The next domino has fallen and its a big one

[Celticguy]

https://www.cnbc.com/2022/08/18/hom...s-housing-market-slides-into-a-recession.html

Housing market now in recession.

Whole lot of Americans (and as many or more illegals) are going to be out of work very soon as housing starts crash. From construction and related trades to real estate to finance to manufacturing, raw material and transportation name a few are all dependent upon housing chugging along.

One possible silver lining is that the last time we saw an exodus of illegals OUT of the country due to no work.

But this, while predicted, is still very bad news and especially for SLow Joe as he wont even have his employment straw to hang onto.

Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors.The sales count declined to a seasonally adjusted annualized rate of 4.81 million units, the group added. It is the slowest sales pace since November 2015, with the exception of a brief plunge at the beginning of the Covid pandemic.


Sales dropped about 20% from the same month a year ago.
“In terms of economic impact we are surely in a housing recession because builders are not building,” said Lawrence Yun, chief economist for the Realtors. “However, are homeowners in a recession? Absolutely not. Homeowners are still very comfortable financially.”
The July sales figures are based on closings, so the contracts were likely signed in May and June. Mortgage rates spiked higher in June, with the average rate on the 30-year fixed loan crossing 6%, according to Mortgage News Daily. It then settled back into the high 5% range. That rate started this year around 3%, so the hit to affordability in June was hard, especially coupled with soaring inflation.

 

[BartenderElite]

The housing crash has been building for many years. I think literally everyone who pays even the smallest bit of attention to the economy anticipated this, and is ready for it.

It actually HAD to happen. The growth of that market was flawed and unsustainable.

But thanks for the news.

 

[Matt Dillon]

The housing crash has been building for many years. I think literally everyone who pays even the smallest bit of attention to the economy anticipated this, and is ready for it.

It actually HAD to happen. The growth of that market was flawed and unsustainable.

But thanks for the news.

Will it happen in time for tax time? Asking for a friend.

Will it make municipalities charge less on taxes? Because that's what's driving everything fucking everyone who pays for the cost of housing in America. Local government greed.

 

[Celticguy]

Will it happen in time for tax time? Asking for a friend.

Will it make municipalities charge less on taxes? Because that's what's driving everything. Local government greed.

Well thats half a year of inactivity so far less new construction to ramp up property taxes so that will hurt. Will it make them raise or lower tax rates ? Hard to say since there is a broad spectrum of stupid in local pols but it will impact school (and other local) budgets and not in a good way so bad news for teachers.

 

[Celticguy]

The housing crash has been building for many years. I think literally everyone who pays even the smallest bit of attention to the economy anticipated this, and is ready for it.

It actually HAD to happen. The growth of that market was flawed and unsustainable.

But thanks for the news.

Your boy Slow JOe is certainly ignoring it. But yes not in the least bit surprising.

 

[Matt Dillon]

Well thats half a year of inactivity so far less new construction to ramp up property taxes so that will hurt. Will it make them raise or lower tax rates ? Hard to say since there is a broad spectrum of stupid in local pols but it will impact school (and other local) budgets and not in a good way so bad news for teachers.

How much before the peaople say "Enough!" I tell you this, it's insane right now and double what it was it was when I was a young man.

People pay twice as much of their income for housing costs in America as they should and as they classically have done.

2 hours of work gets you a room for the night. Make it 8 and you have food and saving money. That's how America used to be.
Now it's 2 days of work just for 1 day housing. That's upside-downey, as my uncle used to say.

Seriously. That's unsustainable.

 

[T. A. Gardner]

Part of the blame for this falls on the Joke administration as well. Not all of it, but part it.

The Joke administration has skewed the housing market by forcing and incentivizing certain types of new housing construction over letting the market decide what to build.

They did this through HUD programs that subsidize multifamily housing projects like duplexes, 4 unit, or less, small apartment complexes, building rental properties on existing single family home lots, and disincentivizing the single-family starter home in a subdivision-style development. They also have given incentives to do urban in-fill rather than build suburbs to an existing city.

This has led to an increase in apartments and other rental properties while driving up the cost of a shrinking market of single-family homes. The rise in the cost of the later is obviously driven by people continuing to want to buy single-family homes over renting or living in a high-density urban setting. But the current market is often forcing the later on people who would quickly choose otherwise if they could.

As usual, when prices are driven up quickly, at some point there will be a market correction and prices will drop again to some extent but not back to where they were pre-bubble. The worst part of this round of price increases is in apartment rents. These have become onerous and are limiting people's ability to save or acquire the funds to own rather than rent. It has, in turn, greatly increased the number of evictions across the US with the resulting destruction of people's credit so they are now doubly fucked by bad government policy.

