Investing Thread

[Hards Alumni]

Tower

There will be no housing shortage if people cannot afford to buy one. Sadly, I believe that the housing market is looking at a very serious situation. I am on several email lists for condo/house for sale in SW FL and the mid range is reducing pricing weekly. I have seen one condo in Sarasota drop the price three straight weeks. They are not a pre pandemic pricing but down 15-20% at the moment.

There will be price range/markets that hold up better than others, but I think there is going to be bargains to be had in next 12-18 months. The cost of homes has been artificially propped up by free money and those days are gone.

You live in a prominent retirement area.  It will be prone to major swings.  If inflation is up, and retirees and their portfolios are down the first thing to go will be the home that they overpaid for.

SW FL is probably one of the most volatile housing areas in the entire US.  Your area is certainly an outlier.

[Goose]

tower


Zero hand wringing being done by me. I simply saying that the last 15 years created issues that I believe many will struggle to navigate the changes. I think your simplifying what the other side of a decade plus of fantasyland may look like may be a poor judgement call. That is just my opinion, but the world is chaotic at the moment and the economy is only part of the problem.

[tower912]

The world is chaotic right now.   Agreed.  And there are a couple of madmen who could just say f it and end it.   And a worldwide plague only partially contained. You are engaging in sepia toned nostalgia and forgetting that the world has survived a near infinite amount of challenges.  And you are engaging in boomer thinking that, if we survive this generation's group of evil dictators and pandemics, that ways won't be found to forge forward.

There are nearly always challenges.  Meet them.

[Goose]

tower

Appreciate the advice on meeting the challenge. I 100% believe all challenges will be met and the world forge ahead in the future. Simply, I do not think the same toolbox is going to be used to meet the current challenges and saying "we have seen bigger challenges before and beat them" is going to be the way out this time.

[TSmith34, Inc.]

Tower

There will be no housing shortage if people cannot afford to buy one. Sadly, I believe that the housing market is looking at a very serious situation. I am on several email lists for condo/house for sale in SW FL and the mid range is reducing pricing weekly. I have seen one condo in Sarasota drop the price three straight weeks. They are not a pre pandemic pricing but down 15-20% at the moment.

There will be price range/markets that hold up better than others, but I think there is going to be bargains to be had in next 12-18 months. The cost of homes has been artificially propped up by free money and those days are gone.

You seem surprised at the data-- the unaffordability of housing for the lower and middle classes isn't new. And a 20% drop leaves them still up roughly 30% from a few years ago.

[Goose]

TSmith

What I am surprised about is the average net worth noted in that article when over 40% of Americans have a 401K and over 60% own a home. Not exactly sure how so many people have bought a home, if the numbers are correct.

[tower912]

tower

Appreciate the advice on meeting the challenge. I 100% believe all challenges will be met and the world forge ahead in the future. Simply, I do not think the same toolbox is going to be used to meet the current challenges and saying "we have seen bigger challenges before and beat them" is going to be the way out this time.

Did your generation use the same toolbox as your parent's generation?

[Goose]

tower


Not that I give a shxt, but why does everything always come down to what generation one falls into? Also, just curious, how many years constitutes a generation to you?

[TSmith34, Inc.]

TSmith

What I am surprised about is the average net worth noted in that article when over 40% of Americans have a 401K and over 60% own a home. Not exactly sure how so many people have bought a home, if the numbers are correct.

I don't know about you, but 40% strikes me as pretty paltry. Further, simply looking at the percentage participation masks the picture.

Millennials should be at the age where they are buying their first houses, but:

Retirement Accounts
According to the census, just under half have some sort of retirement account
https://www.census.gov/library/stories/2022/08/who-has-retirement-accounts.html#:~:text=Demographics%20of%20Ownership&text=Generation%20or%20Gen%20X%20members,23%20owned%20a%20retirement%20account.

Balances
But according to Vanguard, the median balances are in the $36K range
https://www.personalcapital.com/blog/retirement-planning/average-401k-balance-age/

So the median for all people in this age range are all of ~ $18K

And, when you probably bought your first home, median house prices were around 4.5x median incomes, now they are 7.5x median incomes.

[MU82]

Goose, upper class and boomers owning multiple homes is a contributing factor (not the only one or even biggest) to the housing shortage.   So, the situation you describe in Sarasota (vacationed on Lido Key multiple times, noticed empty high rises all of them) can also be seen as an opportunity, not just a crisis.

Also a huge contributor: corporations buying up houses and then renting them.

