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spdrun
ParticipantIt’s been very much tied to risk appetite and QE. Also stocks.
Dollar went astronomical after Aug 2008, only to drop hard when QE(1) was announced.
Rise in DXY in early-2010 was followed by a drop in DOW below 10,000 in mid-2010. Rise of DXY in early 2011 was concurrent with a drop in DOW to the low 11,000 range. 2012 peak in DXY, DOW hiccuped in April-June.
Like it or not, dollar strength has been pretty much inversely tied to risk appetite since 2008. Historically, this hasn’t been true, but the last few years have been different.
ParticipantConstruction doesn’t speak to future pricing, BTW. In fact, construction is more units increases supply, so is a downward pressure on prices.
It’s actually a RESULT of prices, not a cause.
Or perhaps a result of speculation. I see quite a bit of construction in parts of NJ, even while the po’ peoples gettin’ fo’ closed on machine is stiyl swingin’.
ParticipantBefore you can have negative growth, you need to have slowing growth. The effect won’t be as abrupt as the end of QE1 and QE2, since they tapered it slowly, but give it a few months. Especially if the US gets hit with another “economic winter” in the snowy parts of the country (here’s hoping, doin’ a snow dance!).
Interestingly, high dollar has been exactly a harbinger of a poor economy since 2008, since it meant a rotation into cash from other assets.
Foreclosures? Many states are still working through loans from 2010-11 (believe it or not). Pretty soon, we’ll have HELOCS from the 2006 era resetting as well. Foreclosures in judicial states are up a lot since last year.
A rise in rates and end of QE will likely send any uppity sellers back underwater 🙂
ParticipantNew home construction/permits. (down)
Foreclosures in the Northeast. (up, actually up even in CA, though not in SD)
August jobs report. (creation way down)
Active property inventory (yes, even in SD). (up)
30-yr rate jumped 0.25% after Wednesday.
Dollar index is massively up since Fed tapering started.Once QE is done, good news will no longer be bad news and vice versa.
I’m traveling this week. I’m paying prices that are slightly less than 2011-12 for hotels and car rentals. Not indicative of good demand.
Participant..
ParticipantMiami is actually halfway acceptable because it’s heavily non-American and multicultural. Not to mention having some very cool architecture.
What about downsizing and just lowering your expectations? Condo of about 1000 sf with outdoor parking. Who needs a gar(b)age in California weather, especially if you drive a used car or two that you don’t care about a few scratches on?
I don’t see a huge shortage of the above in beach cities for $400-500k.
ParticipantIt seems the Dem’s don’t like Market crashes. IMO anyway.
2000-1 dot.com bubble crash started under Clinton.
2007-1 property crash started under Bush.We’re about evenly split.
Yellen seems determined to stay the course on tapering, which IS tightening despite her best remonstrations. We’re already seeing rates going up and indicators slowing down.
As far as the $10k question, I’d buy $1000 of both to minimize risk while not being out of the market entirely.
ParticipantBut at a bit of a discount to today’s prices, it would be less life-altering. And SoCal isn’t a raging, humid, hot rathole like humidlanta. There’s a REASON why prices are higher in CA than in JawhJah.
If one blows their downpayment on a house in ATL that then loses value when rates go up(*), they’ll be stuck there until they can save another downpayment.
Skells will have to sell when they smell rates goin’ up, best to keep some powder dry so to speak.
(*) – to be clear:
1. The R.E. markets ARE slowing since last year. Fed is tapering anyway. This worked out so well (no sarcasm intended, from my perspective) in 2009 and 2011-12.
2. Rates ARE going up. A +0.25% reaction to tapering that should already have been priced in is significant. Remember that we spiked over 5% after QE1 and QE2 were euthanized, even under ZIRP.
3. Tapering is a done deal. Short of an October cataclysm or nuclear war, there won’t be enough data in the next 1.5 months, before the October 29 meeting, that can’t be passed off as “temporary.”
4. Qualified Mortgage isn’t going anywhere, fast. We shouldn’t count on a new wave of loser-loans to bailing out markets any time fast.ParticipantWait a bit…
Interest rates up 25 basis points on the latest Fed tapering. Hopefully we’ll see 4.5 or 5% by October when QE3 is finally put to pasture, giving the real estate market a massive shot in the arm.
And by “shot”, I mean shot of Propofol to put it back to sleep, Michael Jackson style. A bit of a drop in prices will put a lot more skells who bought into the last bubble under water, slowing things down further, starting a virtuous cycle.
What’s the rush? Wait till the skells have to sell short again, then jump in like a Russian paratrooper late to a party in Donet’sk.
Yeah, there’s talk about relaxing mortgage standards so more crappy-credit cretins can buy condos and cribs, but this will take a year or two to happen, what with the QM rules.
Also, keep in mind that if you buy in Atlanta now and rates go up, your value might be hit and you’ll regret not buying in CA. Property markets seem to have slowed down or be in the process of doing so. I’d adopt a wait-and-see attitude rather than making a life-altering decision now.
ParticipantAlmost anywhere in the state, you’re 1-2 hours away from some great beaches, a few hours away from decent skiing and hiking. Plus the northwestern part of the state (take Rt. 23 up to Highpoint) is very beautiful.
I don’t mind the winters — the snow is actually enjoyable to me. This summer wasn’t bad either. I used the a/c maybe four times, and that was in NYC which is hotter than NJ.
I’ve been to NJ and I have a friend who lives there. Extremely boring in the middle of all the vegetation. You don’t see anything but green trees on end. Humid and hot, or humid and cold. People look forward to the spring and fall.
The redeeming thing is that it’s close to NYC so you can go on weekends.
From what I understand, people stay in Jersey for jobs only. Then they move away after retirement.
ParticipantThere are a lot of jobs, especially in telecom and pharma locally vs in NY.
You fix. You don’t spend to excess modernizing. People will still rent it.
I rather like the untamed vegetation. It adds to character. Remember that things also grow faster in the climate, so there’s simply MORE vegetation.
ParticipantA ~$500K home in TX is a large “luxury” home with nearby amenities such as a community lake, tennis, HOA, etc.
Since when is an HOA an amenity instead of a ball-and-chain? I’d rather live in a town with a community park (possibly with pool and tennis courts) as is common on the East Coast. You end up with more rules on the township level and fewer on the private/HOA level, but at least towns are subject to Constitutional oversight.
ParticipantI’m actually not looking at this particular house, but I offered it as an example of what’s relatively common on the East Coast.
Morristown is mixed, some areas are better than others, it’s not all Daughters of the American Revolution.
Participant^^^
High property taxes (at least the cost of a $100k mortgage per month if not $200k) depress prices nicely. As did the judicial foreclosure process. Homes that started the process in 2010 are just hitting the market now in a big way and the governor isn’t too eager to help suckers who overpaid in 2005-2006.
This is what $300-350k can get you in a small city that’s about 1 hr by train from NYC, and close to more local job centers.
Live in one 3/1 unit, rent the other to some schlub for $1500-2000 and have your mortgage paid for you.
Compared to San Diego, it’s good bang for the buck.
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