Inflation

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I Shrugged
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Re: Inflation

Post by I Shrugged » Tue Apr 13, 2021 8:24 am

Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.
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Re: Inflation

Post by ppnewbie » Tue Apr 13, 2021 10:47 am

I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.
To me Jay Powell’s words are losing credibility by the second. I have a tertiary connection to a member of the Fed board of governors. And I can tell you these people are elitist and clueless.

If you ever hear “Let them eat cake” find the nearest bunker and hide for a few years.
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Re: Inflation

Post by pugchief » Tue Apr 13, 2021 11:23 am

I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.
I think another real estate meltdown ala 2008 is inevitable, and coming soon.
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Re: Inflation

Post by stuper1 » Tue Apr 13, 2021 12:07 pm

I had to buy a tool at Lowes this morning. The guy who helped me find it was shaking his head, because OSB board that recently sold for $8 each just got marked up to $50 each. That's insane. The price of new homes must be skyrocketing, which will make the price of used homes do the same.
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Re: Inflation

Post by flyingpylon » Tue Apr 13, 2021 12:48 pm

pugchief wrote:
Tue Apr 13, 2021 11:23 am
I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.
I think another real estate meltdown ala 2008 is inevitable, and coming soon.
Just curious what you think will cause the meltdown... the underlying factors seem very different.
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I Shrugged
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Re: Inflation

Post by I Shrugged » Tue Apr 13, 2021 1:13 pm

It seems like a perfect storm.
Supply lag in new home construction after the 08 bust
Interest rates below the free or real market forces rates->People want to buy houses
Wild money creation and stock market record highs->people feel rich
Lockdowns->Working from home->People want to move

Bingo, OSB for $50 a sheet, and northwoods lake cottages for 2 mil.

I was going to buy some vaulted gold today, but my wife made me do some repairs. Damn youtube repair videos anyway.
Tomorrow for sure!
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GT
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Re: Inflation

Post by GT » Tue Apr 13, 2021 2:34 pm

ppnewbie wrote:
Thu Apr 01, 2021 12:19 am
I was out the other day and got a coffee, which I have not done in a few months because of COVID. I nearly had a mild shock when I learned the coffee cost $5.75!
Tell the Barista you only expected a 2.6% increase on the cup of coffee

https://www.msn.com/en-us/money/markets ... cid=msnews

"The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018.

The Fed predicted in March that inflation would average 2.4% in 2021, using its preferred PCE price measure. The rate of inflation would then drop back down to the central bank’s 2% target by 2022."
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Re: Inflation

Post by GT » Tue Apr 13, 2021 4:43 pm

I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.

It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022
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Re: Inflation

Post by doodle » Tue Apr 13, 2021 5:47 pm

GT wrote:
Tue Apr 13, 2021 4:43 pm
I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.

It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022
If you've watched any of the strong towns series on youtube that increased tax revenue might be necessary for all these far flung suburbs to stay on top of maintaining infrastructure....that is if the feds don't come in and pay for it all
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Re: Inflation

Post by vnatale » Tue Apr 13, 2021 6:41 pm

GT wrote:
Tue Apr 13, 2021 4:43 pm

I Shrugged wrote:
Tue Apr 13, 2021 8:24 am

Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.


It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022


Just checked with Zillow and here were my results:

LAST 30 DAY CHANGE
+$14,552 (+8.3 %)

I'm in the middle of the 2020 - 2021 fiscal year. My taxes are based upon the house's value as of January 1, 2020, which makes sense.

Therefore, 2021-2022 will be based upon January 1, 2021 valuation.

That means this increase will not be seen for another year (if it holds up). Plus if values drop one an always appeal the valuation.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Inflation

Post by ppnewbie » Tue Apr 13, 2021 6:54 pm

GT wrote:
Tue Apr 13, 2021 2:34 pm
ppnewbie wrote:
Thu Apr 01, 2021 12:19 am
I was out the other day and got a coffee, which I have not done in a few months because of COVID. I nearly had a mild shock when I learned the coffee cost $5.75!
Tell the Barista you only expected a 2.6% increase on the cup of coffee

https://www.msn.com/en-us/money/markets ... cid=msnews

"The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018.

