Inflation here? gas/grocery prices just continue to climb (3 Viewers)

[DaveXA]

Retailers are finally cutting prices. Will it last?

Consumers have been waiting for lower prices for what seems like forever. And now costs are finally going down. (Some of them, at least.) After a years-long run up in prices that’s caused many to pull back on spending, things are finally beginning to get cheaper.Subscribe to The Post Most...

www.yahoo.com

Wake me up when housing costs go down.

 

[SaintInBucLand]

Wake me up when housing costs go down.

You make a good point. Because we have been told that this round of inflation was more about corporate greed rather than inflation itself, but since a large majority of single family homes are owned by individuals and families, why have we seed such inflation in housing prices like we have in the retail sector. If inflation was due to corporations then wouldn't housing prices not have gone higher(especially with finance rates being higher).

 

[efil4stnias]

You make a good point. Because we have been told that this round of inflation was more about corporate greed rather than inflation itself, but since a large majority of single family homes are owned by individuals and families, why have we seed such inflation in housing prices like we have in the retail sector. If inflation was due to corporations then wouldn't housing prices not have gone higher(especially with finance rates being higher).

housing prices are directly related to supply and demand. Builders arent building spec homes like they once did ( most of my custom home builders are down to 1-2 spec homes per year vs 5-10 just 4 years ago ) because if they dont sell within 12 mo, that 12 mo construction loan is up and they have to either unload at a loss or refi at current COMMERCIAL rates ( cant get a personal loan rate )
So the inventory of new options dwindles, leaving sellers of existing homes with leverage to ask whatever they can get for home. Well above nominal price.
Specific to our area, what was once a $300,000 home now goes for close to $400,000. And if you are south of I12 that same home insurance USED to cost $1800-2500 is anywhere from $5000-8000 or more, depending on different factors. That changes everything, especially for buyers who were very close to crossing the line of affordability on just the mortgage note excluding Insurance and Taxes.

Inflations cause doesnt necessarily affect housing costs- they can ( and do ) act independent of each other at times.

When housing supply exceeds demand, when mortgage rates begin to drop below 5%, you will begin to see prices drop.

let me add - that is an insanely simplistic summary of macro. When you start to look at the micro environment, so many other factors come into play as well ( sorta like my mention of insurance/taxes here locally )

Another factor is land. Metropolitan areas are simply running out of land to develop. Its already developed and built upon. Only option there, tear down and rebuild which adds to the cost of new build.

 

[guidomerkinsrules]

You make a good point. Because we have been told that this round of inflation was more about corporate greed rather than inflation itself, but since a large majority of single family homes are owned by individuals and families, why have we seed such inflation in housing prices like we have in the retail sector. If inflation was due to corporations then wouldn't housing prices not have gone higher(especially with finance rates being higher).

Millions of people lost their homes to foreclosure during the 2008 financial crisis, as small-time homeowners suffered the costs of years of predatory mortgage lending by big banks. Many of those homes were bought up by investors — the first time so-called mega-investors had ever entered the single-family home market. Over the next decade, Wall Street interests would buy hundreds of thousands of homes, contributing to the rapid growth of single-family rentals owned by corporate landlords.
..,

The trend accelerated during the COVID-19 pandemic when low interest rates and rising real estate prices spurred investors to expand their portfolios. By 2022, investors accounted for nearly 30 percent of sales of single-family homes, up from an average of 16 percent just three years earlier. In some cities, institutional investors account for a far higher share of single-family homes.

 

[guidomerkinsrules]

 

[bigdaddysaints]

You make a good point. Because we have been told that this round of inflation was more about corporate greed rather than inflation itself, but since a large majority of single family homes are owned by individuals and families, why have we seed such inflation in housing prices like we have in the retail sector. If inflation was due to corporations then wouldn't housing prices not have gone higher(especially with finance rates being higher).

the corporate greed kicked in and they used inflation as an excuse to up price even more, and when the inflation got out of control they raised interest rates to slow spending, and it hurt the housing market. so yes the corporate greed has their hand in the housing market.

 

[guidomerkinsrules]

so yes the corporate greed has their hand in the housing market.

I don’t think hand is the appendage they use

 

[bigdaddysaints]

I don’t think hand is the appendage they use

well, the TOS and all..lol

 

[Bayouboy]

Millions of people lost their homes to foreclosure during the 2008 financial crisis, as small-time homeowners suffered the costs of years of predatory mortgage lending by big banks. Many of those homes were bought up by investors — the first time so-called mega-investors had ever entered the single-family home market. Over the next decade, Wall Street interests would buy hundreds of thousands of homes, contributing to the rapid growth of single-family rentals owned by corporate landlords.
..,

The trend accelerated during the COVID-19 pandemic when low interest rates and rising real estate prices spurred investors to expand their portfolios. By 2022, investors accounted for nearly 30 percent of sales of single-family homes, up from an average of 16 percent just three years earlier. In some cities, institutional investors account for a far higher share of single-family homes.

I don't have the article to reference, but I read something recently that laid out what you are saying here. There's a huge push nationwide that has investors picking up every spare home on the market which drives prices up. Pretty soon, the American dream of owning a home will be out of the grasp of many Americans.....even those with decent jobs.

 

[DaveXA]

I don't have the article to reference, but I read something recently that laid out what you are saying here. There's a huge push nationwide that has investors picking up every spare home on the market which drives prices up. Pretty soon, the American dream of owning a home will be out of the grasp of many Americans.....even those with decent jobs.

We're already there in many areas to a large degree. The American dream ain't what it used to be in terms of financial security/freedom.

 

[DavidM]

I don't have the article to reference, but I read something recently that laid out what you are saying here. There's a huge push nationwide that has investors picking up every spare home on the market which drives prices up. Pretty soon, the American dream of owning a home will be out of the grasp of many Americans.....even those with decent jobs.

I posted this earlier in the thread but this is the indifferent, greed-driven mindset that homeowners are up against. Following is a quote from Gary Berman, CEO of Tricon, a large corporate landlord company, which owns tens of thousands of single family homes in the United States.

Berman believes younger Americans prefer to rent over purchasing a home.

"I think if you asked a lot of millennials, and that tends to be our primary resident — they would probably tell you, they don't necessarily desire to own a home or to own a car," Berman said. "They've grown up in the sharing economy."

High mortgage rates, lack of supply, and wealthy investors put home hunters in a bind

mynbc15.com

We need to quit thinking in absolute terms that capitalism (any economic system) is all good or bad, and instead, understand that well-regulated capitalism works the best for the most number of people. The very ones who have terrified people into believing that regulations are bad, and anything that challenges the merits of capitalism is evil socialism, are the ones who gain the most. Of course they want as little oversight as they can coerce officials into enacting. The status quo is what lines their pockets while the American Dream of purchasing a home has become something a growing number of people either have to put off much longer, or can only dream about from their leased dwelling.

 

[Mr. Blue Sky]

The American dream ain't what it used to be in terms of financial security/freedom.

The American dream in 2024, IMO, if you are willing and able - is to get the heck OUT of America post haste……

 

[guidomerkinsrules]

Wake me up when housing costs go down.

 

[DaveXA]

Well, I'm not moving there anytime soon, lol.

 

[guidomerkinsrules]

Well, I'm not moving there anytime soon, lol.

Just hoping it’s the beginning of a global trend