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Zillow was overpaying for homes, but also charging the seller a 7% “fee” that it kept itself?

The seller in such circumstance would demand an extra 4.5% as the difference between Zillow’s fee and the normal buyer agent fee.

This inflates what Zillow actually paid and makes its losses also look larger.

We shouldn’t be too shocked Z is losing a lot of money. That’s the Silicon Valley DISRUPTION! that investors are lining up to subsidize.

Lyft just reported Q3 2021 results, and revenue is still well below Q3 2019. They also have diluted shareholders by 10% by issuing more shares, have dissipated another 1.5 billion from their balance sheet, and lost “only” $60 million because they booked a 1-time $125 million gain on selling their self driving assets to Toyota.

Despite another quarter of massive losses, they are up 12% afterhours and higher than 2019 when the company had more revenue and more customers.

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One man’s spoiled milk is another man’s yogurt.

Mom has my old 11, and she likes it a lot. She was holding onto her 8 because she liked the fingerprint ID.

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Depreciation and deflation have actual definitions in economics, and not the way you use the words. The decrease in the market price of a new product over time is the latter, not the former.

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Transitory whenever I have seen it means a return to pretrend inflation of about 2%.

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SDR, I am on the frugal side overall but last month I purchased a 33k new CUV at msrp and 3 new iphone 13 promaxes for me, my partner, and my longest serving/suffering employee. That’s $1180 a pop with tax x 3.

My prior phone was the regular 11. 2 years ago it was 699 before tax, now Apple is selling the 11 new for $499. It is irrelevant that it is now an “old model” as price decreases is literally what deflation is.

The old car and phone were fine, I just wanted the best camera for my coming son and a car with the latest safety features. The pretax 1099 price point of the 13 promax is the same as Apple’s past few flagships, despite a ton of upgrades. We’ll also probably get one if those $1000 fancy strollers, ideally used, and then about $1500 for a postpartum doula.

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Restaurants are more expensive? You mean like inflation?

Yes, inflation! And no needed hedonic adjustment, similar but the opposite of phones, TVs, cars, etc. Prices at restaurants are going up while quality is going down.

But it is also an example of transitory inflation caused by one-time factors. The industry had a double supply shock.

First, the “900 a week in unemployment to people who were making $500 a week working” federal policy hit the labor supply of restaurants really hard.

Second, COVID caused a lot of restaurants that were marginal to shutdown permanently. While some might reopen, others had owners just retire, while others changed industries. Reopening during a severe labor shortage and shifting COVID regulations is a lot harder than just having an existing business on autopilot.

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Flyer, how does a waitlist work for a SFH rental? You keep an ad up permanently and people can just add their name?

I’ve only heard of this in the context of large complexes.

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I don’t think gzz said anything about lack of inflation. His prediction is about rate, which is about oversupply for saving v.s. market demand for those saving.

If I understand him correctly. He is saying that demographic change creates more savings and the rich also has excessive saving, that they will accept however low returns due to these excessive savings that there’re not enough market demand for it (e.g. lower corporate investment demand).

Correct. And whether inflation is 1.5% or 5% has very little to do with this.

Did we have articles about the positive effects of inflation in the mid to late 70s?

No, but the political system was not so biased in favor of hard money elites, meaning inflation was possible, and officeholders feared high unemployment and low wage growth more than inflation.

Now officeholders are either or both hard money true believes and want to work for elites at elite salaries after they leave office. “Inflation isn’t coming, but it would be a good thing if it did” is a disqualifying statement for most elite jobs.

The politically correct thing is to mouth the right combination of worries about hyperinflation, “money printing” and “bitcoin solves this.”

The data displayed there shows an increase in savings rate relative to GDP but not a substantial increase.

I think your link supports my point that there’s a secular trend toward higher desired savings due to population aging and the rich getting richer and lacking consumption opportunities to spend money on.