The Fed predicted in March that inflation would average 2.4% in 2021, using its preferred PCE price measure. The rate of inflation would then drop back down to the central bank’s 2% target by 2022."
I'll just turn around and borrow $10 from the average Joe behind me and get an extra venti caramel frankenstein latte. Then I'll turn around and say "I default on my loan, I went to Harvard and work on Wall Street. This is what we do". As I leave, I will feel stressed because the clerk didn't give me a tip :)
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Re: Inflation

Post by GT » Wed Apr 14, 2021 9:15 am

vnatale wrote:
Tue Apr 13, 2021 6:41 pm
GT wrote:
Tue Apr 13, 2021 4:43 pm
I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.

It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022
Just checked with Zillow and here were my results:

LAST 30 DAY CHANGE
+$14,552 (+8.3 %)

I'm in the middle of the 2020 - 2021 fiscal year. My taxes are based upon the house's value as of January 1, 2020, which makes sense.

Therefore, 2021-2022 will be based upon January 1, 2021 valuation.

That means this increase will not be seen for another year (if it holds up). Plus if values drop one an always appeal the valuation.
You may find - like I did - that Januarys values had spiked up as well.

Good tip on appealing the valuation if home prices drop!
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Re: Inflation

Post by doodle » Thu Apr 15, 2021 10:14 am

Nudging this back on topic..great interview and great insights into QE and Fed impotence


https://youtu.be/14I1BdncYVo



Screenshot_20210415-091306.png
Screenshot_20210415-091306.png (253.18 KiB) Viewed 811 times
SomeDude
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Re: Inflation

Post by SomeDude » Fri Apr 16, 2021 6:15 am

GT wrote:
Tue Apr 13, 2021 4:43 pm
I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.

It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022
Exactly the same for me.....up $23k, 8.9%........in 30 days.

This sucks because i live in a little 2/1 in the burbs, but i need to move immediately to a 4/2. We just found out baby #2 is on the way and I'm working from home and need an office. This would have been $400k two years ago. Will be $600k now. 😒
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GT
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Re: Inflation

Post by GT » Fri Apr 16, 2021 8:07 am

SomeDude wrote:
Fri Apr 16, 2021 6:15 am
GT wrote:
Tue Apr 13, 2021 4:43 pm
I Shrugged wrote:
Tue Apr 13, 2021 8:24 am
Back to inflation...

Hearing from two friends in Toronto area. Houses are over 1 million, and bidding wars.
Lake cottages up north are way over 1 million, sometimes 2 million, and bidding wars.

I just think this can't end well.

It is crazy - I used Zillow, and according to their assessment, my home has gone up 23K in value in 30 days - that cant be right

I hope the city does not use the same software or my property tax will be going up for 2022
Exactly the same for me.....up $23k, 8.9%........in 30 days.

This sucks because i live in a little 2/1 in the burbs, but i need to move immediately to a 4/2. We just found out baby #2 is on the way and I'm working from home and need an office. This would have been $400k two years ago. Will be $600k now. 😒
Inflation or market bubble it's still a bitter pill - only win would be moving to a lower cost of living zip code or area nearby that has not spiked up in cost yet.

I have been using this site to search for future retirement landing spots - can compare city versus city cost of living - unemployment etc..
https://www.bestplaces.net/compare-cities/
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Re: Inflation

Post by jalanlong » Mon Apr 19, 2021 5:14 pm

I Shrugged wrote:
Tue Apr 13, 2021 1:13 pm
It seems like a perfect storm.
Supply lag in new home construction after the 08 bust
Interest rates below the free or real market forces rates->People want to buy houses
Wild money creation and stock market record highs->people feel rich
Lockdowns->Working from home->People want to move

Bingo, OSB for $50 a sheet, and northwoods lake cottages for 2 mil.

I was going to buy some vaulted gold today, but my wife made me do some repairs. Damn youtube repair videos anyway.
Tomorrow for sure!
From the financial pundits I have heard say a bubble in not in the housing cards, they indicate that the main difference between today and 08 is the creditworthiness of the people buying today. These are not people doing no-documentation loans who have stretched themselves wildly thin so a downturn in the economy will start a domino effect of foreclosures. Most of the buyers have high credit and are putting down large down payments.

https://awealthofcommonsense.com/2021/0 ... ng-bubble/
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Re: Inflation

Post by ppnewbie » Mon Apr 19, 2021 5:26 pm

jalanlong wrote:
Mon Apr 19, 2021 5:14 pm
I Shrugged wrote:
Tue Apr 13, 2021 1:13 pm
It seems like a perfect storm.
Supply lag in new home construction after the 08 bust
Interest rates below the free or real market forces rates->People want to buy houses
Wild money creation and stock market record highs->people feel rich
Lockdowns->Working from home->People want to move

Bingo, OSB for $50 a sheet, and northwoods lake cottages for 2 mil.

