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June 17, 2022 at 6:32 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826163
CoronitaParticipantI don’t think we would be in this situation if it wasn’t for the pressure on energy costs from a ukraine war and also the constraints from a supply chain.
The supply chain would have worked itself out once the covid got better and things started reopening overseas again.
The ukraine war thing, however, is the big unknown. It’s going to be a long drawn out war, and energy prices will stay high in the meantime until those that demand it find alternatives.
Energy prices have a big influence on costs of goods and services, just from transportation alone, so does supply chain issues.
Example…Domestically produced rice is currently selling for a lot less than rice imported from Asia. Go to any asian supermarket to confirm. it’s about $10-15/bag difference if you want Thai imported rice versus stuff grown here such as Calrose.
There’s many examples of this where right now imports cost near the same or more than domestically produced or North American producted goods and services… That also makes a case for bringing work back here.
June 16, 2022 at 8:18 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826151CoronitaParticipant[quote=The-Shoveler]IMO Going from mortgages in the 2’s to mortgages in the 6’s is going to do some economic damage.
IMO I guess we will see if my theory that TPTB will not allow a recession longer than a few months is correct.[/quote]
I would agree with that. I think we’ll see a slowdown for sure.
Can’t wait… More rentals and cashflow possible…I’m hoping that there will be enough correction that if my kid goes to an out of state college, housing wherever my kid goes to will be much cheaper than now.
3% cash out refinance now looks pretty sweet lol…
That said, I don’t think it fixes the supply chain issues.
I think credit card companies are going to have a field day.
June 13, 2022 at 10:19 PM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826129CoronitaParticipantSorry, was away Sunday and today helping out the robotics team and fixing a 3D printer and painting a miata. What did I miss? Did we solve world peace yet?
It’s really annoying we have a supply chain parts shortage from china in just about everything, because a lot of things that would have been easy to find, much cheaper to do isn’t so anymore…
it would have been a lot easier to just plop down a few hundred on new parts and saved a lot of time. Can’t.. all the money in the world cannot tell those factories in China to make those parts and deliver them here within 2-3 months…and we can’t wait that long…
..So what did we do? I bought a bunch of broken ones people are selling off of eBay, exact same model, and stripping them down and picking off what we can use as a parts….I paid 2x more for the broken 3D printers than new parts and spent 2x more time of my free labor desoldering old parts and getting things fixed than needed had the parts been available for order.
Inflation. Really really bad…because our supply chain is still pretty messed up, at least for a lot of tech.
Now this might sound funny to do, taking old broken gear, taking them apart and taking our components you need…but desperate times call for desperate measures….and it’s just a smaller scale of what is happening , even in the appliance industry where this is a very big problem. Hence…
Why is this a big deal? Well let’s think about this…Now you need to hire people to pull shit out of junk, test those components work before reuse. Some of them will fail prematurely and either the manufacturer will be on the hook for additional repairs in warranty at their cost, or they will fail out of warra th where the consumer will pay more for repairs or replacement….
The cost of appliances have gone up considerably . Same home Depot dishwasher I bought about 1.5 years ago is about 2.5x more.
So… How will the Fed’s policy fix this problem? Not sure. Because it seems like demand for goods and services is there, just things are really really backed up.
I’d place my bet with AN, we are headed for stagflation.
CoronitaParticipant[quote=deadzone][quote=Coronita]
Again, dz, why are you so combative on this minor distinction of whether a vacation home is or is not an “investment”? In the greater scheme of things, vacation homes does not fit your conviction that these are homes that will be sold in a firesale if there is a downturn in housing because they are typically owned by wealthy people who aren’t stretched thin and be inclined to sell because a stock market or real estate market [/quote]I’m combative? Your are one who is combative, spewing out 1000 word essays in response to every thing I post.
That said, the distinction of vacation home vs. investment is a fine line. The point is, thanks to the Pandemic, folks on the upper end gained extraordinary amount of wealth, as a direct result of the 5 trillion dollars of Fed money printing and government handouts. That is what led to an increased expenditures on vacation homes, Ferraris, etc. during this period. Whether you can classify those 3rd homes as investments or not is debatable. But what is not debatable is the amount of wealth that was generated during Covid and that many of these “wealthy” buying vacation homes were not able to do so prior to Covid.
