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Thread: Real Estate Crash thread
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05-18-2019, 07:14 PM #7426
We got offered 4.25 on 30 year fixed. With points I can get it to 3.74%
A credit
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05-18-2019, 07:31 PM #7427
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05-19-2019, 04:36 AM #7428
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05-19-2019, 01:55 PM #7429
all physical retail stores are a blend of showroom/marketing/advertising/customer acquisition/return processing now.
The thing about those corps you mentioned earlier is they are heavily biased towards urban yuppies/elite. 24% of Ubers revenue is from Ny, LA, SF, Lon & GRU. 26% of WeWork locations are in those same 5 metro areas per my count. Not that those citys aren't important but they are <10% of world GDP in aggregate.
now, TSLA retail bagholders is different, but who knows if there are enough at volume to make a difference.
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05-19-2019, 07:03 PM #7430Jacket Cobbler
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05-19-2019, 07:08 PM #7431Jacket Cobbler
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please run that chart at 8% with the same payment and tell me what price house that buys....
imo when interest rates hit 8% , a house that was purchased for 8% and $400,000 aint worth $400,000 anymore
then the jacked up building supplies that are propping up the earnings per share estimates aren't going to hold and well......it's bad
here's the thinking behind this .... so if the entry level home in a town is $400,000 and building supplies and labor, land have all increased prices to support this and interest rates go up, people cant buy a house anymore because there are no $200,000 houses and their pay did not increase at a pace to handle the same monthly mortgage expense on a less valuable house...the ltv ratios dont work. fine just build $200,000 but they cant be built anymore because land, labor, and materials prices are all inflated...so the land costs plummet , great that's one piece of the puzzle, but now if labor lowers their charged price they cant make payroll, pay their bills, people are now out of work, materials prices have risen and support the earnings per share of the Lowes, Home Depots, Georgia Pacifics, USG's etc....cant meet earnings, revenue, stock prices fall hard and cut labor force....silly things like gold , precious metals go up, fuel/oil goes up...adjustable rate loans interest rates sky rocket, people losing jobs cant pay rent , mortgages, air bnb landlords arent renting their 2,3,4,5th houses, go into default, those companies stocks follow suit...cause deefaults, bankruptcies....the sky is falling kind of stuff.....but now $200,000 houses can be built because land , labor, and materials are now cheap...but hardly anyone is buying houses except the start up people that dumped their pre IPO stocks after the lockups lapse, fab wealthy, and other huge liquid wealth holders
historical interest rates... avg is about 8% for this 47 year time period (but interestingly not the average for last 15 yrs) Looks like interest rates were lowered post 911 and then again for recession to prevent melt down type scenario
Last edited by MiCol; 05-19-2019 at 07:42 PM.
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05-19-2019, 08:32 PM #7432
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05-19-2019, 10:08 PM #7433Jacket Cobbler
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nirp looks insane
on another note, here's your buying power spending $2600 a month on a mortgage at 4.5% and then 8%
at 8% people cant buy as much house. But if $400K is the entry level home cost threshold, there's going to be trouble
( i realize that i am not taking down payments into consideration - but i guess that can be like 3% or something now anyway)
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ski & ride jackets made in colorado
maggot discount code TGR20
ok we'll come up with a solution by then makers....
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05-20-2019, 08:02 AM #7434
I don't know shit for sure and I didn't sleep last night, but IMO, rates will likely never exceed 5% again and will likely average below 4%. Why? Because the deficit is so damn large and growing. Murica can not afford its dept payments, especially with higher rates. If the World ever gets sick of this countries shit, just sell all the debt, so it has to self finance. BK, the end.
That is why Dumpz was elected, to see over the BK of Murica.
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05-20-2019, 08:08 AM #7435
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05-20-2019, 08:29 AM #7436
Yeah, I don't see rates hitting 8% again either. We have better odds of being Japan with negative rates before we see 8 again IMO.
Live Free or Die
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05-20-2019, 09:19 AM #7437
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05-20-2019, 10:22 AM #7438Jacket Cobbler
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It would be great I guess not to, but how can you say for sure. Bromontane certainly presented a compelling argument i.e. that the powers that be wont let America bankrupt or the World. But, I say it is out of the hands of regulators due to the large scale. I don't think there's a way to control some things, like the wind. At best we can hope to get a piece of it sometimes i.e. sailing , windfarms, etc. But, in reality there is no way to truly harness and fully control it.