Creates a shortage of houses. Drives up house prices. Also drives up rent prices.

It's an enormous weight on middle-class and lower-class people in Charlotte, I know, and in many other major metro areas. Some HOAs have enacted rules to prohibit it, but they were way too late doing so.

[Spotcheck Billy]

Gas price is up 70 cents at my neighborhood gas station since Sunday. I'm good with it and then some, hey?

Location Location Location
Only 3.57 on the south side

[forgetful]

Also a huge contributor: corporations buying up houses and then renting them.

Creates a shortage of houses. Drives up house prices. Also drives up rent prices.

It's an enormous weight on middle-class and lower-class people in Charlotte, I know, and in many other major metro areas. Some HOAs have enacted rules to prohibit it, but they were way too late doing so.

And they will continue to do so as they have access to far cheaper capital than the average person.

[MU82]

META announces 11K layoffs. As often happens, Mr. Market rejoices. Shares up 5% premarket.

Meanwhile ... crypto, which already has had a rough year, got routed overnight. BTC at about $17,500, near 2-year low. ETH also near 2-year low.

[Hards Alumni]

META announces 11K layoffs. As often happens, Mr. Market rejoices. Shares up 5% premarket.

Meanwhile ... crypto, which already has had a rough year, got routed overnight. BTC at about $17,500, near 2-year low. ETH also near 2-year low.

Crypto held on strong against inflation for a while, but no one wanted to bring that up. 

[MU82]

Crypto held on strong against inflation for a while, but no one wanted to bring that up. 

I assume you include yourself in "no one"?

[rocky_warrior]

Crypto held on strong against inflation for a while, but no one wanted to bring that up. 

Down 74% over the past year.  I have opinions...

[Hards Alumni]

I assume you include yourself in "no one"?

Correct, I didn't bring it up, just responded since someone brought up crypto.

[Hards Alumni]

Down 74% over the past year.  I have opinions...

vs the dollar, yep that's true.  Still up over where it was in 2020.  Let's see about later today.

Amazon has lost over 1 trillion in market cap.  Meta down real bad.  Tesla has cut in half since this time last year.  All tech is down, and BTC is volatile.  Probably a much larger story.

[MU82]

I admit I don't follow crypto except the headlines. I haven't invested in it, and I don't see me ever investing in it. And I'd say that if it were up 70%. I'm generally more of a boring, more defensive, long-term, dividend-growing kind of investor.

The one thing that's become abundantly clear is that crypto is not a hedge against down markets or inflation.

I wish nothing but good fortune to those who have made it part of their portfolio.

[MU82]

And speaking of inflation ...

It came in at a better-than-expected 7.7% annual rate for October.

S&P 500 Futures, which had been flat, soared 3% in the minutes following the announcement.

Obviously, it's still some steep inflation. But it will be interesting to see if this convinces the Fed to go with a smaller raise (say .25%) or even stand pat at its December meeting.

[Hards Alumni]

I admit I don't follow crypto except the headlines. I haven't invested in it, and I don't see me ever investing in it. And I'd say that if it were up 70%. I'm generally more of a boring, more defensive, long-term, dividend-growing kind of investor.

The one thing that's become abundantly clear is that crypto is not a hedge against down markets or inflation.

I wish nothing but good fortune to those who have made it part of their portfolio.

Depends on where you live.  BTC is very advantageous to Turks since they're experiencing hyperinflation.  As are many other countries. 

In the US, it is being commercially invested in, and since it is considered highly liquid and volatile, it is one of the first to get removed from balance sheets.

[MUBurrow]

I'm not a huge crypto guy - I got burned a bit getting into COIN early but not enough to keep me up at night. I don't even directly own any crypto, as much out of environmental objection as anything.  But at these prices, I'm tempted to steer into the skid a bit. You don't have to think that every portfolio will own crypto in 2030 to make these prices attractive - you just have to think its not pets.com.

[JWags85]

Its remarkable someone hasn't taken away Sam Bankman-Fried's Twitter yet, or told him to STFU.  He's just making himself look worse and worse, and more potentially criminally negligent or liable.

[Hards Alumni]

Its remarkable someone hasn't taken away Sam Bankman-Fried's Twitter yet, or told him to STFU.  He's just making himself look worse and worse, and more potentially criminally negligent or liable.

It's actually pretty fun to see someone collapse in real time.

[forgetful]

It's actually pretty fun to see someone collapse in real time.

Going from a valuation of $32B and having your name on the Miami Heat Arena, to bankrupt in less than a year is crazy, and highlights some of the over speculation out there.