 

[Lionfish]

The housing crash has been building for many years. I think literally everyone who pays even the smallest bit of attention to the economy anticipated this, and is ready for it.

It actually HAD to happen. The growth of that market was flawed and unsustainable.

But thanks for the news.

Bullshit. It is the interest rate that is the largest contributor to a housing crash. By the time this is over we can expect to see home mortages at 8%. This drives up rent and further adds to inflation. Your boy has fucked up everything he has touched. Hard for me to believe it is not intentional. A first year accounting student is capable of making better choices.
We can discuss what increasing interest rates do to the national debt at a later time or all you have to do is go back to what happened during the reign of the peanut farmer.

 

[domer76]

Bullshit. It is the interest rate that is the largest contributor to a housing crash. By the time this is over we can expect to see home mortages at 8%. This drives up rent and further adds to inflation. Your boy has fucked up everything he has touched. Hard for me to believe it is not intentional. A first year accounting student is capable of making better choices.
We can discuss what increasing interest rates do to the national debt at a later time or all you have to do is go back to what happened during the reign of the peanut farmer.

Money was essentially free for a long time. Now it’s not. Economic cycles. Big fucking deal.

 

[BartenderElite]

Bullshit. It is the interest rate that is the largest contributor to a housing crash. By the time this is over we can expect to see home mortages at 8%. This drives up rent and further adds to inflation. Your boy has fucked up everything he has touched. Hard for me to believe it is not intentional. A first year accounting student is capable of making better choices.
We can discuss what increasing interest rates do to the national debt at a later time or all you have to do is go back to what happened during the reign of the peanut farmer.

BDS

 

[Celticguy]

How much before the peaople say "Enough!" I tell you this, it's insane right now and double what it was it was when I was a young man.

People pay twice as much of their income for housing costs in America as they should and as they classically have done.

2 hours of work gets you a room for the night. Make it 8 and you have food and saving money. That's how America used to be.
Now it's 2 days of work just for 1 day housing. That's upside-downey, as my uncle used to say.

Seriously. That's unsustainable.

well to be fair had a great aunt in Delaware that had to go out on her porch to pump water from her well and whose bathroom was outdoors.

we had no a/c in the house I grew up in (got a window unit when I was a teenager (I was the youngest of 4), one TV, no cable and the dog slept outside (unless it was really cold then he got the unheated basement).

housing is nothing like the good old days so no mystery it runs us more.

how long till the people snap ? well aint that the $64,000 question ! could be as early as November. Americans do not like inconvenience much less actual pain. a lot more dominos are going to fall and pretty damn soon (pent up foreclosures that were held up by covid), new foreclosures on people in housing losing their jobs, food shortages and skyrocketing prices mean hungry people who are ALWAYS grumpy.

and I see oil has taken to rising again.

it just gets worse and worse all thanks to slow joe

 

[T. A. Gardner]

well to be fair had a great aunt in Delaware that had to go out on her porch to pump water from her well and whose bathroom was outdoors.

we had no a/c in the house I grew up in (got a window unit when I was a teenager (I was the youngest of 4), one TV, no cable and the dog slept outside (unless it was really cold then he got the unheated basement).

housing is nothing like the good old days so no mystery it runs us more.

how long till the people snap ? well aint that the $64,000 question ! could be as early as November. Americans do not like inconvenience much less actual pain. a lot more dominos are going to fall and pretty damn soon (pent up foreclosures that were held up by covid), new foreclosures on people in housing losing their jobs, food shortages and skyrocketing prices mean hungry people who are ALWAYS grumpy.

and I see oil has taken to rising again.

it just gets worse and worse all thanks to slow joe

Part of the blame goes to an ever increasing amount of building code, construction requirements, and government involvement in construction too. These add costs in time and materials to constructing a home today.

 

[Jarod]

https://www.cnbc.com/2022/08/18/hom...s-housing-market-slides-into-a-recession.html

Housing market now in recession.

Whole lot of Americans (and as many or more illegals) are going to be out of work very soon as housing starts crash. From construction and related trades to real estate to finance to manufacturing, raw material and transportation name a few are all dependent upon housing chugging along.

One possible silver lining is that the last time we saw an exodus of illegals OUT of the country due to no work.

But this, while predicted, is still very bad news and especially for SLow Joe as he wont even have his employment straw to hang onto.

I am hoping the prices drop significantly, I am ready to buy some deals..

