[OkieSnuffBox]

Originally Posted by M_Six

That's why I traded in the Z4. It was fine when I was commuting to Champaign and back (110 miles r/t) every work day. The car got plenty of use. But once I got my job only 3 miles from home, the Z just sat there. I wasn't going to risk the paint job by parking in the school lots. And since Wifey worked at the same school, we weren't even using her car. It was silly having 3 cars when 2 of them just sat idle. So when my dealer offered me a really sweet deal on the C300 in trade for my X5 and Z4, I took it. I do miss the Z4 sometimes, though.

I totally get you. I've considered trading in our '18 Mazda 3 on a new Frontier or Tacoma. We love to be outdoors and camp so a mid-size truck would be nice, especially since we don't need to worry about MPG. Even before they closed my office, I only went in 3 days per week and round trip was 12 miles.

If we didn't have 3 dogs and a cat, we'd probably sell the house and buy a full-size truck and travel trailer and just travel around and work that way.

The craziness of the used car market means I'm finally about $10k in equity in the car........my '135i developed rod knock, but the mazda dealer didn't find it in their test drive of the car (was faint until upper RPMs) so I immediately traded it in on the 1 year old Mazda, but I got screwed on trade-in for the 135, but took it because I didn't want to risk it lunching the engine while I had it.

But I also suspect there is going to be a correction in the market soon, so I figured the less liability I have the better. At this point, the car and mortgage are the only debt we have.

[ToddBlack88]

Originally Posted by ToddBlack88

Here also.
My assessment for property taxes this year went up 430,000k

Ok, just an addition to this and how absolutely screwed, the younger generation is with regards to the real estate market here in Vancouver.

Two of my neighbours put there houses up for sale 10 days ago.

One was pretty 1980s inside, 2200 sq/ft, 65x125’ lot, and was on the market last summer for 1.7 million. It didn’t sell after 2 months and was pulled off the market. It was listed this time for the same amount(1.7 million) and sold in 6 days for 2.3 million.

The other was a very well maintained and beautifully upgraded home that was about 2300 sq/ft on a larger 65’x140’. It was listed for 2.08 million and sold in 8 days for………………2.7 million!

Wtf!

This is a middle class neighborhood! I cannot imagine what income one must have to afford to enter this market. For information, these houses were 24k new in 1967 when they were built.

My son has no chance of buying a home in his hometown without a miracle.

[MyZ4Coupe]

I can't understand how anyone in the middle class affords a 2.7 million dollar home??? Can anyone explain?

[premier3is]

Originally Posted by MyZ4Coupe

I can't understand how anyone in the middle class affords a 2.7 million dollar home??? Can anyone explain?

Survival of the fittest lol

[Ganzaz]

In my country capital the house pricing doubled in the last 7 years����

[Artemis]

Originally Posted by TrevorM3

yeah..this housing "bubble" will end soon. it has to. everyone is paying top dollar, and buying dog shit, to boot.

Originally Posted by OkieSnuffBox

But I also suspect there is going to be a correction in the market soon, so I figured the less liability I have the better.

Looks like it's only a matter of time for the party to end.

Jeremy Grantham (his background: here):

Also keep an eye on the yield spread:
https://journal.firsttuesday.us/usin...nd-recoveries/
https://journal.firsttuesday.us/current-market-rates/
https://fred.stlouisfed.org/series/T10Y2Y

September 2021:

(source: https://journal.firsttuesday.us/usin...nd-recoveries/)

In the above chart:

• The red line tracks the yield spread from January 1955 through September 2021.
• Shaded areas indicate periods of US recessions.
• The yield spread dips below zero (orange line) when the short-term rate rises above the long-term rate. This is the inversion point.
• +1.21 (green line) is the point for which the probability of recession begins, as assigned by Fed economists. Yield spreads smaller than 1.21% predict successively greater probabilities of recessions one year forward.

Each time since 1960 that the yield spread went negative (dipped below zero) we were in a recession approximately 12 months later.

Going into 2020, the likelihood of a decline in general business and real estate activities over the next 12 months was already high as the spread dipped below zero in 2019. However, the added pressure of the global pandemic and financial crash are pushing what was to be a normal recession into one of larger significance. Recent estimates don’t see the U.S. recovering from 2020’s economic conditions until 2030.

Conclusion: fasten your seatbelts.

[chassis]

Artemis the chart looks bullish to me. What is the reason to fasten seatbelts?

[Artemis]

Originally Posted by chassis

Artemis the chart looks bullish to me. What is the reason to fasten seatbelts?

The chart displayed stops in September 2021.

Ever since early October 2021, figures keep trending south to dip sub zero (looks like it's gonna happen within the forthcoming weeks or months: see chart below).

IMHO COVID-19 economic support measures helped absorbing - to some extent - the unfavorable existing (pre-2020) underlying economic situation, but it remains to be seen whether market interventions can manage to stop markets from overheating (check how prices for commodities and real estate keep soaring out of scope since some time). And then there is further uncertainty/nervosity generated by the evolving geopolitical situation.

IMHO a market correction is inevitable. And only in recessions or generally adverse economic conditions do you discover which companies are truly sound, robust to handle the situation (cf. only when the tide goes out do you discover who's been swimming naked).

Hence, I fasten my seatbelts.