So looking forward, all of that Fed money printing is now coming home to roost in terms of massive inflation (who could have predicted that?). Fed is pivoting, interest rates going up, asset markets are in the process of crashing, margin calls will result. Much of this recent Covid wealth effect will be vaporized and those 2nd and 3rd vacation homes will be the first to go when the margin calls are hit.[/quote]
Look dude. You’re in an alternative facts reality when you make.baseless statements that are false. Someone corrects your falseness and you end up reaching for corner cases to try to prove you point that you arent wrong. Multiple people have called you out at this point. If you were QA, you’d be the guy that despite things working, you’re looking for the one test case that causes a UI formatting issue if you rotate the phone 300 times in a row….and everyone else is like really dude?
CoronitaParticipant[quote=deadzone][quote=sdrealtor][quote=deadzone][quote=sdrealtor]
Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth[/quote]accoutrement of wealth <--> Investment
as
tomayto <--> tomahto[/quote]Again clueless. They are excessive expenditures and luxury items for those that can afford them.[/quote]
So my collection of gold jewelry is an excessive expenditure? Even though it is kept in safe deposit boxes, not displayed nor worn? I guess it could fall into either category depending on perspective.[/quote]
(Facepalm)
Seriously?
Gold, just like a house is dual purpose. It could be bought either as an investment (something bought with the consideration towards financial gain) OR something just for enjoyment (without consideration for financial gain).
If I buy a gold ring for significant other, it’s hardly that I’m thinking “well honey, I got this for you because I found this ring at the pawn shop and gold is right now only $1800/ounce, here you go.” It’s more like “here honey, I got my bonus, this is what you looking at you liked but didn’t buy because you thought it wasn’t a necessity. Or here sweetie, I got you this because you got straight A’s last quarter…”
Same thing goes for houses… Vacation houses, are the equivalent to these enjoyment gold purchases, for financially well off people. Vacation houses (2nd/3rd houses) are things that typically richer people buy for enjoyment because they can. Financial gain considerations, if any, is a lower priority. For example, my sibling bought a townhome in Lake Tahoe because they enjoy skiing every weekend. They can afford to purchase it outright. They took out a loan to buy it, since one of them got a employee sweetheart loan from the i-bank he works at, similar to what Mark Z got from his i-bank. They don’t care how much it cost, because they enjoy skiing and like the fact they don’t need to rent a place each weekend they go. As a second consideration, anytime they aren’t using the condo, they will try to rent it out, so that they can recoup some of the cost they are spending to enjoy the condo, but even if they are unable to rent out the condo, it won’t affect their decision to buy and keep it indefinitely. They do the same thing with select reserve wine where they buy several bottles of reserve wine, drink most of them, and sell some of them to reduce how much money they spent on buying to consume those bottles of wine.
Again, dz, why are you so combative on this minor distinction of whether a vacation home is or is not an “investment”? In the greater scheme of things, vacation homes does not fit your conviction that these are homes that will be sold in a firesale if there is a downturn in housing because they are typically owned by wealthy people who aren’t stretched thin and be inclined to sell because a stock market or real estate market corrects…Again, it’s probably hard to imagine because they are in a world completely different from yours where them buying a vacation home financially is as easy and insignificant to their total net worth as you buying 1 small piece of jewelry versus your entire net worth. Must every technicality be combatively debated just so support your conviction?
CoronitaParticipant.
CoronitaParticipant[quote=an][quote=sdrealtor][quote=deadzone][quote=sdrealtor]
Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth[/quote]accoutrement of wealth <--> Investment
as
tomayto <--> tomahto[/quote]Again clueless. They are excessive expenditures and luxury items for those that can afford them.[/quote]
Maybe in DZ’s world, Rolex and Ferrari and yacht are also investments.[/quote]Ferrari’s can be investments. But those are typically bought and become garage queens and never driven, and they are usually some vintage age, not something new. There are people that buy some cars and literally keep them in a climate controlled warehouse and never drive them. But again, that group of people are small, relative to the rest of the people buying Ferrari’s.
CoronitaParticipant[quote=an][quote=Coronita]But where’s prevalent is it’s done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount…For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook’s IPO.
He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.Wishful thinking as this would be wide driver of people forced to sell.[/quote]
Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It’s a win win scenario. Low risk for the lender (easy money).[/quote]It’s goes well beyond the loan… Because of their large pledged assets, an investment bank is more than happy to given them a ridiculously low rate loan product that most normal people cannot get themselves…for the privilege of having a hand in those pledged assets, which the i-bank can do something with now…
CoronitaParticipant[quote=deadzone][quote=pinkflamingo]Nice! I’m curious as well. What I found so far.
Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a “cash offer”. Not 100% sure how they work.
Not really using cash in a cash offer. From reddit, “They’re providing proof of funds via assets they don’t actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage” I’ve heard OpenDoor has a “cash backed” offer.