I was going to buy some vaulted gold today, but my wife made me do some repairs. Damn youtube repair videos anyway.
Tomorrow for sure!
From the financial pundits I have heard say a bubble in not in the housing cards, they indicate that the main difference between today and 08 is the creditworthiness of the people buying today. These are not people doing no-documentation loans who have stretched themselves wildly thin so a downturn in the economy will start a domino effect of foreclosures. Most of the buyers have high credit and are putting down large down payments.

https://awealthofcommonsense.com/2021/0 ... ng-bubble/
Personally, I think it is a bubble that is being inflated. And regardless of whether the debt holders are good for the money they seem to be paying a significant amount more for properties than just a year ago.
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Re: Inflation

Post by vnatale » Mon Apr 19, 2021 8:16 pm

The person who does my snow plowing also is a carpenter.

He told me that there is an enormous amount of work out there for contractors.

People have a lot of money to spend and some bookings for the work are a year out.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Inflation

Post by GT » Tue Apr 20, 2021 7:45 am

ppnewbie wrote:
Mon Apr 19, 2021 5:26 pm
jalanlong wrote:
Mon Apr 19, 2021 5:14 pm
I Shrugged wrote:
Tue Apr 13, 2021 1:13 pm
It seems like a perfect storm.
Supply lag in new home construction after the 08 bust
Interest rates below the free or real market forces rates->People want to buy houses
Wild money creation and stock market record highs->people feel rich
Lockdowns->Working from home->People want to move

Bingo, OSB for $50 a sheet, and northwoods lake cottages for 2 mil.

I was going to buy some vaulted gold today, but my wife made me do some repairs. Damn youtube repair videos anyway.
Tomorrow for sure!
From the financial pundits I have heard say a bubble in not in the housing cards, they indicate that the main difference between today and 08 is the creditworthiness of the people buying today. These are not people doing no-documentation loans who have stretched themselves wildly thin so a downturn in the economy will start a domino effect of foreclosures. Most of the buyers have high credit and are putting down large down payments.

https://awealthofcommonsense.com/2021/0 ... ng-bubble/
Personally, I think it is a bubble that is being inflated. And regardless of whether the debt holders are good for the money they seem to be paying a significant amount more for properties than just a year ago.
With loan rates this low - 3% or under - I can see folks bidding up property with the thinking "with rates this low the house is still within our budget" or "with rates this low we better act now before the rates go back up"

I remember back in the late 90's when a 30 year at 7.25% was a "good deal"
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Re: Inflation

Post by flyingpylon » Tue Apr 20, 2021 8:02 am

GT wrote:
Tue Apr 20, 2021 7:45 am
ppnewbie wrote:
Mon Apr 19, 2021 5:26 pm
jalanlong wrote:
Mon Apr 19, 2021 5:14 pm
I Shrugged wrote:
Tue Apr 13, 2021 1:13 pm
It seems like a perfect storm.
Supply lag in new home construction after the 08 bust
Interest rates below the free or real market forces rates->People want to buy houses
Wild money creation and stock market record highs->people feel rich
Lockdowns->Working from home->People want to move

Bingo, OSB for $50 a sheet, and northwoods lake cottages for 2 mil.

I was going to buy some vaulted gold today, but my wife made me do some repairs. Damn youtube repair videos anyway.
Tomorrow for sure!
From the financial pundits I have heard say a bubble in not in the housing cards, they indicate that the main difference between today and 08 is the creditworthiness of the people buying today. These are not people doing no-documentation loans who have stretched themselves wildly thin so a downturn in the economy will start a domino effect of foreclosures. Most of the buyers have high credit and are putting down large down payments.

https://awealthofcommonsense.com/2021/0 ... ng-bubble/
Personally, I think it is a bubble that is being inflated. And regardless of whether the debt holders are good for the money they seem to be paying a significant amount more for properties than just a year ago.
With loan rates this low - 3% or under - I can see folks bidding up property with the thinking "with rates this low the house is still within our budget" or "with rates this low we better act now before the rates go back up"

I remember back in the late 90's when a 30 year at 7.25% was a "good deal"
A lot of people are just paying cash.
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I Shrugged
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Re: Inflation

Post by I Shrugged » Tue Apr 20, 2021 8:38 am

Yeah but a lot of people are jumping on the rates too.
A $300K loan at 3% for 30 years has a payment of less than $1300.
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