From Reuters:
U.S. home sales slump to 12-year low; glimmers of hope emerging
U.S. existing home sales plunged to a 12-year low in December, but declining mortgage rates raised cautious optimism that the embattled housing market could be close to finding a floor.
The report from the National Association of Realtors on Friday also showed the median house price increasing at the slowest pace since early in the COVID-19 pandemic as sellers in some parts of the country resorted to offering discounts.
The Federal Reserve’s fastest interest rate-hiking cycle since the 1980s has pushed housing into recession.
“Existing home sales are somewhat lagging,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “The decline in mortgage rates could help undergird housing activity in the months ahead.”
Existing home sales, which are counted when a contract is closed, fell 1.5% to a seasonally adjusted annual rate of 4.02 million units last month, the lowest level since November 2010. That marked the 11th straight monthly decline in sales, the longest such stretch since 1999.
Sales dropped in the Northeast, South and Midwest. They were unchanged in the West. Economists polled by Reuters had forecast home sales falling to a rate of 3.96 million units. December’s data likely reflected contracts signed some two months earlier.
Home resales, which account for a big chunk of U.S. housing sales, tumbled 34.0% on a year-on-year basis in December. They fell 17.8% to 5.03 million units in 2022, the lowest annual total since 2014 and the sharpest annual decline since 2008.
1st for the second time
I think the government is going to get involved and start offering sellers $$ to incentivize them to sell their homes. Similar to the first-time homebuyer $8k back in the day but for the seller. How things have changed since then. Inventory will continue to be very low w/ homeowners not wanting to move w/ their locked in dirt cheap rates. I feel bad for buyers that really want a home. They would love to buy but there is nothing in their price range. Ones on the fence wish they bought several years ago and will never see rates that low again.
Bitcoin hit a high of 23,400. So much for buying a whole coin. Wanted to at 16k range, but so much for that.
Dave,
It’s frozen….sales are in trouble.
Pumps why does it matter if you pay 1.60
Or 1.50 or 1.40 for DNA? If you believe in the company, those Pennies are insignificant. Sounds like you are scared and just talking to get attention again.
The same with Bitcoin, always talking these things up but you never buy into them. I really think you lack something that you constantly crave attention.
Sales are going to be very low because there is barely any inventory, but there are a ton of buyers still on the sidelines waiting. Still multiple offers over asking (not like it was), and there are no longer waiving of inspections or appraisals. Look at any town and majority are around 75% less inventory than they were two years ago. Buyer count is still there, not the sellers. Going to be a problem for a while. Great for homeowners, bad for buyers. Fyi – I am only talking about NJ too.
Fin,
I was extremely bearish up until last week. I now believe we might have a short term bull run before the final flush that maybe comes end of this year, next year, or doesn’t come.
You are correct, it’s time to build the position in DNA at these levels. That’s why I have been mentioning it, but haven’t pulled the trigger. It ran back up to 2 and I have patiently waited for it to come back down which it now has. Will post when I buy on Monday.
I was calling this situation for years on this blog. Huge coming demographers bloc of buyers. Now with the Fed raising the rates, they exasperated the problem and are destroying the real estate market. Businesses that depend on sales can’t survive forever. Once you f’k that up, going to take a long time to fix.
Daveman0720 says:
January 21, 2023 at 8:43 am
Sales are going to be very low because there is barely any inventory, but there are a ton of buyers still on the sidelines waiting. Still multiple offers over asking (not like it was), and there are no longer waiving of inspections or appraisals. Look at any town and majority are around 75% less inventory than they were two years ago. Buyer count is still there, not the sellers. Going to be a problem for a while. Great for homeowners, bad for buyers. Fyi – I am only talking about NJ too.
Every time I worked with CSN they made a point of thanking me for their meal of which I always thanked them right back for their music. RIP Croz.
“I think the government is going to get involved and start offering sellers $$ to incentivize them to sell their homes.”
Would make perfect sense under government logic…’we fucked everything up by interfering in the free market, so let’s fix it by interfering in the free market…’
Chi, yeah, lol….I hate to say it but rankings and RPI notwithstanding I just don’t think the ECAC is that strong this year…in other words Quinnipiac was never as good as posted…you want a statistical representation of that from a datahead look at the QWB (quality win bonus) in the Pairwise…it attempts to adjust further for strength of schedule but you will note some schools are drastically below others, ie. they play very low quality teams through the season…not their fault, schedules are dictated mostly by division, but it is what it is…I’ll revel in the Red win, but I’m not sure any of these schools will be in the Frozen Four…Big Ten is the division to watch for me, if they don’t kill each other before the post-season…
Will be a fun final few weeks of the season in any case, those last four playoff spots are wide open among a bunch of teams…each win or loss matters…
Just looking at ECAC. Princeton is right here for the letdown. At least it isn’t at Baker.
