Gmthebeau
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Posts posted by Gmthebeau
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I am pretty new here and see the quality content I have been missing out on. A club of clowns digging thru the trash to find that last cigar butt or to afraid or don't understand how to invest in the future. Someone to wants to invest heavily in real estate because they dont scream out daily prices like the stock market. They feel its safer. Buffett pointed this out too years ago. Even Buffett stopped digging thru the trash decades ago. You guys are hilarious. Bye.
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When you can't win on facts you just say gibberish, spin what people, and act like a 3 year old. Works to become President, why not.
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6 hours ago, Gregmal said:
Nah man. 3 things. Inflation, TSLA, and MNRA. Book it. Withstands the rest of time. 100% of the time.
Village idiot right here. Book it and take that to the bank. I must to talking to one of the Trumps. Guy posts nothing that makes sense, has any reality to it, or any basis in fact. When you point it out he goes bonkers like a child.
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8 hours ago, ERICOPOLY said:
Then there has been another effect... the stock market. Take the area around Palo Alto. People there tend to create a new business and raise equity on the stock market. They give equity out to the employees.
Suddenly they are not only using their company's present earnings to buy housing, they're also using their share of all of its discounted future cash flows too.Agree that that area is unique, but thats not the majority of the US. Most people think housing is so high because they look at homes that are better than where they live, and ignore all the cheaper less desirable ones. People are living in those ones too.
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8 hours ago, ERICOPOLY said:
So, people are in fact priced out, yet prices still keep going higher despite that. And there's a reason...
My parents can afford pretty much anything in the Bay Area today, because they already live there and have done so since 1970. Many people who live there have done so for a long time. Once you are on the roller coaster, you can stay on it no matter how expensive it gets. Property taxes only climb a max 2% annually due to Proposition 13.
So every now and then somebody leaves... and that opens up a spot for one of the hundreds that are waiting for a house. Maybe it's dozens waiting, maybe it's hundreds, I don't know. Point being it's not 2 people bidding on one home. And it goes to the one with the most money.
It's the richest guy at the margin that decides Bay Area home prices.
Yes, there are unique cases like this but thats not the norm overall in housing across the vast majority of the US. In most cases supply meets demand. If you have overwhelming demand you get more supply via building or people selling their homes at top dollar and moving to a lower cost area.
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8 hours ago, IceCreamMan said:
Let's not forget about the land, which usually comes with the building. Land is not a depreciating asset.
Absolutely. The land is what is really valuable in most cases.
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16 minutes ago, ERICOPOLY said:
Incomes tracking inflation aside...
Scenario 1:
There are 1,000 people looking for housing and there are 1,000 homes for sale.
Scenario 2:
There are 1,000 people looking for housing and there are 500 homes for sale.
Scenario 2 will drive up homes faster than wage growth. The reason is that the homes in scenario 2 go to the 500 top earning out of the 1,000 households that are looking. They bid them up. Now you understand Bay Area pricing.
I agree scenario 2 would drive up prices faster for awhile but eventually people would be priced out and prices revert or go sideways until their wages support it. Bay Area might be a bit more unique because of Silicon Valley. As a whole CA is higher than inflation over 20 years but it’s not massively higher. The cure for high prices is typically high prices, in anything because people stop buying or trade down, or in some cases simply move. Aren’t there a lot of famous people who moved from CA to TX? Eventually that will have an impact.
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I don’t follow her, but just looked at her holdings. She doesn’t even own any MRNA, more nonsense!
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I posted exactly what you wanted a Florida housing price index. It didn’t fit your narrative so you just change the subject and post more nonsense. I am really done responding to you. Some people think they know everything and can’t learn. As the saying goes, you can lead a horse to water but you can’t make him drink. Good luck.
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10 minutes ago, Gregmal said:
EDIT: LOL I was actually in the process of responding but then I actually read your post and saw what you invested in, laughed really hard, and then decided to just move on. Cheers.
I am the one who can’t stop laughing. -
10 minutes ago, Gregmal said:
And FWIW since you know all the data and I clearly dont....would you please, pretty please, let me know how the Florida Housing Index(yes there's such a thing, I am sure you knew that though) did from 1998-2010? vs the other investment alternatives? Surely owning a FL home after those gnarly 35-50% destruction bomb crashes would have been devastating! Oh wait, maybe again you're misleadingly talking about absolute peak top to bottom drop? Ooooh, that helps with the narrative but not really. Anyway, the answer will surprise you(or maybe it won't since you know all the data and I dont)
2000-2021, a bit more than inflation. I should have really said house prices increase at inflation + 1%, maybe. -
4 minutes ago, Gregmal said:
Predictably again….”well back during the last crash”….durp.
