THE WOLF STREET REPORT: It’s a Perfect Time to Sell a Home (to FOMO-Addled Buyers)

And for buyers, it’s a Perfect Time to make a Terrible Deal. The winner in these crazy bidding wars is the seller. (You can also download the WOLF STREET REPORT wherever you get your podcasts).

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  241 comments for “THE WOLF STREET REPORT: It’s a Perfect Time to Sell a Home (to FOMO-Addled Buyers)

  1. Michael says:

    Sane words in an insane time.

    • Shandy says:

      Didn’t Reagan Nomics make home buying a losing proposition?

      • Nacho Libre says:

        Reagan Nomics? Please would you like to explain your understanding of that phrase?

      • roddy6667 says:

        I made the most money in my life during the Reagan years, I did it by owning houses and also by being a Realtor. What color is the sky in your world?

    • Tony says:

      We likely have 2-3 more years to go before the peak in real estate.
      Real estate has remarkably clock-like, predictable 18 year cycles (for almost a century). Search “18 year real estate cycle”.
      Minimum cycle has been 17 yrs, max around 21.
      Anyway, the previous real estate peak was 2006, so the next will be somewhere from 2023-2025.

      • Mike says:

        We are at the peak as mortgage forbearance will end in July 2021 and listing most li,likely, will surge.

      • Educated but Poor Millennial says:

        I read an article in MarketWatch saying:

        Home prices surge 12% in February, the biggest jump since 2006 — a $35,000 gain for median-priced homes

        Not sure why we have different information from different sources.
        Here we saying the prices came down in February.

  2. Maddie says:

    I would LOVE to sell my current house to a FOMO buyer. But then what? I would need to live in my car (not doing THAT) or find some overpriced place to rent for a year (or more) until the market corrects?

    • Wolf Richter says:

      Maddie,

      This was about selling the second homes people keep to ride up the price explosion.

    • Ralph Hiesey says:

      Maddie

      Our strategy: not sell the one house I and wife own.

      Look at two possibilities if we sold our house and rented instead:

      Upside if very little inflation: We would double our cash. WE’RE RICH! But already have plenty to live a modest life with nice place to live. We would then have more cash in retirement than we could possibly need. Conclusion: no real upside.

      Downside if high inflation. No place to live. Most money gone. Not enough money for our modest lifestyle including rent. “Real downside.”

      Conclusion: Avoid greed. Don’t sell.

      • YuShan says:

        In general, you shouldn’t speculate with things that you need, because any loss or profit taking has a direct effect on your life. For that reason, I have always struggled with the idea of a home as an investment

      • Swamp Creature says:

        People who speculate on the roof over their heads and don;t have to are the dumbest people on the planet.

    • Cmoore says:

      I would say buy an rv and see the country or find a local rv park to ride out the storm, but most rv parks are full. You could park it on your land you buy but land has gotten expensive. Not many options today. If you have a house just be thankful….

      • Mike G says:

        A lot of people traveling in RVs and camping since the pandemic. A lot of people traveling in general, I’ve noticed hotels filling up in the last couple of months.

  3. Cobalt Programmer says:

    Wolf: Never in my life I have seen…
    Life: Little did he know…

    Buyers are the winners because, their house will worth 100x more with the current and future money printing. Most house owners will own two homes. Do you know 25% of all the dollars in circulation are printed last year alone? The only superpower that can bring sanity is the interest rates. Before that, we will try printing more money to reduce inflation.

    we all think there is good and justice. There is no honor among thieves either. Everyone out for themselves. Its money all the way. Eat or get eaten. Dog eats dog world.

    • Alku says:

      Everybody understands what is going on, and like Jon W said in the below comment, “For many of us we are forced to play their game.”
      However, it’s the momentum that matters. When it wanes and the peak is reached, the sentiment may change on a dime, and the pullback will gather the same momentum – regardless of all the printing.

    • economicminor says:

      Interesting, according to the math and theories presented by people like Dr Lacy Hunt, the out come will be deflation and not forever inflation.