Colgate is hanging around. If they go to Allston and pull it out, even tie, then they are cooking with gas.
I think you are underselling the Red. They are maturing as the season goes. They shit the bed out the gate, but have hit stride. They also have a hot goalie. It seems to be a tradition.
When I was there it was Corrie D’Alessio.
I graded his accounting exams. My brush with fame.
One negative is the bullshit February slate. It could stall momentum.
Funny you mention Feb, looking more closely at the whole NCAA standings I thought the same thing…bad run to go into post-season, will (should) pad the stats but it will make us sloppy, not focused…
Same thought on Princeton tonight as well, was going to type it but didn’t want to be a total debbie-downer lol.
Hey, if we can make the field without having to backdoor it through a conference championship then it’s only three wins to the finals…not only do we have the ‘any team, any day’ at our backs but ATEOTD these are kids, anything can happen…
Just noticed that Princeton was shutout last night 5-0 at Colgate…yeah, not feeling good about tonight…Lynah Faithful better be there in spades….Princeton going to come out hard, character game for our boys.
U.S. existing home sales plunged to a 12-year low in December, but declining mortgage rates raised cautious optimism that the embattled housing market could be close to finding a floor.
The report from the National Association of Realtors on Friday also showed the median house price increasing at the slowest pace since early in the COVID-19 pandemic as sellers in some parts of the country resorted to offering discounts.
But it’s still increasing… and it’s still about price… and within a 40 mile radius of NYC, 450K will get you dogshit. It used to 35oK but that changed practically overnight. It’s funny, it takes forever for inflation and ancillary movements for housing to “become” a reasonable purchase yet it increased 30% to 40% in a few years. Fat fucking Mary will suffer a coronary before she gives up the new price. So, get used to it; $4,000 per month for a nice “home” is your floor so pay up muppets, or go west of Frackville, PA to hopefully find a bargain.
Do keep in mind when inflation is running between 5 and 9% for two years, that 500K home goes up to 575K regardless. So downward pressure really has to be great just to beat out high inflation. If house prices are staying the same and everything else is going up 5-9% year over year, house prices are actually dropping. It just won’t be advertised that way.
Tightening for thee but not for me, as usual
Microsoft under fire for hosting private Sting concert for its execs in Davos the night before announcing mass layoffs
Is it safe?
https://yhoo.it/3IZJKfE
https://youtu.be/avNraWT8CSI
The West….:)
Fast/ Lib: Got to pay that monthly nut , 6 percent vs three plus property taxes, and two incomes to do it. One gets laid off, and it’s a huge problem. 30 years ago. What a huge burden for these young people to carry for 30 years , to be close to NYC , not as needed with WFH/ hybrid, and it’s only going to grow. I was in Wall Street area yesterday , and like last time late last year, the smell of pot everywhere, toms of empty stores in the WTC mall and Brookfield Place , and it was empty, of course being Friday I would expect that, but last time I was there mid week, it was the same thing. And it’s getting even dirtier.
If house prices are staying the same
They’re still rising, albeit at a trickle but certainly not retreating. Add food, fuel, the kids activities, boiler repair, your bill from that CAT scan, etc. and house prices need to drop nominally in order to have a chance. Oh, don’t forget the $1,000 car payment. I really don’t know how people are surviving.
3b,
NYC turned into a liberal’s sanctuary paradise. The left sold the muppets the compassion bullshit in exchange for votes and are now wallowing in their sewerage of dismay. Raise taxes even higher to backfill the void and the exodus continues, creating a higher level of financial and s0cial insolvency.
Yet granny has all day to sit at the slots and put her Social Security in bling bling machines for 10 hours a day with free drinks. Then complains her check isn’t big enough to feed her and her cat.
They’re still rising, albeit at a trickle but certainly not retreating. Add food, fuel, the kids activities, boiler repair, your bill from that CAT scan, etc. and house prices need to drop nominally in order to have a chance. Oh, don’t forget the $1,000 car payment. I really don’t know how people are surviving.
U don’t really think they care do you?