Anyway, mid 90s buying and then selling at the bottom of the RE fallout from GFC 15-17 years later at more than a double doesn’t beat inflation? Ok pal. How did the index do from 1995-2010? Inflation! Hint SPY 1000 to SPY 1500….. durp durp.
Point me to all the people who’s incomes from 25 on have matched straight line inflation….not talking about career burger flippers either. At 25 I made 228k and at 26 I made 379k… inflation was crazy that year. Durp.
anyway, hopefully all you money is where your mouth is. Such conviction in starting to worry me! Otherwise….
Listen you clearly think you know everything and only come here to act pompous which you do well. 20 years and a double is about 3.5% a year which is around inflation. I’m surprised I got to do the basic math for someone of your “intelligence”. No idea why you reference the S&P 500 over any timeframe has nothing to do with the discussion. My money in MRNA as my largest holding. Rode most of TSLA gain too. Go back to your dumpster diving you don’t get investing in today’s world. -
2 hours ago, Gregmal said:
If you've ever lived in an area of desirability, you dont even need to bother rebutting something like that, you just know its preposterous. There's areas you want to invest in housing and areas you dont. Tell anyone who's owned Hoboken RE during the past 30-40 years "no better than inflation" LOL. Even in suburbia, buy a home for $400k in the mid 90s, sell it for $800k-$1m in 2010-15 is a story I can have verified by dozens of friends and acquaintances. From what Ive heard prime West Coast stuff is even nuttier. How bout Boca Raton or Ft Myers?
most Florida real estate dropped 35-50% during last housing crash. You clearly don’t know much about long term prices and trends. It’s easy to say it’s different this time. Even your examples are basically increasing at inflation, 400k to 800k in 20 years? Lol -
4 hours ago, ERICOPOLY said:
I have always been bidding on homes against the market. In my experience it has always been tied to income, not inflation.
most people’s income is tied to inflation, that’s why they get cost of living increases. There are always temporary events and time periods where things deviate but it’s just that temporary -
31 minutes ago, KJP said:
I took a quick look at this claim, and it certainly seems to have been true for a very long time (centuries). See, for example, the data on US, UK, and Amsterdam real housing prices reproduced here: https://valuabl.substack.com/p/housing-market-part-8-a-very-long
Two questions jump out from that long-term data:
1) What caused real housing prices to remain flat for such a long time? For example, if real gdp per capita rises over time, that long-term data implies people spending a smaller percentage of their income on housing over time. What did the percentage of income going to housing fall, rather than remain constant or rise?
2) What has changed (apparently throughout the US, UK, and Western Europe) over the last several decades to send real housing prices off the historical charts?
Is the real housing price time series going to mean revert back to zero growth, which would seem to imply either a significant nominal decline or a long period of price growth significantly trailing inflation? If so, why is that going to happen? I don't know the answer to question (1), so I don't know whether the underlying economic relationships that generated it still hold.
Over time housing rises with the rate of inflation due to the fact that its a depreciating asset. It does have to be maintained/upgraded to even keep up with inflation. Replacement costs driven by labor costs to build and the building materials themselves cause the prices to rise with inflation. It sometimes will rise faster due to speculation like the housing bubble we saw due to easy credit. Now we have super low rates that caused it to rise faster in 2020 and early/mid 2021. The rise appears to be over, but if not it will mean revert eventually.
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7 minutes ago, ERICOPOLY said:
Are there any divorce statistics available? Any links?
Anecdotally my wife and I know of a few couples who seemed to get along alright until they started working from home in 2020 due to covid-19. Now they are separated or divorced. Now each prior couple requires an additional housing units and it is typically a rented unit.
That kind of event can spur new household formation and I think it is reasonable to call it a one-off. Later, these free floating singles will eventually pair up again.
yes, this would be true that divorces would at least temporarily create demand. Like you pointed out, most of the time people seem to pair up again. Millennials are causing the divorce rates to plummet though so they get married later and stay married so far. Most of the divorces are people 55-65 now.
