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an
Participant[quote=Coronita]
Well I definitely have Would-Be-Buyer-But-Backed-Out Remorse. I played it too safe. I believed it paying off my house, being completely free and clear and didn’t think rates could fall lower or prices could go up further. Wrong across the board. I should have done the cash out years ago, and bought then, not now. I think I’m going to sit it out…really brutal market right now. Home prices might have doubled wages certainly did not. Not good.[/quote]Housing price might went up 2x, but I don’t think monthly payment has gone up 2x. At the end of the day, for most people, monthly payment means a lot more than total housing price, since most people don’t pay cash for their house.Also, where will inflation go from here. IMHO, that’ll matter a lot more than anything else, especially if you buy today w/ a 30 years fixed mortgage and can afford the monthly payment today.
ParticipantRate of increase, not total increase.
We did see an increase in ~$3.5T between 2008-2014. Did we see similar craziness over those 6 years? I’ve been buying throughout those 6 years and did not see anything like what we’re seeing today.
ParticipantBetween August 2008 and December 2008, the Fed’s balance sheet increased ~2.5x. Between 9/2020 to today, they’ve increased the balance sheet by ~2.1X. Did we see similar craziness in 2008 for the high end? I know the low end were getting bought up for all cash back then, but price wasn’t skyrocketing like today, even w/ all cash offers. I got beat out by several all cash offers that were lower than my offer price.
ParticipantAlong similar line
Pandemic Sparks a Rebound in Residential Migration, Survey Finds
ParticipantPandemic Sparks a Rebound in Residential Migration, Survey Finds
Similar points here
Participant[quote=XBoxBoy]I’m not claiming any more weight or correlation to rates than inflation. I’m claiming that rates combined with inflation are the principle drivers of house price increases.
And I agree that wage inflation would be more appropriate than general inflation, and can see your point that low wage earners can probably be ignored. But I also doubt that there would be much difference in the charts. Maybe someone like Rich has wage inflation data we could use?[/quote]
The reason why I think you’re put more weight on the rate than inflation because you assume price increase because rate goes down. In the 70s, rates went up and price went up as well. Maybe, if you have data as far back as 1970, you can use the same chart to see if your hypothesis still apply in a rising rate scenario.Participant[quote=XBoxBoy]Overall, I think you’re missing what I’m saying in my post. While I initially set out to try and answer how much of recent price changes are due to issues like people moving from out of town versus interest rates, what I ended up showing is that over the last 34 years almost all the rise in home prices in San Diego can be attributed to interest rate changes and inflation. Because my charts show 34 years of data, only a very small part of the charts are specific to the current situation. And the part that is for the last year is for San Diego overall, not a specific area.
But the bigger take away for me is that if I am correct that home price increases are largely correlated to interest rates and inflation, that means a lot of the narratives told in the past about why home prices are going up were false. Which leads me to be rather skeptical of the narratives I’m hearing now.[/quote]
I understand what you’re trying to say. But I think you put more weight and correlation to rates than inflation. That’s what I’m trying to convey, is that wage inflation is probably a better correlation than rates.This is why I’m trying to convey about the top 20% income inflation. 20% is some random number I pull from the sky, but the point is that someone making minimum wage would not be buying houses. They’re renters.
ParticipantYou forget the key factor about RE (location, location, location). Not all area of RE increase at the same rate or decrease at the same rate. Also, not everyone’s salary increase at the same rate. Not everyone can afford/buy a home, so instead of looking at overall inflation, maybe you should look at wage inflation for the top 20%. Here’s an article about the migration pattern over the last year:
Pandemic Sparks a Rebound in Residential Migration, Survey Finds
Participant[quote=Rich Toscano][quote=an][quote=sdrealtor]Actually she’s #1 on the list!
https://ucsdguardian.org/2017/02/16/six-famous-uc-san-diego-alumni/%5B/quote%5D
OMG, loved the Guardian… sdr, that’s a satire news paper if you don’t already know. Kinda like UCSD’s version of the onion.[/quote]You’re thinking of the Koala… the Guardian is the real news publication.[/quote]
Oh oops, you’re right. It’s been too long… Are you a Triton Rich?Participant[quote=sdrealtor]Actually she’s #1 on the list!
https://ucsdguardian.org/2017/02/16/six-famous-uc-san-diego-alumni/%5B/quote%5D
OMG, loved the Guardian… sdr, that’s a satire news paper if you don’t already know. Kinda like UCSD’s version of the onion.Participant[quote=deadzone]Yes but inflation is way higher now than it has been so it is more of an issue now. And I actually care that they don’t get screwed. I already pointed out that my motivation is not that I am worried they will leave at this point.[/quote]
Engineer salary has been outpacing inflation for many years. If you haven’t been keeping them current with market all of this time, I’m confused why start now? It also much harder to bring them current with one big jump.Participant[quote=deadzone]I’m not really worried about my people leaving. I just want to protect them from getting screwed by an eroding salary due to my company being out of touch with inflation in San Diego.[/quote]
If they’ve been getting COLA of 2% for many years, then they’re well below market. If they haven’t left yet, then why even try now?Participant[quote=deadzone]Do you use Indeed and Linkedin to find candidates?[/quote]Yes when I was Head of Engineering at an early stage startup. But now, the recruiting team is responsible for that. But I do mobilize my LinkedIn network to point them to the job postings.
[quote=deadzone]Looking back at last year, my company provided less than 2% for COLA. I guess they got that number from some questionable government figures but we all know cost of living is rising way more quickly than that, especially in SD. With that small of COLA raise our salaries are going down in real terms big time.[/quote]
COLA is pointless in engineering IMHO. At least in my entire career experience. If you’re only giving COLA, the good one will leave.ParticipantThanks for sharing David J. I always find it ironic that they social justice people who yelled the loudest about inclusion and acceptance are sometime some of the most intollerant.
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