Savings increased slightly as a share of GDP even though interest rates went down relentlessly.

Never recover? My math might be bad, but I think Never sounds like a very long time. Never?

In my own experience, and that of my family and social circles, there has been and is an enormous pent-up demand for travel and any variety of outside the home activities.

Never recover to their prior share of the economy is what I should say. Maybe their nominal size will eventually hit 2019’s.

Also, even if you’re right about pent-up demand, supply is also impacted. I’d like to go on fun business trips to LA/SF and fancy restaurants at the same rate I did at 2017-2019. But the experience of both are degraded AND more expensive. Just one example of how the demand is there, but that’s not enough.

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Not trolling, that would mean I am being insincere about something to provoke a reaction.

I understand you don’t see yourself as making predictions. But what I see in your article are implicit assumptions that amount to predictions about the future.

The two big ones are

(1) rates have probably hit their lows and the realistic future scenarios are higher rates or flat rates

(2) a move in inflation above 4% for a few years will lead to higher nominal rates. I.e., you seem to discount (no pun intended) the possibility of extended and highly negative real rates.

who’s to say that those underlying causes won’t start to shift in the other direction at some point

The big underlying cause of declining rates is demographic. And the big demographic shift certainly is not going to go in the other direction. Hungary and Russia are the latest nations that have spent a ton of money subsidizing births. And they did get some return, in the sense of getting birthrates to go from 1.4 to 1.7 children per woman for Hungary and Russia from 1.2 to 1.5 (if I remember the exact numbers right).

But there’s zero examples of nations headed toward aging and declining working age populations actually reversing trend. And while there are few exceptions, aging and declining fertility are trends that are accelerating, and spreading from the developing world increasingly to poorer and middle income nations.

And even if we could somehow go back to 2.2+ TFR, demographic momentum means this would have to last for 15+ years to have a serious dent in long term economic trends.

So I plead guilty to dismissing the possibility of this trend “shift[ing] in the other direction.”

The trend of growing inequality I also don’t see changing, even though it could happen much more easily.

The developed world has a mix of parties that support inequality policies openly like the GOP and those that pretend to care, or are ineffectual and corrupted, like the Democrats. Bernie can’t even win a Democratic primary. And in a hypothetical where he or someone similar becomes President, he needs 60 votes in the Senate to pass major legislation which is never going to happen because rural midwestern and western areas that used to vote for Democrats have stopped.

In the EU meanwhile, the ECB smashes down any party that seeks to address inequality.

All of this political analysis applies equally to inflation, which is an egalitarian policy that elites around the world have demonized and crushed. The MSM is just packed the past year with awful scare stories about inflation, but never covers deflation. Here’s Irvine progressive journalist Kevin Drum debunking a related MSM scare story:

There is no drug shortage crisis

I’ll worry about inflation when I start seeing articles about the positive effects of inflation. Fat chance!

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If mortgage rates remain at the post-pandemic average of 3.0%, it will neither help nor hurt affordability from this point.

To offset a rate rise to 4.1% (the pre-pandemic average in the above chart), home prices would have to decline by 13%.

To offset a rate rise to 4.9% (the high point in the graph reached in 2018), prices would have to drop by 21%.

If the inflation-worriers turned out to be right, and rates broke above their pre-pandemic range, perhaps mortgage rates might rise to 6%. This is not an outlandish number… it’s about 1% above the level reached in 2018, and is somewhat below the average rate for the decade of the 2000s. To offset the affordability hit from a 6% mortgage rate, home prices would have to drop by 30%.

None of these are predictions. (We think anyone who has a confident multi-year interest rate forecast is deluding themselves).

Rich’s four interest rate scenarios are kind of like Stephen Colbert’s frequent interview question: “George W Bush, great president, or greatest?”