 

[Celticguy]

Part of the blame goes to an ever increasing amount of building code, construction requirements, and government involvement in construction too. These add costs in time and materials to constructing a home today.

excellent point.

and people who wonder why nobody builds affordable housing can thank the govt because its exactly this that caused it.

had a neighbor who was a slum lord but his tenants loved him because he kept his places up and would work with them in hard times. in turn they did NOT trash the properties and made for fer good tenants. thing is he was from the slums, quit school at 4th grade and made his own way so he knew his tenants and how their lives were and they knew it.

but city govt started going regulation happy and rendered it impossible to make any money running these properties.

my best friend was his grandson and he was grooming him to take over the business but he had to say no because there was just no future in it.

government is the problem, not the solution.

 

[Matt Dillon]

excellent point.

and people who wonder why nobody builds affordable housing can thank the govt because its exactly this that caused it.

had a neighbor who was a slum lord but his tenants loved him because he kept his places up and would work with them in hard times. in turn they did NOT trash the properties and made for fer good tenants. thing is he was from the slums, quit school at 4th grade and made his own way so he knew his tenants and how their lives were and they knew it.

but city govt started going regulation happy and rendered it impossible to make any money running these properties.

my best friend was his grandson and he was grooming him to take over the business but he had to say no because there was just no future in it.

government is the problem, not the solution.

The government is blocking affordable housing. Why should they even be paid taxes when they're doing nothing and fucking everybody?

 

[Celticguy]

I am hoping the prices drop significantly, I am ready to buy some deals..

yes they will. trouble is they wont regain their previous values and unless you have cash you're going to have to chase a lot more ambulances to pay the debt service.

 

[Celticguy]

The government is blocking affordable housing. Why should they even be paid taxes when they're doing nothing and fucking everybody?

so the people that own them can continue to empty the govt teat.

that is the intended purpose of govt after all.

 

[Matt Dillon]

well to be fair had a great aunt in Delaware that had to go out on her porch to pump water from her well and whose bathroom was outdoors.

we had no a/c in the house I grew up in (got a window unit when I was a teenager (I was the youngest of 4), one TV, no cable and the dog slept outside (unless it was really cold then he got the unheated basement).

housing is nothing like the good old days so no mystery it runs us more.

how long till the people snap ? well aint that the $64,000 question ! could be as early as November. Americans do not like inconvenience much less actual pain. a lot more dominos are going to fall and pretty damn soon (pent up foreclosures that were held up by covid), new foreclosures on people in housing losing their jobs, food shortages and skyrocketing prices mean hungry people who are ALWAYS grumpy.

and I see oil has taken to rising again.

it just gets worse and worse all thanks to slow joe

I had A/C in Miami. Yeah, it came on about maybe 4x a year. Nothing like today.

I was jealous of people with jalousie windows. Had to look that up to spell right.

 

[T. A. Gardner]

excellent point.

and people who wonder why nobody builds affordable housing can thank the govt because its exactly this that caused it.

had a neighbor who was a slum lord but his tenants loved him because he kept his places up and would work with them in hard times. in turn they did NOT trash the properties and made for fer good tenants. thing is he was from the slums, quit school at 4th grade and made his own way so he knew his tenants and how their lives were and they knew it.

but city govt started going regulation happy and rendered it impossible to make any money running these properties.

my best friend was his grandson and he was grooming him to take over the business but he had to say no because there was just no future in it.

government is the problem, not the solution.

I'm putting an 8' long counter with cabinets under it in my basement at the moment. If I had to pay a contractor(s) to come in and do it including--

Construct the stub walls
Install the cabinets
Wire the counter for lighting and power
Drywall
Install a countertop (haven't decided on what I'll put in quite yet)
Trim and finish

I'd bet it'd run close to $10,000 in labor and materials, maybe as much as $12,000. My cost doing it myself by knowing how to do it right to code, is going to run about $3000 in materials total. People simply cannot afford to have stuff done like that unless they're pretty well off.

GC's like me to do electric for them because I'm affordable only because I need the exercise not the money. I can run permits when necessary, do the drawings and such too. That saves them a ton over having to hire an engineer and do the permits themselves. I'm waiting right now to hear back on two service panel upgrades and rewiring one of the worst do-it-yourself house / additions I've ever seen (this house is plugged into an RV-style service and one of the two subpanels in the house is ungrounded and undersized wire supplying it).

 

[Celticguy]

I had A/C in Miami. Yeah, it came on about maybe 4x a year. Nothing like today.

I was jealous of people with jalousie windows. Had to look that up to spell right.

my aunt and uncle lived somewhere near Cape Canaveral (uncle worked there) and I remember being so impressed (and thankful) that they had central air and a pool.