Loan against assets.
I’ve heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.[/quote]I’ve heard about these techniques (tricks) too. If this is common, what’s going to happen if we have a 30-40% crash in stock market, to all of the folks who secured these real estate loans using their 401K, brokerage account or corporate stock options as collateral? When that margin call hits, will they be kicked out of their house like a bank Repo?[/quote]
Definitely not possible with a 401k account…Not even close…
401k cannot be used as a pledged asset for a very simple reason…
1) https://www.irs.gov/retirement-plans/a-guide-to-common-qualified-plan-requirements#15
Code section 401(a)(13):
The plan must provide that benefits provided under the plan may not be assigned or alienated. In practice, the plan must not allow the assignment or alienation of any employee’s interest in the plan, other than for certain participant loans if they are provided for under the plan terms, and for certain qualified domestic relations orders.
In other words, The IRS does NOT allow 401k accounts to be used as a pledged asset to secure a loan, outside of the 401k account itself offering a loan option, which is usually limited to a low amount ($50k or your balance, whichever is lower)….
2) No lender in their right mind would accept a 401k as a pledged asset, because
https://www.investopedia.com/articles/personal-finance/040716/which-retirement-funds-are-protected-creditors.asp
Retirement accounts that qualify under the Employee Retirement Income Security Act (ERISA) are generally protected from creditors, bankruptcy proceedings and civil lawsuits. Your retirement assets are not at risk if your employer declares bankruptcy. In addition, creditors to whom you owe money cannot make a claim against funds held in your retirement account.To be ERISA-qualified, a retirement plan must be set up and maintained by your employer (and/or a separate employee organization) and comply with federal rules regarding reports to plan participants, funding and vesting. Common types of ERISA accounts include 401(k) plans, deferred compensation plans, pensions and profit-sharing plans.
That’s why under no circumstances should you withdraw from a 401k retirement account to pay off debt even if you’re in a financial bind… In the worst case, it’s a protected asset even during bankruptcy…This isn’t rocket science and those who are financially savy also know this is the case for 401k…..
Now it is possible to borrow money against your after tax brokerage account, but as sdr said, it’s quite uncommon…few cases are done by the financially stupid people that do so at the risk of getting a margin call… But where’s prevalent is it’s done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount…For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook’s IPO.
He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.Wishful thinking as this would be wide driver of people forced to sell.
CoronitaParticipant[quote=sdrealtor]If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level
Second homes are not investment purchases. They are for enjoying
Do you have a zip code to add?[/quote]
Generally speaking,yes. But for me, all my property tax bills go to a PO Box, because otherwise I get hit with solicitations at my home address by companies and people dumpster diving in the county public records that list the property and mailing address of the tax bill.
Two ways to determine if a house is primary residence are:
1. look at the property tax bill and see if there’s a primary residence homeowner’s exemption on it.
2. if the property is inside the city of san diego jurisdiction, see if the address has an rental business tax on it.
Example that I randomly pulled in LJ.,..
[img_assist|nid=27674|title=ptax2|desc=|link=node|align=left|width=540|height=308]Homeowner’s exception $0 => not owner occupied.
CoronitaParticipant[quote=sdrealtor]I would guess that the surveys are always lagging behind a little bit. Those figures also represent some kind of average. Around here people average and below are more typically renters. Those at the average and above are the ones that skew towards the homeownership[/quote]
$122k/year fresh out of college isn’t bad at all.
So when I was out of college, my salary was around $39.5k/year at Qualcomm (forget about the stock options for now).
Back then (when dinosaurs roamed the earth), rent for a studio 1/1 was around $700/month in UTC
I looked up the same studio just now, and it’s 1890/month for 500 sqft.
rent-to-income back then was 21.3%
rent-to-income now is 18.6%So relatively speaking, software engineers are doing roughly the same. Nominally, they are doing better. But the tax rate for $122k is also much more than someone making $39.5k so after taxes, is probably about the same. With $122k though, you can put a lot more into your 401k and get a lot more 401k match ,though… So that’s an added bonus. Back then, I couldn’t contribute the full 401k amount each year, because I didn’t make enough. Kids these days can contribute the full $20.5k/ year, and they won’t even notice it if they do the pre-tax 401k and they will get all their gains tax free if they do the Roth 401k, which wasn’t even an option when I was starting out. So kids these days have it a lot better in many ways. They can hit their 7 figure retirement accounts when their in their late thirties or early 40ies if they play their cards right, versus later 40ies/early 50ies that it took some of us older people to achieve.