      According to the charts of history presented by people like DiMartino Booth and Steven Van Metre, all that money is neither printed nor is it in circulation. How do you get inflation with declining circulation? We still have almost 18 million collecting UE Insurance… Plus all those who have just fallen by the way side..

      According to some, most of the *money* created is trapped inside the banking system held in reserves and that can not create inflation..

      Inflation is coming from magical thinking and speculation. Much of it on margin or borrowed against the imaginary worth of inflated assets.

      So then IF Hunt, Booth, Van Metre and others are correct, QE and stimulus gives us a sugar high and then it’s gone leaving behind the debt that still needs to be serviced.

      A few years ago, it was a trillion$ to keep us from going down. Last year it was what 5 trillion$ of new debt.. Next year it will be? And who is going to buy this debt? At negative interest rates? Come on! Why would anyone do that?

      • Old school says:

        Congress gets advised by the financial gurus. I read 2020 was going to be the year the financial system broke anyway and covid was a great reason for Congress and the Fed to drop extreme amounts of money into the economy at negative real rates. I think history tells us the economy will become addicted to free money.

        • MCH says:

          If one were to believe the stories out there now about companies not finding enough workers, then we see the impact that the federal government is having with this stealth universal basic income approach. (a combo of stimulus and enhanced unemployment) Whether this is long term sustainable to any real degree remains to be seen. The only way to really do this is to redistribute wealth via taxes, both from wealthier individuals or corporations.

          The problem though is that corporations and wealth individual still has recourse, they have mobility. Although that is unlikely to happen, if you think about it, corporations before the Trump cuts did pretty well, if it was just an isolated reversal of the tax cuts, I don’t think it’ll matter much. But thanks to the reaction to the pandemic, things have changed, and in a very irrevocable way. If the politicians have the “courage” to actually turn off the spigot, things might get back to normal, but it’s doubtful. They’d want to keep their jobs, and besides, they need to use the excuse to keep funneling pork to their donors.

          I wonder about this long spiral down we’re about to see, and ultimately, we’ll see who gets the blame for this. Somehow, I foresee the orange man getting the lion share of the blame at the end. Not that it makes a difference really.

          All I know is that I haven’t gotten my result yet, I want my SALT deductions reinstated, Joe, hurry up, or no infrastructure bill for you. The dumbos hate you, and if you don’t give what our jackass representatives in the House is asking for, you’re not getting infrastructure. Yes, life is unfair, but I’m much happier if it’s unfair in my financial favor.

        • Harrold says:

          Corporations paying 0% would be foolish to abandon the US.

        • MCH says:

          Harrold,

          Why do you think companies were bending over back wards to figure out tax inversions in the Obama years. Do you think it was because they were paying no taxes?

          Do yourself a favor and just hang out with Kumar. 😝

      • Rcohn says:

        The Federal government ran deficits of ~ 3.7 T $ in 2020. That money was spent with obvious multiplier effects . In 2021 the government is running deficits of over 4 trillion$ . This money is/ will also be spent .
        The concept of the Fed creating money and burying it in a hole is a canard. The Fed is a direct enabler of government spending by buying all new government debt.
        I suggest that you take your argument to an extreme and assume 10,15,20, 50 trillion $ government deficits . Do you actually think that such spending ,which is directly monetized by the Fed ,is not inflationary.
        The answer to your question on who will buy government debt at negative rates is an obvious one. NO ONE except for institutions who are required to hold additional debt as collateral and those parking money will buy more debt at negative rates. The FED will be the only buyer of debt

        • economicminor says:

          I guess we’ll see if history and the banking experts are right or you are.

          Watch Youtube DiMartino Booth “Bond Expert Explains Banking System” and “How Banks Work & Dictate the Economy” and Steven Van Metre’s “The Fed Has Created a Liquidity Trap”…

          There are facts and then there are myths and stories… Some people like facts, other like myths and stories.