That's my 2 cents. Time will tell and I truly hope to be wrong on this one.


(source: https://fred.stlouisfed.org/series/T10Y2Y)

[Lloyd A]

Yes as you said there is a huge rise in the real estate business nowadays

[Artemis]

Originally Posted by Lloyd A

Yes as you said there is a huge rise in the real estate business nowadays

"Froth": see https://www.investopedia.com/terms/f/froth.asp

"Bubble Theory": see https://www.investopedia.com/terms/b/bubble-theory.asp

This thread features many testimonials about recent real estate price levels have become questionable.

[chassis]

@Artemis are you buying or selling real estate now? Or are you not active in the real estate market?

[Artemis]

Originally Posted by chassis

@Artemis are you buying or selling real estate now? Or are you not active in the real estate market?

Very basic summary: "The Truth About Real Estate Prices":
https://www.investopedia.com/article...ate-market.asp

Everyone makes his personal choices, possibly guided by professional advisors. Some say that as the COVID-19 pandemic seems to progressively subside in 2022, we may as well be heading into "The Roaring Twenties", a period of economic prosperity (compare with a century ago). Others are more pessimistic about the fallout: long-term systemic macro-economic effects of the pandemic and pre-2020 underlying conditions (see for example here). Nobody has a crystal ball. All that exists as yard sticks: the past, discerned trends and the possibility of new events impacting the economic situation (for example geopolitical events).

FWIW, don't take my word as gospel - it's simply a mere personal view (so I could be completely wrong). I do not operate in the real estate business, prefer owning real estate to use it for myself (instead of dealing in real estate) and adopt a risk-averse approach (staying put).

I'm worried that if the market 'contracts' in the future, it's gonna hit home hard for many households with low or no disposable cash reserves, stuck with mortgages for recently purchased overvalued family houses.

To be distinguished from coin-flipper operations: buying now a house or a new car model with the sole purpose of a quick resell with a mark-up, surfing on the market frenzy with soaring prices, balancing between the wave and the wipeout (but with the difference that the coin-flipper cannot see how close he is to the wipeout). I'm not into that either.

[Kolyan2k]

Spoke to realtor today, he is buying.....

He just sold studio in shitty Boston neighborhood for $800k. I wouldn't live there for free lol

[UncleWede]

Father just passed, and I'm now in control of 11 rentals in CA/WY. I thought they were higher value, but my dad made the cheat-sheet for me about 6 months ago. Everything is free/clear. I just hope my brothers are smart enough to let us hold onto the property and don't want all the cash for hookers/blow.

[dscabra]

The market in my area has been insane! Here is what my home shows (according to Zillow). The average selling price in my neighborhood is ~$1.3M over the past several months with a couple of homes approaching $2M.



Unfortunately for those not planning to sell any time soon, this simply translates to ridiculous tax bills.

[Alfisti]

Here's my neighbourhood in the last yr, the fluctuation you see is because it is an old area with 2 bed knock downs and newly build 5 bedders so it hops about a bit.

Avg 10 years ago was $561K.

[zx10guy]

Originally Posted by dscabra

The market in my area has been insane! Here is what my home shows (according to Zillow). The average selling price in my neighborhood is ~$1.3M over the past several months with a couple of homes approaching $2M.

Attachment 2821212

Unfortunately for those not planning to sell any time soon, this simply translates to ridiculous tax bills.

Yep on the property taxes. But in my area, any increases are phased in over time. So you're not hit immediately with it. I think it's a 3 year phase in period. Can't remember.

[dscabra]

Originally Posted by zx10guy

Yep on the property taxes. But in my area, any increases are phased in over time. So you're not hit immediately with it. I think it's a 3 year phase in period. Can't remember.

Our cycle is two years. My last increase was 23% and it's likely I'll see another double-digit increase next cycle.

[RickFLM4]

Originally Posted by dscabra

Our cycle is two years. My last increase was 23% and it's likely I'll see another double-digit increase next cycle.

There's no homestead type law? Here in FL, annual increases in primary residence assessed values are capped (I think at 3%). My property taxes have increased by about $1,500 - $2,000 over 20 years.

[zx10guy]

Interesting discussion about how Wall Street/Institutional Investors are affecting the housing market. Would like the opinion of the brain trust here.

[dscabra]

Originally Posted by RickFLM4

There's no homestead type law? Here in FL, annual increases in primary residence assessed values are capped (I think at 3%). My property taxes have increased by about $1,500 - $2,000 over 20 years.

I wish! Here is what my property tax history looks like. Again, the assessments are completed every two years, so we get a reprieve from an annual increase, but get hit with some hefty increases in this crazy market.

[x3sm]

What exactly will crash the Real Estate market? I'm in the business and people are paying cash with offers of 50k over asking. The amount of equity people have right now is next level. The inventory is extremely short, like nothing we have ever seen before. Builders hands are tied, too much to go through to build a house nowadays and thus most of them build homes worth 500K (my area) and up, anything under is not worth it to them. Rates went from 2.5% to 3.75% overnight and buyers are still going strong and offering over asking all day long. Inflation hasn't even touched RE markets, it's just supply and demand right now. Owning property will be for the rich soon. All young people want to rent and Airbnb because they work from home and just travel. My advice is to buy 2-4 family units.