The real issue is for (any) engineers is after you’ve been in the industry for some time… The salary (especially if you stay at the same company) starts to plateau really really fast….And while there are plenty of +$200k software engineer jobs, you really have to be good, and not just so-so…without moving into management….
That why eventually people not so great move into management eventually…people like me. ha ha.
CoronitaParticipant[quote=svelte][quote=Coronita]Svelte, so I’m not sure why there’s a difference, but when I went to Indeed, this is what I got….
Less that 1 year : $122k
1-2 years: $125.7k
3-5 years: —
6-9 years: 143.8k
10+ years: 164.8Indeed also indicates a $600k cash bonus.
That’s puts the 1-2 years around $131.7k.[/quote]That is strange! I went again and got my same numbers.
Not sure how to explain that.
My kids friends are graduating and I know a few local companies are paying recent UC and CSU CSCI grads under $100K, sometimes closer to $90K. There are probably some hiring at more than that too but I’m not sure who those are.
Really hard to get to ground truth.[/quote]
Yeah, these survey’s are all over the map. I have my suspicions they tend to trend on the lower side because they probably are filled out by people who are looking for a job and reflect what they are previously making. Once someone finds a new job, it’s sort of less motivation to take the time to fill out surveys. It’s no different than app reviews. People fill out app reviews when they are pissed more so than they are happy.
One thing is certain though, there is a minimum wage law for CA software engineers exempt employees. Someone can’t be classified as exempt if their annual salary is less than $104k. And if they are not exempt, they are subject to overtime pay over 40 hours, and there’s a minimum hourly wage for non-exempt software engineers.
For software engineers in CA, it’s just not practical to hire them as non-exempt… So I suspect a lot of employers here in SD are probably oblivious to the CA minimum wage laws increases that went into effect Jan of this year.
If they are paying less than $104k for an exempt employee, the employer is technically breaking the law and can be severely fined….
But many people, even software engineers aren’t even aware of this minimum wage law.
I had one employee that was slightly below, so we are fixing it now and retroactively reapplying it back to be the beginning of the year.
It’s one of the many reasons why I think software engineers are compensated better than other engineering disciplines, at least in CA. You can thank the gaming industry for this.
Oops, and I meant $6k cash bonus. Not $600k cash bonus. That would have been nice, lol…
CoronitaParticipantSvelte, so I’m not sure why there’s a difference, but when I went to Indeed, this is what I got…. [img_assist|nid=27669|title=swsd|desc=|link=node|align=left|width=1259|height=794]
Less that 1 year : $122k
1-2 years: $125.7k
3-5 years: —
6-9 years: 143.8k
10+ years: 164.8Indeed also indicates a $600k cash bonus.
That’s puts the 1-2 years around $131.7k.CoronitaParticipant[quote=svelte][quote=an]
Two Sr. Software Engineers with 3-5 years of experience can probably make $130-150k. That’s a combine income of $260-300k/year. They can easily qualify for $1m house. So, I don’t know what you’re talking about.[/quote]2022 San Diego SW Eng Salary Range
$93,714 Less than 1 year experience
$96,282 1 to 2 years experience
unavail 3 to 5 years experience
$110,127 6 to 9 years experience
$126,168 More than 10 years experiencefrom indeed.com
[img_assist|nid=27666|title=2022 San Diego Software Engineer Salary Range|desc=|link=node|align=center|width=466|height=319][/quote]
So here’s the issue with this survey
Directly from the State of CA employment website
https://www.dir.ca.gov/oprl/ComputerSoftware.htm
“In accordance with Labor Code Section 515.5(a)(4), the department has adjusted the computer software employee’s minimum hourly rate of pay exemption from $47.48 to $50.00, the minimum monthly salary exemption from $8,242.32 to $8,679.16, and the minimum annual salary exemption from $98,907.70 to $104,149.81 effective January 1, 2022, reflecting the 5.3% increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.”
So this survey suggests there’s a lot of employer violating CA employment laws if they are exempt salaried employees or they could be violating overtime rules for software engineers that are paid hourly, unless they hired software engineers that work less than 40 hours/week…How many companies hire software engineers on an hourly basis and let them work less than 40 hours/week, based on experiences of running software projects?
I can definitely say even for Florida software engineer wages, these averages would be low. Because our wages are not even this low based out in Florida. They are about $20k higher at each band, excluding cash bonus was about 10% this year for non-managers, and a 5% 401k match on top of that. And that’s pretty shitty relative to some of the other employers hiring out here. Which is why we keep losing people 🙂
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