30% of Households economies (zero or negative networth) are so fragile just a slight shift can destroy their ability to fully participate or repay
True that few of those households own homes, however they pay rent somewhere to someone. Many times they are paying to someone that has debt. Therefore they are mortgage payers by "proxy" imo and still have a powerful and important position in the economy. ( a good read: https://www.fool.com/retirement/2017...-net-wort.aspx )
Here are some things related to ability to pay mortgages, rent withstand downturns unemployment, etc....
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maggot discount code TGR20
ok we'll come up with a solution by then makers....
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05-20-2019, 10:27 AM #7439
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05-20-2019, 10:36 AM #7440
Looks like 'Merkens could stand to save some money.
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05-20-2019, 10:43 AM #7441
I'm not sure what your point is here. I'm not saying rising rates wouldn't be a problem, just that we stand a better chance of them hitting zero than 8 in say the medium term future.
The Fed typically isn't raising rates in times of recession, they typically do the opposite to get money moving. Sure everyone could just stop lending despite that, but that is more a liquidity trap than a raised rate environment. Given this, and the fact that the Fed has already decided to hold rates steady in the short term, leads me to believe we won't hit 8, as we would need higher rates currently to even get there on a glide path prior to the next inevitable recession.Live Free or Die
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05-20-2019, 10:43 AM #7442Jacket Cobbler
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ski & ride jackets made in colorado
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05-20-2019, 10:46 AM #7443
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05-20-2019, 10:59 AM #7444
FWIW. We got married out of college with negative net worth and two new jobs. Bought a house 3 years later with 20% down at about 8% and a point or two by saving one salary for a year. CC, auto loan and student loan interest was all deductible so that helped a lot. TV was free too. If it was today we would be fkd. Banks are winning.
A few people feel the rain. Most people just get wet.
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05-20-2019, 12:31 PM #7445
The rules would change if rates rise too much. 100 year mortgages, deferred principal, higher tax deductions.
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05-20-2019, 12:41 PM #7446Jacket Cobbler
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i dont think we are in a recession now, if thats what you mean., i think the fed wants interest rates up and I think 8% is the historic average with 20% being an unlikely unreasonable high that was almost hit in past 47 years
8% could do a lot of damage to the way everyone is operating today especially in housingwww.freeridesystems.com
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maggot discount code TGR20
ok we'll come up with a solution by then makers....
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05-20-2019, 12:59 PM #7447
China growing at 6% has a ten year rate at 3.3. Germany , Oz, UK, Japan and others all have 10 year rates below their growth rate. USA 10y is right about equal to its growth rate.
I’m bullish US Treasury bonds. Only some structural or external catastrophe will cause a significant rate rise.
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05-20-2019, 01:02 PM #7448
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05-20-2019, 01:09 PM #7449
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05-20-2019, 01:14 PM #7450Jacket Cobbler
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I guess i just see lots of micro signs and am looking at macro data that seems to be somewhat foretelling of a broader scale issue(s). I don't have a background in economics or profess to be anything other than a small time perceptive business person and investor. The things I see don't lend themselves to long term smooth sailing and it frightens me to thing I could get hung out to dry or stuck with some of my investments longer than I want to keep them thus tying up capital. I need to keep my cash working for me, yet the opportunity to create a return gets riskier and riskier and there seem to be no safe harbors for more than a 1-2% return. Anything else looks somewhat like rolling the dice. I am (oops edit for typo) NOT interested in long term investing with my small capital warchest.
I watched the Berkshire shareholders meeting in its entirety and thought it was quite compelling when a guy from ny had a question that went like this (remember pretty much any question is within reason) went something like this:
Guy: You were quoted as saying if someone gave you a million dollars you could produce $500,000 profit in a year. Outline exactly how you would go about doing that.....
Buffet: Uhhh , uhha , (no real complete thought or sentence)... uhhh...real estate...urrrr..uhhh.....then with finality and frustration: Look that is not relevant, we deal with a lot bigger sums of transactions than a million dollars , you're question does not apply....
and yep they do
$115 billion in cash ready to buy a business, company , public equities whatever....www.freeridesystems.com
ski & ride jackets made in colorado
maggot discount code TGR20
ok we'll come up with a solution by then makers....
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