        • Petunia says:

          The govt has no ability to spend deficits in the 10T+ range. They can’t even payout stimulus money without a boondoggle.

          I just read they haven’t yet spent money allocated to Louisiana back in 2016 for flood mitigation. There is money sitting in budgets all over the govt, which they don’t spend, because they don’t have a clue how to complete the projects they need to complete.

          If you think the govt has the ability to manage a huge infrastructure bill, you are sadly mistaken. This is the group that drove our country into the ground over the last 50 years. You can’t honestly believe they can fix it now.

      • ivan says:

        MMT. The Fed would become capable of purchase anything by Congress. Then, like in Japan, Fed is becoming the owner of everything on behalf of its PRIVATE OWNERS

        • Depth Charge says:

          People don’t realize who owns the FED. It’s the private banks who are stockholders. The banks have taken over the entire economy and will soon own all assets. Barrack Obama had a chance to save the American people from this scourge. Instead, he sold them out for a beach house in Martha’s Vineyard and hundreds of millions in dirty money. The guy is filth.

      • jrmcdowell says:

        “Inflation is coming from magical thinking and speculation.”

        The speculation is certainly there but the Fed creating trillions to buy bonds is a very tangible action. And the Fed’s balance sheet is much larger than the reserves held by the banking system therefore most of the money is not trapped there.

        Additionally, someone outside the banking system who owned an MBS before this mammoth QE, can now sell at the Fed-inflated price and then parlay the gains into other assets such as stocks and housing.

        Also, when the Fed buys government debt, the govt doesn’t ultimately have to pay interest on that debt as the interest is given back by the Fed. As long as the debt is rolled over on the Fed’s balance sheet in perpetuity, the govt is not directly burdened by the debt and so it doesn’t need to be “serviced.”

        But while the govt is not out any money for this debt, this printing ploy depreciates the currency (inflationary). That is why the Swiss can print money and buy US stocks.

        Who knows how this will play out in the long run, but for now, QE is very inflationary and the printing presses are much more than magical thinking.

      • Phoenix_Ikki says:

        I would loooove me some deflation and major deflation in home prices in Southern California but I don’t think it will happen probably in my lifetime with the way things are going. I probably have a better chance of spotting a unicorn and a pig flying together then seeing the next housing bust. Btw, I am really really really hoping I am dead wrong on this. All data points to a giant bubble so far the distortion has caused me to question my sanity more often than not.

        • SaltyGolden says:

          Things are obviously very weird right now. Do not pass go, do not collect $200. Full stop. Trust your gut. If you can’t trust your gut, examine your biases, check your intuitions, and seek outside counsel.

          Whatever you do… think very hard about what socaljim has to say :)

      • Heinz says:

        All the printing and QE currency certainly found a home in the markets, especially the ever-rising stock market, with real estate an honorable second. That is where vigorous inflation found a home up to now (thanks to Cantillon effect).

        Markets are now joined with helicopter money to masses via a tsunami of stimulus. Price inflation on steroids could be the result.

      • Alex says:

        According to the Federal Reserve Bank of St. Louis, total currency in circulation increased by 14% between January 2017 and January 2019 and 16% between January 2020 and January 2021. That seems like a fairly significant jump to me.

      • YuShan says:

        Yes, the big theme this decade won’t be inflation but counterparty risk / defaults (from imploding asset prices and debt).

        The idea that you can “inflate away” debt and avoid default is flawed. Inflation reduces the debt only slowly, but the higher refinancing costs are immediate and will trigger defaults.

        The idea is also flawed because budgets are not balanced. The period after WW2 is often mentioned as an example that you can “inflate away” debt, but then the the budget was balanced and there was strong (population) growth. These elements are missing now.

        We currently have out of control inflation. I expect that it will lead to rejection of the currency and the resulting much higher financing costs will then trigger defaults/ debt deflation.

    • Anthony A. says:

      CP:

      “Dog eats dog world”…….the way I remember that saying is:

      “It’s a dog eat dog world and everyone is wearing Milkbone underwear”.