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I agree with these ones:

[quote=Escoguy]

1. the supply chain issues will have worked themselves out, even PC demand is set to slump about 5% in coming 12 months heard on CNBC today
2. shipping costs will come back to historical trends
3. energy prices will soften (perhaps at somewhat elevated levels)
6. will hit some limits of government stimulus
7. USD will stay relatively flat with low interest rates (safe haven effect) but continued political infighting will prevent signifiant boost to growth via public investment
8. US growth may actually outpace China for a couple of years as China starts to show age from demographic shifts (10-15 years out it gets worse for them)
9. stocks are the hardest to predict as there has been so much obsession with the US market so momentum likely to continue, many international markets are more fairly valued but the momentum catalyst is often missing
10. Don’t want to make political predictions but if we don’t get better choices in 2024 (could be catalyst for meaningful volatility), revulsion at whoever is perceived as extreme could cause more damage
11. certain commodities (think coffee) may be the best investments (something like 1/3 of the Brazilian crop was wiped out in August and may take years to recover
[/quote]

I don’t agree here:

4. housing will enter a period of 3-5 years of under performance (mean reversion) 2023-2026 it may still be 1-2% nominal increases but likely below inflation (over 3 years could drop 5% adjusted for inflation).

How is this going to happen when there are far more buyers than sellers, and construction costs are high in all the hot markets? The switch to Biden will also up residential demand via immigration and Chinese buyers feeling more welcome.

Also, don’t forget the sticky price issue, while stronger for rents, still applies for RE pricing because (1) appraisals need to catch up (2) the confirming loan limits right now are way below what they should be because they only get updated in January. In fact, right now is probably an all-time record low for the ratio between median price and conforming loan limits, which will be followed by a record large increase.

I think China will start feeling its demographic changes pretty soon, but still has at least five years of torrid 5% real GDP growth left in it before that happens. They have a highly educated and skilled workforce and increasingly first world infrastructure. Their stock market is full of scams and there’s no investor protection from fraud or government seizures, so I wouldn’t invest there however.

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ZK your pic took me back, that looks like my favorite model from my college days in 1998-99.

I am happy to hear you have got so many years of good use, that’s my justification for spending $9200 on one. It was the last item I really needed for the home gym that will save me about $300 a year in membership fees, and which I will actually use more and not have to drive to. I also like having my own music with a Bose sound system, not the increasingly bad music at the gym mixed in with loud advertisements and repetitive instructions to always wipe down and download the gym’s app.

Nothing like being able to get a 3 hour workout and not have my knees and feed hurt the next day. Though after hitting my weight loss goal I have been focusing on upping intensity not time, so average 1.5hrs 3x a week now, and only go 3 hours about once a month.

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Managing a tenant is a lot easier than renovating a condo. If you can do one, you can do the other.

A high end 3/2 is going to be a married couple who will probably treat it well as long as they don’t have a pet.

I suggest listing it for $3200. If you don’t get within a week multiple strongly interested people who you personally like and feel comfortable with, then go down to 3000.

List it now, and you will have time to pick carefully during your rehab.

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When I was last in NYC I went to the comedy cellar in GV, where he made his comeback and where he used to work at when he was young.

It’s a pretty fun experience, and really small. I didn’t see any big names, but the MC and all the stand ups were very good.

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I cant begin to tell you how big the resale market is for unused home gym equipment.

Not for the high end of the market.

I think a lot of the “big market” for used home fitness is low quality stuff advertised on TV or sold at WalMart. People don’t end up using it because it is uncomfortable, wobbly, and hard on the joints.

I am tightwad, so I looked used before buying my $9200 elliptical (now $10,200). I really wish I could have gone with a cheaper model too, but I was used to a particular model that I used for years at 24 Hour Fitness and EOS, and everything else felt flimsy, shaky, and unable to let me go all out when doing interval training. This one here:

Precor AMT 835 Adaptive Motion Trainer

A lot of equipment hit the market at that time because of gym bankruptcies. It got snapped up in days, I know because I called the listings for multiple gym bankruptcy sales.

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