Actions speak louder than words.
Microsoft under fire for hosting private Sting concert for its execs in Davos the night before announcing mass layoffs
Phoenix,
Granny has her dead husband’s medical insurance coverage that was grandfathered in plus the stock dividends from dead husbands stock purchases in the mid 1960s plus a SS check plus the mortgage free house the kids will sell and fight over when granny pulls her last bling bling lever. Pay up, millennial muppets!!
What’s the big deal? I thought the whole point of being in Davos was an annual competition to see who is the biggest hypocrite.
Some housing news here…
Flipper bought a house near me on 11/8/2022 for $550,000 and it is now listed this week for $824,900 $415/sqft
Updates are just ok, all white siding, reddish roof, windows white as well with red shutters, and sanded floors & stained dark, painted all white inside, new kitchen etc white cabinets, white counter tops, white floor, baths updated all white, however as the house is the fugly split level design of our neighborhood, and has no real landscaping is on a huge hill cannot do much with it. House will go up $5000 a year in taxes next year if it sells for that price.
Also another open house today on busy corner lot. All kids grown and out they put in a new walkway and driveway but that is about it, corner house 1 floor only with finished basement and bedrooms down there, no back yard to speak of. I cannot see it going for anywhere near $800k..We shall see…..
Don’t forget her second husbands police pension and half of the house she got in that divorce.
Granny has her dead husband’s medical insurance coverage that was grandfathered in plus the stock dividends from dead husbands stock purchases in the mid 1960s plus a SS check plus the mortgage free house the kids will sell and fight over when granny pulls her last bling bling lever. Pay up, millennial muppets!!
re: Davos what do you get for a quarter of a million dollars for a ticket anyway? Are the hookers included?
Didn’t their dear leader and founder german Klaus Schwab give Putin WEF recognition even after they annexed parts of Ukraine 8 years ago?
I wonder if he lead off with If You Love Somebody Set Them Free
Phoenix says:
January 21, 2023 at 11:51 am
U don’t really think they care do you?
Actions speak louder than words.
Microsoft under fire for hosting private Sting concert for its execs in Davos the night before announcing mass layoffs
no, they were bragging about their covid precautions, they started off with “Don’t Stand So Close to Me.”
Buzz Aldrin Gets Married to Anca Faur on His 93rd Birthday: We’re ‘as Excited as Eloping Teens’
https://www.yahoo.com/entertainment/buzz-aldrin-gets-married-anca-135414903.html
I wonder if their wedding song was “Fly Me to the Moon.”
lol, Elizabeth Holmes tried to escape by purchasing a 1 way ticket to Mexico. Not the sharpest tool in the shed I guess. Shoulda just walked over the border or gone by car.
Juice.Not a fan of all the all white style now; I believe it’s called farm house. I see a few of those sitting on the market, 1,000,000. 00 plus! And, they are on busy streets like Howland and Spring Valley.
Fast: I never thought NYC would go into decline again, but it is. The pot haze/smell is unbelievable. Who is getting high at 10:00 A. M.? It’s a whole negative vibe all around. I am glad I only have to go in occasionally, and it is my least productive day of the week. I don’t know anyone, young or old that wants to go back to the office , unless they are required.
Ricky: https://youtu.be/W2nGXfh2wU0
A Morgan Stanley banker is suing his estranged wife for $7milliom, claiming she forced him out of his job by harassing him with abusive emails that his bosses had access to, falsely accusing him of sleeping with prostitutes and contracting STDs as a result.
Jean-Charles Beriau, 47, and his estranged orthodontist wife, Thea Shive, 65, are in the midst of a bitter divorce battle in Long Island.
He claims that after their marriage started to break down in 2018, she bombarded him with emails while he was in his old job at Merrill Lynch, falsely accusing him of sleeping with prostitutes.
She also allegedly contacted his new clients and told them he was being investigated for securities fraud.
Light Saturday reading pleasure while NFL games play in the background…
https://ironsidesmacro.substack.com/p/dont-fight-the-2s
Good analytics from this group generally.
One more while you wait for the Eagles to gouge the eyes out of the Giants.
https://finance.yahoo.com/news/stock-market-flipped-upside-down-155256976.html
Ultimately, I will let TA determine my next move. I really want to see some earning besides the banks though.
Another step on the decline of civilization. There is a new reality TV series called MILF Manor. It’s 40 and 50 something MILF’’s and the dating pool is their own sons! Disturbing, but what do I know.