      No idea where I first heard this though.

  4. Javert Chip says:

    If you are attending a sheep-shearing and you don’t see any sheep, you’re the sheep.

    The shame is a lot of people simply can’t tell when they’ve been invited to a sheep shearing. “FREE NO-OBLIGATION 3-DAY STAY at GRAND OPENING of a Mexican (or Hawaiian) condo time-share” seems to be weapons-grade sheep bait.

    • Lou Mannheim says:

      Look at the last 20 years. We have printed, what, $30 Trillion between Treasury and the Fed? We’re over 100% debt/gdp but there are other industrialized countries that are far higher (Japan), so there’s room to keep inflating.

      We live in an age where new machines are deflating the global economy, putting people out of work, with the hope this is a second industrial revolution, and all new industries will crop up as a result. But that is not happening. So, we inflate.

      Capital asset prices can not go down, only that would trigger genuine unrest here. Don’t be surprised when the Fed or Congress authorizes another stimulus/bailout/theft scheme. They don’t work for you, and since we pass some of the inflation costs to the ROW, it seems accretive.

      If you want to know what markets are going to do, monitor Treasury funding and what people are doing with their printed money. The last year was fleeing cities and snapping up rural properties, along with all the stuff that feeds into (4x4s, wood, Green Giant arborvitaes). Eventually the trillions are recycled through the financial statements of most companies, markets know this, hence high multiples on a trailing basis.

      It’s all just inflation, stop fighting it.

      • Jdog says:

        When ever the government is giving you something, you should be scared, very, very, scared. The worst words you will ever hear is we are the government and we are here to help you.
        The government is a con man, and if they are handing you a check with one hand, they are stealing your wallet, with the other. There will be a downside to all of this government sponsored charity, and it will be ugly….

        • Lou Mannheim says:

          I would debate the worst words part – if you are governed by amoral people however, then yes, be very afraid. Our media deliberately, or by ignorance, understates the costs of our many bailouts. They never mention the lifetime of inflation for those who save in banks or don’t have access to capital assets.

        • Jdog says:

          “if you are governed by amoral people”

          LOL. There are no group of people outside penitentiaries that are any more amoral than politicians.
          The average politician is a psychopath devoid of all compassion and ethics. They are the people who perpetrate genocide and misery upon millions of people without a shred of remorse….

  5. Gary says:

    I read this stuff because I can’t help it, but Wolf has been calling a housing bubble for like 5 years now.

    • Wolf Richter says:

      Gary,

      A “housing bubble” means prices rise. A “housing bust” means prices fall. You’ve got to get the terms right.

      Yes, I have been calling it “Housing Bubble 2” for years because prices have been rising. Duh. And I have been calling the four years after “Housing Bubble 1” a “housing bust” because prices were plunging. So it’s Housing Bubble 1 to Housing Bust (1) to Housing Bubble 2 to …??? (unknown)

      • Gary says:

        Wolf,

        I mean debating terms or whatever seems like semantics. I’ll certainly concede whatever definitional argument you want to win. I just think the investment performance if people followed your advice would be very good.

        • SwissBrit says:

          Saying yes means no and no means yes just seems like semantics too, but whatever makes you happy I guess, eh?

        • Cas127 says:

          Gary,

          You can go to sites like FRED or multpl and get historical interest rates and home sales volumes/median prices.

          During the few periods over the last 20 years when DC has allowed interest rates to rise towards anything resembling an honest risk adjusted number, sales volumes and/or median prices have tanked in housing/stocks/etc.

          This isn’t a surprise, it is exactly what the discounted cash flow formula would expect.

          Feel free to get the various stats yourself for the last 20 years and view the correlations.

          So long as interest rates are artificially strangled by gvt money printing ZIRP, asset values are going to be in a bubble…normalization of rates/abandonment of the USD will gut these phony asset values.

          There is only so much ruin in a country.

        • Javert Chip says:

          Gary

          Nothing like having the courage of someone else convictions.