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I don't know. You guys seem to be talking about what's going on today, not what's likely to be going on in a few years. I have already seen housing sales slow dramatically. I have seen prices stop rising. Perhaps that will all change again but I doubt it, because most people buy a payment not a house. They can only afford so much. Interest rates will rise somewhat which will hurt demand at the margin. Maybe not dramatically but somewhat. The huge supply of multi-family coming will have an impact. I heard in 2005 we had a housing shortage too. We only have a housing shortage until prices rise enough to bring in more inventory, or interest rates rise enough to pull out buyers, or we have a recession and people lose their jobs and can't buy. Nobody is living on the street (who can afford a house) so I dont buy all the we have a housing shortage stuff. Just my take. a 100 years of data proves housing prices rise at the rate of inflation. It will rise slow or faster at certain times, but over the long run thats all it does.
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38 minutes ago, Ulti said:
Currently there are are 714 thousand multi-family units under construction. This is the highest level since 1974! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.
yea, anyone who wonders outside their house and drives around a bit can see multi-family being built like crazy. The people who were smart enough to build a few years ago are already cashing out as they see the mountain of supply coming. Ultimately, it will cause older units to drop rents to compete with newer ones. Supply always cures demand. Multi-family always overbuilds at the top. Its as old as time itself. There is nothing new.
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I am skeptical we are overbuilding single family, but I do think there is over building in multi-family. The supply has not come online yet, but there is a ton of it being built. Housing prices increase with the rate of inflation in the long run and thats it. This has been proven over and over by history. They might increase more rapidly in some parts of the country for awhile until they implode, but this has happened repeatedly. There is nothing new. Low mortgage rates caused them to increase very rapidly in 2020 and early 2021, but thats over. They are now topped out for awhile and will either drop in price or go sideways for awhile, IMO. I dont see them really increasing more. Home sales have slowed down dramatically from last summer. I agree bonds and cash are not real alternatives to hold long-term, so some people are comfortable putting more into a house. Younger people seem very comfortable with crypto through so I am not sure they will lever up a huge mortgage or most of them anyway.
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I don’t like the banks at all, but I’m more a long term investor. I did raise a lot of cash recently from FANG that I will redeploy gradually in other growth companies with more upside. If I was trading in and out a lot the banks might be ok here. Long term most of them have underperformed since GFC as they are so regulated now they can’t make the same returns. Also who knows what their loan books are.
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Many people really just dont want to work very hard these days, so they try to live as cheap as possible. I don't really know why, but I am guessing many of them grew up watching their parents work really hard, get divorced, and not be very happy in general. They figure why not try something else.
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15 hours ago, TwoCitiesCapital said:
I don't disagree that there will be an inflection point. I don't know when it will be. But I doubt it's in the next 6 months unless if China just dramatically mismanages this whole Evergrande default and it cascades.
My best guess is is mid-2020s. Demographic picture will be changing with millenials hitting high earnings years at a greater rate than boomer retirements. If there's a "green revolution", you'll see inflation from energy/transportation redesign and the associated utility scale investments. We might start seeing the impact of the simplification of supply chains and some globalization reversing. Etc.
By the middle of this decade, multiple disinflationary forces could be gone or reversed and only then do I think there's a significant inflation - which is what I imagine the bear market would be predicated on.
Until then - I imagine it'll be a lot like the two dips we saw in 2018 on the one in 2020. Fast/deep corrections, much faster than historical ones, but ultimately we recover from them in just a few months time. Still keeping elevated cash with this outlook though - always could be wrong on the timing.
I think its likely we see something like you said what happened at the end of 2018 or March 2020. While it may be fairly quick meaning not years a drawdown of 20-30% in the indexes typically means many stocks will fall 50%. I would rather be a buyer than fully invested going into something like that. Its interesting that some people think cash is stupid while their hero Buffett holds huge amounts just for that purpose to buy when their is blood in streets. You simply can't do that when you are always fully invested. Its about risk management. An individual investor has a big advantage of being able to move in and out very quickly. You dont have a mandate to remain fully invested like an ETF or mutual fund. Giving up that advantage strikes me as not the best idea.
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On 10/6/2021 at 6:16 PM, Spekulatius said:
Mr Market is a like drunk, going forward and backwards and not getting anywhere. Typically not a good sign at current elevated levels, Imo.
agree, I raised my cash position recently to highest ever. We will find out in a few weeks probably if it’s going to roll over or ramp higher. Margin hit an all time high last month. If it starts dropping its lights out.
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Raised alot of cash, sold AMZN, MSFT, GOOG and many others.
Zelman on housing
in General Discussion
Posted
LOL.
TSLA up over 11% TODAY. Hit $1 trillion in market value.
MRNA up over 5% TODAY.
You should not talk about things you don't understand. It's "better to keep your mouth shut and appear stupid than open it and remove all doubt" Boom!