Doing some research on long dated munis issued from 2o18 through 21, real long dated paper 30 to 45 years, with 2/ 3 handles. They have been getting absolutely crushed in the secondary market. The party is over in that sector.
“The $32 billion iShares 20+ Year Treasury Bond exchange-traded fund (ticker TLT) has climbed 6.7% in 2023 as investors seek safety in long-dated government securities, versus a 3.5% rise for the $365 billion SPDR S&P 500 ETF Trust (SPY). That sets TLT up for a third straight month of outperformance relative to SPY, the longest winning streak since 2020.
The long-dated bond ETF just logged a 50-day advance that topped 12.5% — something that in the past has occurred only when a recession is close at hand or fears over one are high, according to Nicholas Colas, co-founder of DataTrek Research. Over the past two decades, such a surge has happened in 2008-9 and also in 2020 when downturns were around the corner; it happened from 2010-2012, in 2015 and in 2019 when investors fretted over one, he found.”
“There is a new reality TV series called MILF Manor. ”
Life imitates art.
https://www.youtube.com/watch?v=YqJNgAP2QnU
Ruh roh, Raggy.
BREAKING NEWS
T.J. Kirkpatrick for The New York Times
Investigators Seize More Classified Documents From Biden’s Home
A team from the Department of Justice conducted a 13-hour search of the president’s Wilmington residence on Friday.
4th wave feminism. Ride the wave.
It’s 40 and 50 something MILF’’s and the dating pool is their own sons! Disturbing, but what do I know.
Left: pairwise motherfucker
LOL, tenth baby! Harvard lost to Brown…!
That cost them two slots, ouch.
How painful is this Giants game?
Whatever. Philly will always be an abused, red-headed, unwanted, piece of shit city.
New Yaaaawk l…..llllosers
Swallow sperm Eddie . Guzzzzzzle
Swallow sperm Eddie . Guzzzzzzle.
ewwwwww.
A message from the West Camden football fans:
https://tinyurl.com/4b56vt9h
I was at Wayne Hills High School most of the day for a physics competition w/ my students. Wish I had more time. Maybe I coulda taken some photos of the beautiful houses in the area. But right behind the high school, there was a road called “Pancake Hollow Drive”. Wayne and pancakes? Gotta be screaming value!
Left: QPac lost to Colgate last night.
I guess in addition to Allston, 2/10 & 2/11 has some relevance. But the win against Princeton means that the bye is likely. Now it is really a matter of 2, 3, 4 in the ECAC, which doesn’t really do much.
It is really just avoiding silly losses at this point. The heavy lifting is done for NCAA. A surprise really.
chi…saw that…illustrates what I said before the games that the ECAC is not as relatively strong as usual and therefore QPac and others a bit overrated?
Anyway, I feel better after last night and yes BU goes a long way for us…but, while we are looking good don’t pop the champagne yet….NCAA tourney is all about PCWs in the Pairwise and since we face some seriously weak teams there is limited ability for us to move up or possibly even hold our rank….example, last night’s win only got us 0.0038; a ‘quality’ win (or bad loss) can net a team 0.0075-0.0100 or more. (The losses last night against equally bad teams cost Harvard 0.0094 and QPac 0.0116).
Pairwise PCW calculation is funky, pull up the Pairwise grid and look at the Cornell/Harvard box…all else being equal Dartmouth is actually very important for us relative to Harvard as it is our last remaining common opponent…if we don’t match Harvard’s performance against Dartmouth (eg, they win, we tie; they tie, we lose) Harvard surpasses us again in the rankings solely on the basis of our relative performances against a bottom dwelling team….
Bottom line, unsurprisingly, just win. Especially now, as shitty losses has the potential to absolutely crush anyone’s Pairwise standing….
LOL, Harvard obviously not BU….no coffee yet lol
You guys are all ghey as hell.
Good Morning America.
Wake up to:
Mass shooting in Monterey Park.
A hat tip to all my colleagues out west who, unlike some others, didn’t get to sleep in a warm bed last night, and don’t get to work from home.
The string for the light is right over your head.
Ex says:
January 22, 2023 at 11:13 am
You guys are all ghey as hell.
Yet the answer is that, far from being expelled from the House of Representatives, Santos, 34, was rewarded with assignments on two of its committees. The vote of confidence appeared to be an expedient calculation by the House speaker, Kevin McCarthy, aware Republicans have such a slim majority that even losing one seat would make it much harder to pass legislation.