  6. Jon W says:

    This is great and all, but the problem is that if you are a renter then you have a known loss for every year you don’t buy. If you buy now you are likely to lose money – most of the people I know who have bought recently agree with this. The calculation though is simply whether the amount you’ll loose from buying exceeds your rental losses.

    I’m basically forced to be a leveraged speculator. You might say, ‘well just stay out of it until it settles down’ but the amounts in question are upwards of 50% of our pre-tax income. It’s just insane amounts of money to have a crummy two bedroom hovel. If we don’t play the game, we get ground down for another decade funding someone else’s retirement. If we buy we could do really well, or we could end up financially destroyed.

    So is it spending the rest of your life struggling to get by while on a very good income, or flipping the coin?

    I understand Wolf’s position, but he no doubt has the luxury of having gotten a basic roof over his head long before the market went thermonuclear, so can stand on the sidelines. For many of us we are forced to play their game.

    • Uncle Salty says:

      “So is it spending the rest of your life struggling to get by while on a very good income, or flipping the coin?”

      Perhaps you might refer back to the article below and analyze the national and local RE charts. Don’t know where you live. Pay close attention to the RE bust from 2006 to 2012. If you bought now, would you be able to withstand another bust? Analyze every possible scenario.

      https://wolfstreet.com/2021/03/30/the-most-splendid-housing-bubbles-in-america-house-price-inflation-in-all-its-glory-march-update/

      You’re talking about what may be the biggest financial decision of your life, much, much more than a mere “flipping a coin.”

    • Ron says:

      Be a squatter govt mandate

    • Old school says:

      If you use a very detailed rent vs buy calculator (I like Michael Bluejay) you can be professional about it and run 5 different scenarios from severe recession to booming economy and get a better feel for financial outcomes for renting vs. buying and what that looks like over different time horizons. Home buying is a very challenging financial problem to figure out.

      We have been on a 40 year long term trend of declining interest rates and higher asset values, but that may come to an end during our lifetime.

    • LeGin says:

      I respectfully disagree. A house is a product with the two-fold value – its both a livable space and an investment, sold and bought on two different and diverging markets. On the local house-as-a-living-space market we are the prime buyer, while on the global house-as-an-investment market we are minnows. One needs not to commit to both in one house. As a renter, you pay for the first component of the house value, while the owner pays for the investment component. To put it in perspective, in Toronto we pay $3,500 monthly rent for the house that was sold for $3M six years ago ($4M today at a minimum), while our money is invested in stocks, bonds, two overseas properties with minimal carrying costs, some diamonds and art. That is also a nice play.

      • Jon W says:

        If your figures are correct (not disputing them, they just seems remarkable) then your house is yielding 1%. Yeah, I mean I wouldn’t buy in that scenario either. Here in the UK, even central London you can get 4% gross yield (~3% net), so the rent vs own situation is not as clear cut. In addition, you are effectively able to get negative real rates on your mortgage debt, so your mortgage ‘earns’ you a return that offsets the cost of renting.

        This is an absurd situation but it is the one we find ourselves in, and most people I know are just trying to play the rubbish hand they’ve been dealt as best they can. It’s the old ‘markets can stay irrational’ thing. I’m going to be too old to get a full term mortgage if I wait much longer, so I’m being pressed to make a call either way.

    • Dan says:

      Question: Does Wolf rent, or own his home?
      Based on the pictures of the decaying power pole, I’d say he rents and is covered by rent control. Smart guy that one.

    • Petunia says:

      I rent and wouldn’t buy now even if I had the money. This bubble will blow like all bubbles blow. People still think the last housing crisis was about subprime. I think it was about credit, which dried up, and cost people jobs.

      The current bubble is also fueled by subprime credit, except this time, the borrowers are the hedge funds and reits buying all the houses on incredible leverage. The reason the buyers are not price sensitive is because it’s not their money they are spending, it’s your savings mostly.

      Since incomes are not going up, these overpriced houses will never rent at the revenue levels they need to keep the bubble inflated. Why do you think homelessness is increasing. It’s because the incomes don’t exist to support the inflated rents, and neither do the jobs.

