Coming Economic/Markets Crash

[Front Ranger]

That Case-Shiller, what a weenie.

[Deweydog]

3 hours ago, Front Ranger said:

That Case-Shiller, what a weenie.

Not quite as much here…

https://fortune.com/2023/07/24/housing-market-robert-shiller-home-price-prediction-outlook/amp/

[Front Ranger]

7 minutes ago, Deweydog said:

Not quite as much here…

https://fortune.com/2023/07/24/housing-market-robert-shiller-home-price-prediction-outlook/amp/

One is a prediction, other is what has actually happened to date - pure data.

Either way, anyone expecting home prices to continue to appreciate or escape a correction after years of unprecedented appreciation (during unprecedentedly low rates) and then rapidly rising rates was being unrealistic. 

[Deweydog]

17 minutes ago, Front Ranger said:

One is a prediction, other is what has actually happened to date - pure data.

Either way, anyone expecting home prices to continue to appreciate or escape a correction after years of unprecedented appreciation (during unprecedentedly low rates) and then rapidly rising rates was being unrealistic. 

Who was?

[Iceresistance]

The Fed just raised Interest Rates again, now it seems like they really want to make sure that Inflation is below 2% but not below 0%!

[Deweydog]

55 minutes ago, Iceresistance said:

The Fed just raised Interest Rates again, now it seems like they really want to make sure that Inflation is below 2% but not below 0%!

Now it’s seems like it? Today’s raise in rates is a drop in the bucket which was primarily filled last year.

[Front Ranger]

1 hour ago, Deweydog said:

Who was?

People who think home prices only go up. Trust me, as someone who has worked in real estate for a decade (though I'm currently transitioning out), there are plenty at this point.

[Front Ranger]

1 hour ago, Iceresistance said:

The Fed just raised Interest Rates again, now it seems like they really want to make sure that Inflation is below 2% but not below 0%!

Due to the base effect from last year and current trends, we could easily see inflation rise again in coming months.

[Iceresistance]

3 minutes ago, Front Ranger said:

Due to the base effect from last year and current trends, we could easily see inflation rise again in coming months.

The Fed is going to rase rates higher, and the Inflation will be replaced with rapid Deflation.

[Deweydog]

19 minutes ago, Front Ranger said:

People who think home prices only go up. Trust me, as someone who has worked in real estate for a decade (though I'm currently transitioning out), there are plenty at this point.

I’m sure there are. There are people out there that think all kinds of thing that are patently false. Hell, I can find all kinds of peer reviewed studies and such that will all but prove beyond a shadow of a doubt that the world is not flat.

As it stands, the housing market went through/is going through a fairly mild correction after what was an unsustainable, generational run thanks to an unprecedented combination of insanely low rates, stimulus cash and the overall pandemic mindset. Yes, some markets have been impacted more than others but this has not been remotely comparable to 2008.

Here in Clark County, things leveled off pretty quickly and most sectors have seen the seasonal bounce with pricing pretty much where it was this time last year. You have to get into seven figure properties to see any real softness as was seen last summer. I think a lot of it has to do with acceptance of the fact that 30 year rates under 3 aren’t coming back, but rates in the 4.5 to 5.5 range probably are in the relatively near future. Most of the sentiment here is take the sting now and then ride the refi wave in 2025.

 

[Front Ranger]

34 minutes ago, Iceresistance said:

The Fed is going to rase rates higher, and the Inflation will be replaced with rapid Deflation.

Very possible. The "soft landing" scenario seems to be more popular these days, but the only thing I think supporting that is the stock market bounce back this year, along with continued low unemployment.

It's possible this time really is different, but historically, unemployment is a lagging indicator of economic conditions. Almost all leading indicators are pointing to a weakening economy, and I think a recession is still quite possible, if not likely by end of the year.

[Front Ranger]

3 minutes ago, Deweydog said:

I’m sure there are. There are people out there that think all kinds of thing that are patently false. Hell, I can find all kinds of peer reviewed studies and such that will all but prove beyond a shadow of a doubt that the world is not flat.

As it stands, the housing market went through/is going through a fairly mild correction after what was an unsustainable, generational run thanks to an unprecedented combination of insanely low rates, stimulus cash and the overall pandemic mindset. Yes, some markets have been impacted more than others but this has not been remotely comparable to 2008.

Here in Clark County, things leveled off pretty quickly and most sectors have seen the seasonal bounce with pricing pretty much where it was this time last year. You have to get into seven figure properties to see any real softness as was seen last summer. I think a lot of it has to do with acceptance of the fact that 30 year rates under 3 aren’t coming back, but rates in the 4.5 to 5.5 range probably are in the relatively near future. Most of the sentiment here is take the sting now and then ride the refi wave in 2025.

