Zelman on housing

[ERICOPOLY]

And it explains why housing prices didn't keep pace with inflation in areas of Michigan when the automakers went elsewhere.  Nobody brought out the CPI when pricing those homes.  The incomes were gone.

 

[Gregmal]

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? 

[ERICOPOLY]

I think back in the day the village bard in 1500 made the same inflation adjusted that he made in 1600.  So real estate tended to stay the same.  Population creep was controlled by medieval medicine.

 

Now we have governments messing with minimum wage and the bard joined Led Zeppelin, etc...

Edited October 20, 2021 by ERICOPOLY

[Gmthebeau]

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 

[Gmthebeau]

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

[Gregmal]

17 minutes ago, Gmthebeau said:

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

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….

 

 

 

 

Edited October 20, 2021 by Gregmal

[Gmthebeau]

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.

[Gregmal]

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)

[Gregmal]

Just now, Gmthebeau said:

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.

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. 

 

[thepupil]

My parents first house they bought in Fort Lauderdale in the 80’s was $40K. Steps from the ocean, infested with snakes and cockroaches .
 

Then that coke money poured in to SoFla and the rest is history!!*
 

 

*parents were actually wiretapped because a tenant was dealing, house got raided lol

[Gregmal]

Just now, thepupil said:

My parents first house they bought in Fort Lauderdale in the 80’s was $40K. Steps from the ocean, infested with snakes and cockroaches .
 

Then that coke money poured in to SoFla and the rest is history!!*
 

 

*parents were actually wiretapped because a tenant was dealing, house got raided lol

Musta got that Berkshire style inflation!

[Gmthebeau]

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.

[Gmthebeau]

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.

[Gregmal]

Laughing at what? You barely post anything here and then out of the blue come out here making these ridiculous claims, IE wages are pegged to inflation and so are housing prices....changing goalposts and misrepresenting timelines, IE I generally state that during period of whatever in mid 90s folks in good areas bought homes and then at the bottom of a real estate crash sold them for between 100-150% profit and you claim this is a 20 year period and that it barely beat inflation, and then say it beat inflation but not by much(LOLz). Then you post some crap about how you own these piker stocks even though you never really post much here...and then you post your Yahoo stocks! watchlist LOL! Everyone knows when I buy and sell stuff cuz I post it. The APTS thread tells you everything you need to know and otherwise I dont really care what claim you make if theres no transparency or track record. You bought BTC at 1000 sold it at 18000 then rebought it at 3000 and still hold it too, right? 

 

I like to be transparent. I dont really care what piker crap you claim you bought or time periods of zero relevant that you post on your sophisticatedly crafted Yahoo Finance charts....I dont generally post this stuff but you're special so I'll treat you special. I only have the below attachment on my phone cuz a whiny investor wanted it a while ago. But Q3 MF REIT kinda crushed it as did energy. So you'll have to bear with me. Hopefully one day I can be like you. 

 

 

 

[Gregmal]

I mean even the sheer dumbness of “only tracks inflation”….so…. Isn’t that kind of what you’d want to own heading into a period of inflation LOL

[Gmthebeau]

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.

[Gregmal]

Cathy Wood has some Kool-Aid for you. Stay thirsty my friend!

[Gmthebeau]

I don’t follow her, but just looked at her holdings.  She doesn’t even own any MRNA, more nonsense!

 

https://ark-funds.com/wp-content/uploads/funds-etf-pdf/ARKK-holdings-1634780999-4044718315210715671.pdf

 

[ERICOPOLY]

3 hours ago, Gmthebeau said:

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 

 

Sad fact is that our investment horizons are temporary.

 

And it's not just one income...  it's two now.

[ERICOPOLY]

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.

 

[ERICOPOLY]

It's either drive home commuting for hours each way to and from Vacaville or bite the bullet and outbid somebody for a Bay Area home.

 

Then covid hit and people could work remotely and it was like a mushroom cloud on the housing prices in Sacramento.  Suddenly they were bidding the crap out of our housing stock and my house is suddenly up nearly a half million or so.

[Gmthebeau]

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.  

[ERICOPOLY]

4 minutes ago, Gmthebeau said:

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.  

 

Yes there are a bunch of people leaving but that occurs from time to time.  Oregon, Washington, Idaho, Arizona for decades have seen an influx of Californians.  It's what we do.  We get the heck out of here when we can.  

 

But it never seems to be a lasting trend because it's still desirable despite the taxes.  And we don't have a Texan running the state so there's that.  Nobody's ratting out their neighbors for having an abortion just to get a bounty.

Edited October 21, 2021 by ERICOPOLY

[ERICOPOLY]

And the 20 years of housing inflation from 1970 to 1990 was far more dramatic in California than the last 20 years.

[ERICOPOLY]

10 minutes ago, Gmthebeau said:

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.  

 

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.