  7. Brent says:

    There is a very important point to be remembered.

    How it still works:

    Buy a chicken coop made from 2″x4″ wrapped in Tyvek for $500K with 10% down,sell it next year for $550K…

    ROI 100%, give or take…

    When it does not work anymore send your bank a jingle mail (house keys) and that’s about it in no-recourse states.

    Later on local authorities may send you a notice meekly admonishing you to pay property tax bill…

    Big F… Deal.Frame it and hang it on your bedroom’s wall.

    Yet some people just cant stop at 100% ROI

    They take HELOC loan, sometimes 80% of that $500K, and blow it ASAP.

    Well,this loan is just a regular bank loan,not a mortgage one can walk away from…

    With all the ensuing consequences…

  8. MCH says:

    You can literally say this about every asset class now. Bar none.

    Stocks, FOMO addled buyers are suckers. They are the greater fool.
    Cryptos, ditto
    Real estate, ditto
    Commodities, where are you going to store the physics assets?

    What’s the alternative, leave it in cash and watch the J team devalue it until it’s worthless?

    • Wolf Richter says:

      MCH,

      Liquidity in the housing market dries up very fast, and then it’s very hard to sell a home. That’s the normal condition of the housing market.

      In the stock market, there is liquidity by the millisecond. That doesn’t exist in the housing market.

      Housing is an illiquid asset by nature. The liquidity we see today that allows you to sell a home very quickly at ever higher prices is not common, and when it goes away, you’re going to have a hard time selling a home.

      And then, if you HAVE to sell because the carrying costs of your second home eat you up, you have to cut the price until you eventually find a buyer.

      • MCH says:

        I agree with the illiquid nature of the housing market. It is unique relative to certain other asset classes that I mentioned above.

        The alternatives though are all somewhat dangerous in their own way, the one differentiator about a house is that you at least own the land. Unlike most other assets, which could potentially disappear or be stolen. The only safe asset in this case is treasuries, probably TIPs at this point. Especially if we really start to see runaway inflation… although I wonder how much TIPS could compensate for those.

        It’s funny though, the motive in 2006 and 2007 was to get rich quick, now it’s more about preservation of assets. In a very odd way, people in this country are becoming like the Chinese who have to go overseas to protect their wealth. Except here, it’s usually the small investors who are doing the 2nd house thing.

        I really wonder though, how much of this buy now is for a 2nd house to drive up prices.

        • fajensen says:

          the one differentiator about a house is that you at least own the land

          Well, the land is usually taxed, so in a way, one rents the land from the government, while having ownership responsibilities on it, like, if there is an old oil tank or some other shit buried there, one gets to clean it all up :).

          Of course as long as there is not a civilisational or political breakdown, it is going to be ok to own some land.

        • Heinz says:

          TIPS could be just one useful hedge for future wealth preservation, but a lot depends on how good your crystal ball is going forward with inflation, ZIRP, and financial repression.

          Building a retirement portfolio with TIPS as a key investment seems underwhelming at best.

      • cas127 says:

        I’m not advocating it per se, but conceptually a well diversified low PE stock portfolio (or currently low PE anything) likely bears significant less risk than a high PE anything (looking at you housing).

        The main problem is that the vast majority of casual investors are completely creatures of momentum perception…recent winners look like obvious picks (despite the fact they are now beyond fully valued) and recent losers look doomed (despite the fact that that until recently they were fully viable businesses that are now selling at huge discounts).

        But in times of chaos/confusion, the most straightforward bet is to simply hold cash to buy time, do more detailed research, and witness more emerging facts.

        DC is clearly committed to destroying USD value in order to effectively lower their own huge accumulated debt/preserve their power through the bribery made possible by means of the Fed’s printing press…but they have to proceed somewhat slowly lest the scam become too obvious.

        So the dollar will be eroded, but at a few percentage points per yr.