 

The only thing, imo, keeping the housing market from falling to a more serious correction is very low inventory. People with 3% mortgages don't want to give those up unless they absolutely have to, so we're seeing way few sellers than normal, and that is currently fairly balanced with way fewer than normal buyers (especially first time buyers, who are mostly priced out in many markets).

If we get a real recession though, that could change things significantly. Even a 10% increase in forced sellers would tilt things a lot more in favor of buyers and likely cause larger price drops in many markets.

Denver metro is currently -7% from last year's seasonal peak.

[Deweydog]

8 minutes ago, Front Ranger said:

The only thing, imo, keeping the housing market from falling to a more serious correction is very low inventory. People with 3% mortgages don't want to give those up unless they absolutely have to, so we're seeing way few sellers than normal, and that is currently fairly balanced with way fewer than normal buyers (especially first time buyers, who are mostly priced out in many markets).

If we get a real recession though, that could change things significantly. Even a 10% increase in forced sellers would tilt things a lot more in favor of buyers and likely cause larger price drops in many markets.

Denver metro is currently -7% from last year's seasonal peak.

Definitely. Inventory here is tight and that is a big part of it and many folks don’t have a reason to move at the moment when in a more hospitable environment they might test the waters. We refi’ed twice during the pandemic and are sitting currently with a 10 year mortgage (8 yrs to go) at 1.875%. It’s less than most new car payments these days. If the economy tanks in the near future, which is possible but unlikely, things could definitely change. But with that, it will be the housing market reacting rather than driving the decline as it did when the bubble burst in 2007-08.

[Andie]

Great move on that Interest rate.  
We did that under Obama and got 2.8. 
Grab it while you can.  Inflation is on the way.  

[Front Ranger]

 

[Iceresistance]

Even know that recession fears have gone down, we are not of the woods.

The sector that boosted us is very vulnerable to sudden changes since it's a relatively new sector.

 

And if I were project a recession to come, it's going to come within 2-4 months of Election Day 2024.

[Deweydog]

On 8/17/2023 at 12:01 AM, Front Ranger said:

 

It’s funny that you rail so hard against those who go down the climate change doomsday rabbit hole but go out of your way to post this. I’m sure he has his reasons but since his 2008 fame, he’s turned into a broken clock kind of prognosticator. Loves the attention.

[Front Ranger]

8 hours ago, Deweydog said:

It’s funny that you rail so hard against those who go down the climate change doomsday rabbit hole but go out of your way to post this. I’m sure he has his reasons but since his 2008 fame, he’s turned into a broken clock kind of prognosticator. Loves the attention.

Me posting this is the same as those pushing doomsday climate narratives? 

Ok.

[Iceresistance]

The stock market has been tanking recently

[Deweydog]

https://markets.businessinsider.com/news/stocks/housing-market-unaffordability-case-shiller-prices-record-outlook-inventory-homes-2023-8

[Anti Marine Layer]

Gas prices are skyrocketing again here.

[Iceresistance]

Inflation is being stubborn

 

Inflation held steady in September, running hotter than expected (msn.com)

[SnarkyGoblin]

Man the OpenAI board really botched the layoff of their CEO.  MSFT gets hard to find talent and will probably pull back their investment to OpenAI 

Whoopsies.

https://www.wired.com/story/openai-staff-walk-protest-sam-altman/

[SnarkyGoblin]

IMO, msft will be top 3 best in the dow next 10 years.  They seem to have their s*it together when it comes to AI.

And they got the infrastructure to power it.

[Deweydog]

My pops sold his ~$300 in Microsoft stock after the ‘87 crash. I bring it up annually, planning to do so on Thursday.

[roadtonowhere08]

3 hours ago, Deweydog said:

My pops sold his ~$300 in Microsoft stock after the ‘87 crash. I bring it up annually, planning to do so on Thursday.

Ouch, that's gotta sting!

[roadtonowhere08]

4 hours ago, SnarkyGoblin said:

IMO, msft will be top 3 best in the dow next 10 years.  They seem to have their s*it together when it comes to AI.

And they got the infrastructure to power it.

Now if they could just stop making Windows a shitshow.

[FroYoBro]

Bitcoin has had a great bounce back year after the bear market. 2024 will be good as well. 

[Mercurial]

Fed is indicating a pause very late in the economic cycle.  Not since the 1975 market crash have they been so late.