Kolek planning to go pro
I will add, sadly, that the recent run up in pricing in Florida has delayed my dream of moving there in the next 5-7 years, but such is life.
Glad he’s still bullish. At some point he’ll be right, I hope soon. But the S+P is down 18% in the last 8 months. The Nasdaq (where the real money has been made in the market) is down 28%. As corrections in this bull market are concerned, this one is deep and extended.
Thanks?
For those interested in more information on I Bonds, this Seeking Alpha author writes fairly often about them. His reports are comprehensive and easy to read. Here's his latest:https://seekingalpha.com/article/4539511-should-you-invest-in-i-bonds
The Fed didn't act quickly enough. There's no need for a political discussion but the most recent spending bills have not helped the overall economy.
As an old codger, I'm aware of the impact of the 1973 and 1979 oil shocks on the economy. While there were many reasons why inflation was out of control in the 1970s, the price of oil was a huge issue then and it is now.We will not have inflation under control until we get control of energy prices. Petrochemicals, natural gas and carbon-based fuel underlies almost everything we do, from heating and cooling our homes to transportation to manufacturing to refining of raw materials to agriculture. In the past two years, we've seen a doubling in the cost of gasoline and a barrel of crude rise from $42 to almost $100 a barrel. Because this is sustained, we have inflation.Energy prices drop and we get back to something close to normal.
Gotcha. Agree on the fed. And the latest spending bills have way too much long term spending to help the economy. But I don’t think they have much impact on inflation either.
GooseMortgage rates have risen from 2.8% to 5.9%. And they’re going higher. Home prices are already off their highs in most markets and will fall everywhere eventually as fewer and fewer can qualify. But supply is short so in the most desirous locations price drops may be modest. All depends how long this mess lasts.
I am really interested to see if home prices drop off, or if they just flatten out. I'm on the younger side, and was kind of molded in the post-08 economy, so I always assume that houses are like stonks and prices will drop in a weak market. But my limited understanding is that the 2000s were one of the first times ever that home prices actually dropped, and that a slowdown has traditionally always meant suppressed rises in prices, but that homes have not traditionally lost value. Although I can imagine a lot of places in Florida probably are outliers to that trend (to the extent I have it correct) given the higher volatility in prices there and the less elastic demand of retirees looking to locate there.
FWIW, per my Financial Adviser last week said Ameriprise's position is home prices will stabilize for more or less what you said.
I guess it depends on time scale. Right now in my area, homes are selling at ~5-10% lower than they were in April and May, and inventories are rising. Now, my area saw an extreme increase, that was essentially unaffordable. If inflation continues, I would expect a similar situation nationwide with home prices falling at least 5-10%, and more in areas that experienced rapid increases.
And that's probably where they will stabilize at in the 5-10% reduction range. Weren't home prices up 30-40%?
And free money that heats up economies is never truly free.
I think the issue is the way "transitory" was positioned or used. Some, not all, tried to brush aside inflationary concerns as something that would pass in weeks or a few months. Whether it was for political reasons, to bide time to find a solution, or just cause the full extent wasn't known, that doesn't really matter. I don't think its the end of the world, and agree that economies, even the strongest economies, ebb and flow, but honesty and living in reality is important.Inflation or economic stumbles can never be placed at the foot of one party or politician or policy. But in this partisan era, there seems to be a need to immediately blame or scapegoat something, thus this discussion. That being said, there are a disturbing number of people lacking even the most remedial economic education that don't seem to understand what causes inflation, what can make it worse, and what can be done to solve it, and that is obnoxious.IBTL
I think home prices are going to stabilize, mostly due to higher interest rates, but there is a massive supply shortage in a lot of markets that will keep prices from sliding significantly. I read something last week that the 2008 recession slowed down people moving into the skilled trades because there just weren't job opportunities for carpenters, electricians and plumbers. Now all those professions are needed because we just need more housing units.
So We have:1. Interest rates pushing prices downward2. Materials cost pushing prices upward3. Inventory pushing prices upward