        Artificially inflated asset values can be halved or worse in a week, a month.

        So,

        1) Cash holding is less risky than blind asset bandwagoning and

        2) In asset markets where “regression to the mean return” has held for decades/centuries, recent “winners” almost always have the worst future prospects (already being fully valued and then some). And the ugly, unappealing, scary losers…have the best prospects (in aggregate) for the exact opposite reason.

        And portfolio diversification can help make a low PE strategy less scary.

        • IdahoPotato says:

          Stop making so much goddamn sense, cas.

          There are value ETFs with 18 p/e right now. Not cheap, but not too expensive either.

        • VintageVNvet says:

          One of, if not your best comment yet c10,,,
          Not a bit sorry for those of WE the PEEDONs who can now access this kind of very concise analyses, but who won’t.
          Thank you for your continuing dedication to education of me and my ilk.
          In my case, out of the SM since the 80s, and just hoping to become sufficiently educated to invest again, as opposed to ”gamble” as currently appears to be the case.
          And of course many kudos to WR!!

        • cas127 says:

          One additional word of warning I should have included initially…

          In a world 20 yrs saturated by ZIRP, asset inflation has infected almost every asset class…all assets can be valued using the discounted cash flow formula, and ZIRP inflates the DCF across the board…everything becomes more and more correlated to whatever the gvt manipulated interest rate does and somewhat less so to the underlying assets’ business/mkt values.

          The craziness is seen when “value ETFs” are trading at 18 PEs…which is above the long term, whole mkt average of 15.

          Such low PE ETFs *are*,

          1) likely to fall less than the general mkt,

          2) likely to fall much less than the high PE ETFs *but*

          3) Are *still likely to fall themselves* if/when rates are allowed to rise…because *everything* is overvalued by ZIRP.

          The essence of it is that a huge number of investors don’t want to be in definitionally volatile stocks…they have been herded into them by zeroed interest rates.

          So, with each 10/25/50 basis pt rise in interest rates, x billion dollars exit the equity mkts for the stability of Treasuries, AAA corporates, whatever.

          I’ve come to think of accumulated US wealth as slopping from asset bucket to asset bucket on the deck of a ship rolling in troubled seas, where interest rate movements are the waves.

          The direction/size of the slop has less to do with the buckets themselves and more to do with the sea.

      • The liquidity problem you mention happens on the buy side. What happens when you have amped up liquidity and no sellers? Liquidity trap? The utility of money is called into question. If you are leveraged up on liquidity you get crucified. Then deflation rips through the reluctant sellers. The utility of housing is rental income but the utility of money is zipshitola. Then a house is not a home, it’s a liability. Then there is crypto but you pay to play.

      • Swamp Creature says:

        My settlement Attorney gave me some good advise which I remember to this very day.

        “Its easier to buy than to sell”

        If you listen to those junkyard dog Realtors and shills like Lawrence Yun you will hear something completely different but I will stick with what my Attorney said.

        If you do buy 1st then have a contingency for the sale of your previous home. Don’t get stuck with 2 homes. If the seller won;t accept that then don’t put in a contract.

    • Old school says:

      Yep. Fed has a tiger by the tail with all assets values surfing on their policies. I think all a non wall street person can do is try to use sound planning. What is your time horizon? If you are staying put 10 years then buying a house might be ok. If you are 10 years from retirement buying a stock fund might be OK. Any thing less than five years you better just plan on cash and taking your inflation lumps.

      • Petunia says:

        After the crash of 1929 almost all assets declined in value. The winners were the investors who sensed danger and got out beforehand. They didn’t wait for the next signal or decline, they got out. Those were the real winners in the crash.

        If you think you can time the next downturn, you will lose and probably bigly.

        • KateInLA says:

          The biggest losers were those who were over-leveraged, whether it was for stocks or real estate. Avoid debt and you can ride out the ups and downs.

        • Petunia says:

          Kate,

          The over leveraged drove down the prices when they were forced to sell to cover the margin. But the not leveraged also lost because the lower prices affected them as well. Getting out would have been the best way to stay whole, still is.

