ERICOPOLY

Is the shortage of labor driven by an excess of demand or an excess of retirements? https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/employers-face-hiring-challenge-as-boomers-retire-in-record-numbers.aspx Baby Boomers are leading the exodus, as 3.2 million more of them retired in the third quarter of 2020 than did in the same quarter of 2019.

It's a matter of priorities. Irrigated agriculture is the largest user of water in Arizona, consuming about 74 percent of the available water supply. https://new.azwater.gov/conservation/agriculture#:~:text=Irrigated agriculture is the largest,of the available water supply.

Politicians discouraging immigration. Boomers retiring. Fed cannot control these things.

The Fed cannot control the labor shortage unless it pulls out an iron bar to hit the economy with.

A lot of what we have to thank is the 'mother of all fears' from the 1982 P/E.

Just to share my experience from this past 11 days, my ATM puts have outperformed my OTM puts. I have Oct 429 strike SPY puts that are now up 110%. But my OTM puts are Nov $390 (up 55%) and March $362 (up 45%) so it could be the longer expirations that are holding them back.

Zillow has this on my house's listing: "We estimate this home will sell faster than 87 % nearby." It has been 2 full weeks now and we've had only one agent request a showing, and that was the day after we listed it. On Sunday we had an open house and only 5 couple showed up, all from the Sacramento region. None from the Bay Area. Unfortunately, homes like this one normally are supported by Bay Area buyers. It was those buyers that pushed prices up in the first place.

Makes sense. But why the $2 discrepancy?

Zillow's pricing algorithm for my house... Yesterday it was take asking price of $1,825,000 and add $24. Zillow estimate: $1,825,024 Today it is take asking price of $1,695,000 and add $2. Zillow estimate: $1,695,002 Question: did dropping the price $130,000 make Zillow feel more confident in our asking price so they narrowed the gap from $24 to just $2? Why is asking price the input that Zillow uses for value?

The rate is 2.8%. It was a cash-out refi loan for $880,000. The cash-out penalized the rate, as did the loan size.

We bought it 3.5 years ago for $1.18m. I could see the market not wanting to pay more than $1.4m. I'll find out one of these days.

We are cutting price from $1.825m to $1.695m. I can't say whether that will change a goddam thing though. There are simply very few people shopping for homes like this one. 5 bedroom in a gated community of luxury homes.

It isn't just us, the other agents with listings are saying the same. So we're cutting price because what else can we do with growing inventories and a dwindling pool of buyers? You have to be the most attractively priced.

Well, at least at the high end, the Sacramento area housing market is toast. The buyers have simply vanished. Our home is in great shape and we've had ONE agent request a showing and we've been listed for 13 days.

I haven't heard of him, but I scrolled back on his Twitter feed and looked to see if this guy is an oracle or something:

What stocks are the most exposed to a housing drop of 15%+?

However the alternative has mistreated them lately -- what were rents two years ago vs today? This period of rapidly rising rents should have weakened their love of renting. They should be feeling insecure as renters.

We already have a $90,000 house in Dunsmuir in a great location that we bought with cash earlier this year. What we want to do is purchase a second home in San Luis Obispo, walking distance to downtown, ideally a 2 bedroom with about 1,000 sqft with a small mortgage (so the rate doesn't really matter). We can buy that home only if we sell our current one. And that's the dilemma.

You are correct about the hoarding. My parents are doing that (they bought in 1970 in Los Altos Hills). The step up in basis for the capital gains tax is the icing on the cake -- when the first spouse dies the surviving spouse can sell the home free of capital gains tax.

My house is in California. The property tax would be 50% higher if I bought it today (I bought it 3 years ago).

My house is on the market because we don't need the extra bedroom anymore and don't like living with an HOA and don't like gated communities. We are downsizing from a 5 bedroom owned home to a 4 bedroom rental. If it doesn't sell for close to asking price I'm contemplating renting it out. Zillow's rental estimate is like $6,600 per month for the house we are selling, and the rental house a few miles away that we're beginning to move into this weekend is $3,800 per month with landscapers included. Our mortgage is $3,600 a month. So if we can truly get $6,600 a month for the one we own, our rental income would almost cover our mortgage and the rent on the home we'll be living in. This is only possible because our mortgage rate is around 2.8% and because we have about 60% equity in the home -- those two factors are keeping our mortgage small relative to prospective rental income. And a lot of families DO have at least 60% equity in the home. Anyways, if the buyers are on strike (and it increasingly looks like they are), I am contemplating waiting them out instead of giving them their price. What motivates me to go through the hassle of being a landlord again is this juicy 2.8% rate that I don't want to let go of. So I'm projecting this mentality when I ponder whether sellers will decide to rent out their homes and keep their low mortgages instead of dumping their homes onto a soft market.

There's no question that payments are like 35% higher with the interest rate spike. But there should be fewer sellers willing to sell as well, because selling one home means finding another and they may not qualify for as nice/large a home, so that can make them sit tight. Which should impact labor mobility and keep a lid on selling pressure.

So, in theory, would single family housing rental stock increase as homeowners with the 30 yr fixed 2.8% mortgages choose to hang onto those homes and rent them out instead of sell them?

It's a good point that it encourages leverage.

The per capita income is $270 in Burundi. What constitutes an overpriced housing market in Burundi? People have this notion that housing follows inflation but it follows income.