But it was also a decision, critics said, that showed the party of Abraham Lincoln and Dwight Eisenhower has lost its moral compass. Stuart Stevens, a political consultant and author of It Was All a Lie: How the Republican Party Became Donald Trump, said: “Santos is a perfect example of the collapse of the Republican party.
“It shows that the party stands for nothing. It seems like a million years ago but there was a time when we said character was destiny. Nobody even knows who this guy is. We literally don’t know his real name.”
Found “Phoenix”:
https://imgur.com/gallery/ll06p7V
All this discussion of McCarthy/the Republicans tossing Santos has me scratching my head…
Yeah, the guy is a joke, liar, likely sociopath…all stipulated.
But do we really want ONE person in DC to overrule the will of how many tens of thousands of voters who actually elected the person as their representative?
One may argue that the voters were duped and regret their choice…first, that circumstance if true doesn’t change the question. And secondly, that circumstance in my opinion would make removal even worse, ie. any time that ONE person in DC deems that voters he does not represent were ‘duped’ there is precedent for him to remove a duly elected member of Congress? Wow…
Everyone here seems to agree ‘both Parties suck’, that ‘they are all feckers’, etc, etc. So with that backdrop the desired solution regarding Santos is to….concentrate even more power in the Parties in DC providing a few select Party officials the ability to project power over voters’ in Districts in which they have never stepped foot and whom they do not represent?
Jesus, how less democratic and more authoritarian can we become?
Guy’s a freak for sure, but the ‘cure’ proposed is much worse than the disease…..
So, the weaponized DOJ and FBI got the vegetable elected, the White House Chief of Staff (and other staff members) are resigning, this is the first time investigations are occurring on a president and his son, money is being laundered through shell organizations by a foreign enemy and possible violations of the espionage act are being considered.
Any questions?
12:15 representatives should be vetted. Who is to say this loser isn’t a felon?
An unknown person of unknown origin is a nasty security threat.
12:36 still not the revolving door of staff departures the previous imbecile employed.
Short memory??? Not to mention Russian money laundering.
You hollow criticism reeks of stupidity. Per the usual. Hey informed asshole.
Then ask yourself questions you vapid cunt.
if we are going to start prosecuting politicians for outright lying, we are going to have to build bigger jails.
Santos is the perfect candidate for either party. As we all focus on all of the lies and crap he pulled to get elected, we ignore all of the lies and craps all of the other elected representatives continue to pull as they supposedly serve us.
It appears to me that although the two major parties have differences when it comes to their social policies, their methods used to enrich themselves and the corruption they commit are identical.
1:03 let’s charge some people that break the laws.
Says the man who murdered Versace
Ex says:
January 22, 2023 at 11:13 am
You guys are all ghey as hell.
“1:03 let’s charge some people that break the laws.”
How about we start with Pelosi for insider trading. She can go to prison with Mitch who failed to live up to his constitutional duty to give Merrick Garland a hearing, and then proved himself a complete hypocrite by reversing himself and pushing the nomination of Amy Coney Barrett.
Of course, we would have to imprison many of the SCOTUS judges. They too clearly lied about how they would use their powers when it came to abortion. The truth is, whether it be the known repeat offenders like Menendez or the ones you thought were squeaky clean, like Mikey Sherrill, who took millions from Bloomberg for his endorsement, even though he was “unwoke.” You will not find a non-offender among a single one of them.
They all belong in prison.
1:37 😮
2:06 do it! You prolly won’t get them scotus peeps.
But Nancy is fair game.
“12:15 representatives should be vetted.”
Agree. Vetted by whom and for what are the real questions…
Isn’t that why we have (had?) an independent 4th estate….?
Perhaps the Dems would decide Fetterman wasn’t appropriately ‘vetted’ in hindsight if they don’t his actions…
Don’t open doors to rooms you don’t want to walk into…
There’s a good article, no time to track down, but 90% certain it was NYT recently that explains how the obvious issues with Santos slipped through along a timeline of events that’s worth a read…
Basically under the old election districts there was no way any Repub was going to be competitive so when Santos ran – twice I believe – the Repubs didn’t pay him any mind nor give him any money, chance of winning, etc. Basically ignored him. Dems with a locked seat, likewise, there was a quote in the article of some Dem operative declining at the time to drop only a few grand on opposition research as not worth the time nor money. When the Dems overly gerrymandered NYS and lost in court challenge, the court rewrote the districting lines (how you ended up with Maloney vs. Nadler in Manhattan) and suddenly the Repub Santos that no one was paying any attention to was running for a competitive seat. Too late.
