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(former)FormerSanDiegan
Participant[quote=sdrealtor]And then a baseball game with a legendary ending before grabbing a flight home Sunday night. So fortunate[/quote]
That ending sucked.
ParticipantDon’t pay high fees…
Buy a stock index ETF with little or no commission and let it ride:
SPY or VTIFurther advice here:
Participant[quote=EconProf]
But I must correct a couple of commentators that suggest San Diego is not losing population. As reported in early May, it lost 11,183 people from July, 2020 to July 2021. You can google it for the various news sources.
That’s population declining for the past two years.[/quote]I googled it and the first thing I found was the opposite of what you stated.
In God we trust. Others must bring data.https://www.macrotrends.net/cities/23129/san-diego/population
[img_assist|nid=27720|title=San Diego population|desc=|link=node|align=left|width=100|height=46]
Participant[quote=deadzone][quote=FormerSanDiegan][quote=deadzone]Just pay attention to the Fed balance sheet (which didn’t exist before 2009 by the way).[/quote]
This is FALSE.
Although the Fed balance sheet expanded dramatically after 2008 it has existed for decades before that.[/quote]
It was negligible before 2009. When before 2009 was the Fed directly purchasing MBS? Relatively new phenomenon.[/quote]
I wouldn’t consider $750 Billion negligible.
Agree that MBS purchases were a new lever pulled and that Fed assets have expanded significantly… from about 7-8% of GDP in 2007 to over 30% today. But your original implication that they had no history of assets before 2008 was false and misleading. In fact the Fed has at least a 70-year history of asset purchases.
Participant[quote=deadzone]Just pay attention to the Fed balance sheet (which didn’t exist before 2009 by the way).[/quote]
This is FALSE.
Although the Fed balance sheet expanded dramatically after 2008 it has existed for decades before that.
Participant[quote=deadzone]
Given that our economy is almost exclusively reliant on housing and associated wealth effect…
[/quote]Housing is a significant driver, but by “almost exclusively” do you mean 99%, 95 % of the economy or what percentage ?
I would like to see the data that supports this.Participant[quote=flyer]And in other real estate news–don’t think this will affect any of us. Personally, we haven’t been flipping for awhile, so I’m not concerned–not the core of our business. There are lots of things going on in the world that could have an impact on real estate, but I don’t think this will move the needle much, if at all.
SAN DIEGO COUNTY, Calif. — A state law maker from San Diego says short-term investors are contributing to the housing crisis. Now he’s introduced a Bill he says will give average people a chance to own a home again.
Flipping houses is nothing new. You purchase a property, make necessary changes and then sell it for a profit.
But Assembly member Chris Ward, from the 78th District, says that process is hurting the housing market and keeping average people from buying a home.
The California Housing Speculation Act or Assembly Bill 1771, is designed to change real estate tax policy and discourage some investors from quickly reselling properties like single family homes.
“It would be an additional income tax on the profit gain from a sale that occurred within three years of the previous sale,” said Ward.
Ward is proposing an additional 25% tax on the gain from the sale beginning January 1, 2023.
He says research shows U.S. investors bought a record $63.6 billion worth of homes by late last year. Nearly three-quarters of that was single family homes, the highest level it’s ever been.
“But we’ve also seen this influx of short-term investors trying to get into the market, outbid San Diegans and Californians with all-cash offers, and drive the prices up for everyone,” Ward said.
Ward says California does have a housing supply deficit, but profits continue to grow by 26% each year, which isn’t sustainable.
University of San Diego real estate professor Norm Miller says the Bill may help, but California’s tax laws are still more favorable to investors.
“But if you’re an investor, an institutional buyer, not only do you get unlimited tax right offs from the mortgage interest and the property taxes, you’ll also get depreciation, which is something an owner does not get on their own personal residence,” Miller said.
“So, if somebody’s trying to go in there, fix up a fixer-upper and then sell it for record profits, that is distorting the market because somebody else could have gone in there, done the same and kept the home,” Ward said.[/quote]
Interesting proposal…. Maybe this should be in its own thread.
Ward is misguided and probably doesn’t understand economics. How can limiting available inventory help buyers (assuming the extra tax reduces supply because owners will wait 3 years).
His quote makes this clear :
So, if somebody’s trying to go in there, fix up a fixer-upper and then sell it for record profits, that is distorting the market because somebody else could have gone in there, done the same and kept the home,” Ward said.
Doesn’t he realize that the people in the market who might buy the home and fix to live in it already have that opportunity.
Participant[quote=deadzone]You can’t compare the 70s to today. The current asset bubble and subsequent inflation were caused directly by the Federal Reserve QE policy which has only existed since 2009. This was an experimental policy intended to recover from the 2008 financial crisis (and with real purpose to bail out the bankers and wealthy elite). But they clearly took this QE too far and the entire economy has been addicted to the Fed like a crack whore ever since. Then the Fed went into hyperdrive during Covid when the Fed nearly doubled their balance sheet in less than 2 years
[/quote]I can indeed compare the 1970s to today. (In fact that’s exactly what I did above) In fact some of the monetary levers pulled were much more drastic than QE, such as end of Bretton Woods, effectively eliminating any ties to gold, etc. History doesn’t repeat itself exactly but often it rhymes. Those who ignore it do so at their own peril
Participant[quote=deadzone]
And I’m just being pragmatic too. If signs point to a major correction/crash, it is good to accept that and plan for it. Seems like we agree that inflation is out of control and that is not a good thing for the general populace. The only way this inflation is going to get under control is a crash of the current asset bubble. Looks fairly certain that the Fed is going to engineer this crash of the bubble they created.[/quote]
One should consider what happened in the past when inflation was high and observe the impacts on real estate. Consider the decade from ~1972 -1984 which was one of the most significant periods of higher than post-WW2 average inflation.
What happened to home prices during that period ?Inflation was ultImately tamed through fiscal and monetary policy changes (and perhaps demographic changes) and this period included three recessionary periods.
But what about home prices? Did the asset bubble burst in the correction or was real estate an effective way to survive that inflationary era ?
Median US home price January 1972 = 26,900
Median US home price January 1984 = 65,341These are nominal dollars. In inflation adjusted terms home prices pretty much tracked inflation.
Source
[img_assist|nid=27532|title=Home price during inflationary period|desc=|link=none|align=left|width=533|height=400]
ParticipantInteresting move EconProf…
Thanks for freeing up some space for those of us moving back to San Diego from more expensive places further north.
After 16-ish years we are planning to move back to San Diego later this year due to the relative affordability compared to LA’s Westside.ParticipantHave you considered Bay Park (West Clairemont)?
Under appreciated area… bay views… centrally located.Participant[quote=FlyerInHi]This is what Bob Shiller says about the next recession. He equivocates but he’s pretty much saying that we are due for a recession.
https://youtu.be/rUYk2DA8PH8%5B/quote%5DShiller’s views from the preface of a book published in 2012:
“Efforts by governments to solve the underlying problems responsible for the [2008] crisis have still not gotten very far and the ‘stress tests’ that governments have used to encourage optimism about our financial institutions were of questionable thoroughness,” Shiller writes in the preface to his latest book: Finance and the Good Society. “As I write in 2012, we certainly do not believe that [the crisis] is over yet, and the worst may be yet to come.”
.
ParticipantThe saying goes:
“Now you’re cooking with gas”
for a reason.ParticipantSuper high IQ. So high it breaks the OQ meter. Yuuuuge.
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