homes included, we are millions short of the demand.
Phoenix is not immune to supply and demand.
Phoenix affordable housing shortage slams into middle class
Nurses, teachers, and police officers are the new face of the Valley's housing crisis.
And the rest of the article talks about community pushback against rezoning and developers losing their source of financing after two years when the rezoning process is not complete. And then there is this:
It is not that hard to do that math, is it?
Almost a million persons trying to buy or rent less than a quarter million residences . . .
What is that supposed to do to the price?
It wont do anything to price. Price is totally dictated by what the market will bear. If the market cannot bear the price, the price has to come down. This is very basic econ101.Phoenix is not immune to supply and demand.
Phoenix affordable housing shortage slams into middle class
Nurses, teachers, and police officers are the new face of the Valley's housing crisis.www.phoenixnewtimes.com
And the rest of the article talks about community pushback against rezoning and developers losing their source of financing after two years when the rezoning process is not complete. And then there is this:
It is not that hard to do that math, is it?
Almost a million persons trying to buy or rent less than a quarter million residences . . .
What is that supposed to do to the price?
The only other alternative is that the government steps in, but that artificially shifts the curve, it isn't a movement along it.
I do not understand what you mean? What is the "It" in "It won't do anything to price?
Phoenix home sellers and landlords are not charging what the market will bear?
Your maxim is correct, "If the market cannot bear the price, then the price has to come down," but obviously the market can and is bearing the price and has been for decades.
Phoenix is short on housing supply and there is a lot of demand. The price is high as a result.
I'm probably being too brief, sorry about that.
What I am saying is that the purchase or rent price is not dictated by market supply alone. Likewise, demand quantities are not determined by "want" or need alone. They are intertwined. When I say that price is determined by what the market will bear, that means that the number of sales at a given price is determined by the number of actual buyers that exists within the population of those who want to need a good or service. Example: say there is 100 people who want a widget. The price of the widget is $500. The number of people who are willing to pay for the widget at that price is 20. For THAT PRICE, the market demand is 20. If the price goes down to a level acceptable to others who want to buy, the market demand goes up. This holds even for necessity goods. The reason for this is that the medium of exchange (cash) dictates what CAN and CANNOT be purchased, regardless of desire.
This means that while you are correct regarding the lack of supply, the current prices that are being charged combined with low pay and other expenses cause people to not buy or rent. BUT - when the prices for rents and home purchases come down (and they are), then more people will enter into the market as buyers/renters. Until then, there will be rental units that go bankrupt because they cannot get renters at the price they need to support the high interest rate loans they entered into. We are already seeing this in some markets; I will try and find a couple of brief videos about this later.
The conundrum I think we are all seeing is that there is a need for homes, truly. But local politics do get involved. The other elephant in the room is that wages have stagnated while inflation for the time for goods and services is staying steady or going up while there were very few full time jobs created and many part time, low paying jobs that cannot support much at all. It's one thing to decide not to purchase a Starbuck's coffee, it is entirely another to not be able to secure housing. When we look at what is going on in the economy, not being able to afford housing is a big factor in housing prices (purchases and rentals) starting to come down, especially when combined with the rental unit owners having to stay put on rents because they have to pay the loans.
Hopefully that explains it. This was a stream of consciousness so forgive any run-ons or misspellings. Its a complicated equation that has impacts into the economy and is also impacted by the economy.
What I am saying is that the purchase or rent price is not dictated by market supply alone. Likewise, demand quantities are not determined by "want" or need alone. They are intertwined. When I say that price is determined by what the market will bear, that means that the number of sales at a given price is determined by the number of actual buyers that exists within the population of those who want to need a good or service. Example: say there is 100 people who want a widget. The price of the widget is $500. The number of people who are willing to pay for the widget at that price is 20. For THAT PRICE, the market demand is 20. If the price goes down to a level acceptable to others who want to buy, the market demand goes up. This holds even for necessity goods. The reason for this is that the medium of exchange (cash) dictates what CAN and CANNOT be purchased, regardless of desire.
This means that while you are correct regarding the lack of supply, the current prices that are being charged combined with low pay and other expenses cause people to not buy or rent. BUT - when the prices for rents and home purchases come down (and they are), then more people will enter into the market as buyers/renters. Until then, there will be rental units that go bankrupt because they cannot get renters at the price they need to support the high interest rate loans they entered into. We are already seeing this in some markets; I will try and find a couple of brief videos about this later.
The conundrum I think we are all seeing is that there is a need for homes, truly. But local politics do get involved. The other elephant in the room is that wages have stagnated while inflation for the time for goods and services is staying steady or going up while there were very few full time jobs created and many part time, low paying jobs that cannot support much at all. It's one thing to decide not to purchase a Starbuck's coffee, it is entirely another to not be able to secure housing. When we look at what is going on in the economy, not being able to afford housing is a big factor in housing prices (purchases and rentals) starting to come down, especially when combined with the rental unit owners having to stay put on rents because they have to pay the loans.
Hopefully that explains it. This was a stream of consciousness so forgive any run-ons or misspellings. Its a complicated equation that has impacts into the economy and is also impacted by the economy.
How do you know they're young, and what is the relevancy of their age to your argument? Most people in the workforce are young...compared to you.
This attitude is why your kids don't come to see you, and your grandkids keep their earbuds in and play on their phones when they're forced to be around you. This is why you've been placed on a societal garbage pile. This is why you keep doubling down with your doomsday predictions dreaming of your "I told you so" moment.
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