Left: Why run as a Republican? I don’t think Santis is either a Dem or Repub whatever they are today. I think he is a psychopath. I understand he was elected, and there is no mechanism to legally remove him, but if I were the Republicans I would simply shun him; he is an embarrassment.
If any of us lied about even Ed background, you would be unemployed. I had to provide transcripts when I got converted to perm at last IB as their verification service could not find it. It is nuts that Congress does not have to provide same verification
“…if I were the Republicans I would simply shun him; he is an embarrassment.”
Won’t disagree with that. But to paraphrase BRT, if Congress is going to start shunning embarrassments there are going to be a lot of lonely Congressmen eating alone in the Members dining room…
“If any of us lied about even Ed background, you would be unemployed.”
You’re certainly not just becoming aware that *our* lawmakers are of a different caste than we mere mortals?
2:56 No. journalism as we “know” it is shite today.
No, we need basic corporate controls. Standards that say this happens you are done.
Lie? You are out.
“…we need basic corporate controls. Standards that say this happens you are done…”
Thirty plus years ago when I started in finance all my personal accounts had to be at my employer, a division in a separate reporting vertical monitored them, I was not allowed to trade anything in my sector, any company with which anyone in our firm was even meeting with was blacklisted for investment, options trading was prohibited, and I had a minimum holding period of 90 days for any shares (ie, no short term trading).
The 1980s.
But I was just a criminal junior bankster, privy to nothing.
Not a lifelong Congresswoman like Nancy….today.
Not to mention Russian money laundering.
Oh, you mean the obstruction canard that was a scam and a dog from the start? Don’t shoot the messenger. Just because your side is selling influence and information doesn’t mean you can deflect. The make believe world of the left is for sale and their toadies and trucklers will suck anyone to advance the cause. By the way, how’s that January 6th investigation going? LOLOLOLOL!!
5:13 not sure what you find funny. Jan. 6 concluded.
You’ve got lots of jail terms handed out. But laff it up.
Trump’s struggling to get anyone to support him.
ore than 840 people have been arrested for storming the U.S. Capitol building on Jan. 6, 2021, with charges ranging from obstruction of an official proceeding to assault. But 17 months after the attempted insurrection, a significant number of rioters are still awaiting their sentencing.
Only around a quarter of those arrested—185 individuals—have received criminal sentences, while the rest are waiting for their trials or haven’t yet reached plea agreements. According to the U.S. Attorney’s Office for the District of Columbia, 80 defendants were sentenced to periods of incarceration, with longer prison terms for those who engaged in violence or threats. So far, the median prison sentence for the Jan. 6 rioters is 45 days. An additional 57 rioters have been sentenced to periods of home detention, while most sentences have included fines, community service and probation for low-level offenses like illegally parading or demonstrating in the Capitol, which is a misdemeanor.
More: https://time.com/6133336/jan-6-capitol-riot-arrests-sentences/
“….LOLOLOLOL!….!”
I get it, that’s the retard laugh. The one truly stupid people
use unwittingly. They just cant help it.
Cautious Optimism
Recently, I’ve been getting more optimistic.
I’m not sure whether the optimism is coming from the hope that usually arises from a new year, the bond market looking past the Fed, the stock market looking past disappointing earnings, or the relief I feel from taking things easier.
Whatever the case may be, whenever I start feeling optimistic, I also get worried I must be missing something.
As a result, I wrote this new post, Economic Devastation Might Be Exactly What We Need To Win. The post is actually an extremely optimistic take on what to do if the economy goes down the tubes.
If you read the post, I think you’ll come away feeling much better. And no, I’m not worried about the debt ceiling debacle. Our politicians will come to a compromise after a lot of grandstanding.
But wouldn’t it be nice if the federal government spent within its means like all of us? Unlike us, the government can always just raise the debt limit and print more money.
Green Shoots In Real Estate
Mortgage rates have recently dropped from ~7% to 6% for the average 30-year fixed-rate mortgage. 6% is still high compared to where rates were in 2021, but look at how the MBA Purchase Index surged higher as a result.
If mortgage rates continue to decline, which I expect they will this year, demand for real estate will continue to rebound.
The question now is whether supply will flood the market after the Super Bowl, or if it will remain depressed. As of now, there’s still not much inventory on the market.
If you want to see golden handcuffs, check out the ones worn by homeowners who locked in mortgage rates below 3%. I’m not sure who is willing to sell at a discount with such an affordable mortgage rate. I’m not.
That said, I still expect the national median home price to decline by ~8% in 2023. The steam needs to be let out after such strong price growth since 2020. In some cities, we’ve already seen such a fall.
Foreigners Are Coming
The one positive for real estate investors nobody is talking about is the wave of foreign money looking to buy up U.S. real estate. The pandemic helped throttle foreign demand for U.S. real estate for almost three years.
But now that global economies are opening up, I expect over $230 billion in foreign pent-up demand for U.S. real estate to hit our shores over the next several years.
The demand from foreigners should help cushion the decline in real estate prices. I still think summer will be the ideal time to get some deals before the real estate market rebounds in the second half.
However, I’ll be carefully monitoring the real estate market before then and let you know what I observe. If mortgage rates drop another 0.5% – 1% this spring, the frenzy will likely return.
After closing out 2022, we are seeing some better pricing from some Fundrise funds. Fundrise has roughly 18% of its assets under management in cash, and is currently searching for bargains.
“The Angst Of The Striving Upper Class”
Finally, several readers let me know one of my classic posts, Scraping By On $500,000 A Year, got highlighted by the New York Times. The NYT piece is behind a paywall and talks about the “angst of the striving upper class.”
Given the highlight, I decided to update the post to better reflect our current environment. Thanks to inflation, life for many such couples making $500,000 hasn’t gotten better. Income tax rates haven’t gone up yet, but they likely will.
The only way life gets better is if you can work from home and/or relocate to a lower-cost area of the country while making the same high income. Putting in 50-70 hours a week is no fun, especially if you have to pay over $150,000 in taxes for the privilege.
Nobody is crying for households making half a million dollars a year or more. I’m just pointing out how quickly $500,000 can go for a family living in an expensive city. It’s interesting to see how the mass media and Netflix shows like The White Lotus are slowly covering more of this “angst.”
Life really isn’t that much better making $500,000 than it is making $250,000. But if you can make $200,000 a year in passive income, I’d prefer that over making $500,000 a year in active income any day. How about you?
The Week Ahead
We’re squarely into earnings season now. Tesla, Microsoft, Visa, Mastercard, Baker Hughes, Chevron, ASML Holding, Lam Research, Intel and many more are reporting this week.
The test is whether the stock market looks past poor earnings, or sells off, as the DJIA did after Goldman Sachs reported disappointing results last week.
Strong earnings and margin expansion didn’t matter much in 2022 when the Fed was aggressively raising rates. Therefore, the hope is that weak earnings and margin contraction don’t matter much in 2023 either!
The irrelevance of fundamental performance is one of the reasons you may want to enjoy life more in 2023. I certainly plan to!
Just remember…all the hot shot wall st guys want fundamentals to matter due to ego.
George Santos is literally the embodiment of what happens when you make excuses for your own politicians about their misdeeds by saying “well, it’s not against the law”. The standard for politicians should be both lawful and moral.
“…80 defendants were sentenced to periods of incarceration…the median prison sentence…is 45 days. An additional 57 rioters have been sentenced to periods of home detention, while most sentences have included fines, community service and probation for low-level offenses like illegally parading or demonstrating in the Capitol, which is a misdemeanor. [emphasis mine]
Oh, the HORROR! The HUMANITY!
Seriously? 45 days detention? Illegal parading? LOL.
And that is trial by jury in a jurisdiction where 92% – not a typo – of the voters pulled the lever for the Democrats.
If you consider 45 days and an illegal parade a win under those circumstances….I just don’t know what to say.
If McConnell were arrested for jaywalking and tried he’d get more than 45 days by a DC jury LOL.
Futes open flat.
Lib is re-running his charting…
https://imgur.com/a/MSEpV6G
Documents found in a 5th location… or is it the 6th location? Regardless, they’re scattered everywhere; pilfered, lifted, stolen through nefarious activity by an administration unauthorized to possess them. Who knows how many pictures were taken by foreign operatives? Who knows what kind of coverup is going on? And what are they covering up?
“Seriously? 45 days detention? ”
I bet 45 days seems pretty significant to a guy who might have a wife, kids, and a 9-5 job!
What’s your employer’s policy re granting time off to do jail time?