    • Swamp Creature says:

      MCH

      In the crash of 1929 through 1933, nearly everything went down. If you were diversified it didn’t matter. You lost anyway. There were a few safe havens, Like Long Term Treasury bonds. Hawaii Real Estate. Trollies and subways in NYC kept running. The Empire State building was built.

      Today those safe havens will not work because their value will be inflated away. Civil unrest will destroy whatever is left standing.

      If you buy gold and store it in your house someone will eventually find out and you will find your house ransacked, as I did many years ago. JPM Chase said they will not guarantee any gold stored in their Safe Deposit boxes will be there when you go to get it.

      These are difficult times. I don’t have any answers.

      • zr says:

        “If you buy gold and store it in your house someone will eventually find out and you will find your house ransacked, as I did many years ago.” what happened? where did you put your 2A?

        • Swamp Creature says:

          I originally thought the burglars were tipped off by the gold trading company, because of the timing of the burglary, 2 weeks after I bought the gold Krugerrands. But it was most likely timed with the fire in my 4 unit which affected the other units, not mine. In DC at the time is was standard practice to burglarize any house or apt that had a fire, since there is usually no security. I opened a safe deposit box immediately and put the gold in there.

      • Depth Charge says:

        I will not go into any detail, but I fabricate things to hide my pms and my cash. I always have a large amount of cash on hand because I don’t trust that banks will be open if the shtf. I saw a Washington Mutual bank run last go ’round. There was a line around the building and down the street.

        I am confident that my ingenuity would stump most people. You actually need a few tools to even locate my loot. And you could be staring right at it and never know it was there. If you are going to keep pms at home, you need to do that.

        • zr says:

          I hold my PMs on my lap and kiss it good night and good morning every day. lol. Not as legendary as King Tut, but close :)

        • They put a gun to your head and ask for the combination. Someone who has lived through these things in third world countries noted that having a large obvious security mechanism only serves to tip off the mobs about whose house is worth breaking into. In courtly terms. for the 1%, that involves hiring accountants to watch the accountants, and keeping lawyers in neat compartments isolated from each other. That also works to keep the gendarmes from turning your lawyers against you. The (perceived) enemy is government. The mobs can be bought off, at least on the institutional level that works. Robbing trains and stagecoaches was worthwhile when payrolls were gold, but bonds and stocks made that a high risk low reward venture. No crisis is ever going to be as dystopian as they are in the movies. Gold for barter? I would rather sell a loaf a bread for a shard of gold than the other way around. Most of us have wrongheaded ideas of what the financial collapse would look like. In the depression money in the mattress worked, because no one suspected the walls of your shack were full of money. There was still some honor among thieves, and the poor love gold most of all. Bill Gates has the most farmland of any US owner. He is probably out there every night burying the password to his digital wallet :)

        • Tony says:

          Let me guess.
          You have it hidden within your grand piano.

        • Javert Chip says:

          At the risk of severe abuse & possible humiliation, what is PMS?

        • Swamp Creature says:

          DT

          better be careful. Some scum on social media is reading your post “I always have a large amount of cash on hand “. You name and address have just been sold and posted on the Dark Web for every burglar to salivate on. They are already counting the money haul.

  9. stonedwino says:

    If you sell your house now, by taking advantage of FOMO, why on earth would you even think about buying another house, even if you could can find another one to buy. If your thinking about renting a house, again, good luck finding a house to rent. It’s the definition of insanity…

    • Bobber says:

      Usually, it’s jobs displacement that causes housing prices to drop. People have to move to different cities to find work. Other people can’t make payments and lose their house to foreclosure.

      Perhaps that is why the Fed went into panic mode with the stimulus. Home mortgages are a huge portion of total debt.

  10. timbers says:

    It’s the vaccines fault for making home prices go up too much. Dr. Powell himself has said so this to be true: “data from RedFin shows that in April, homes sold at their fastest pace on record with nearly half off-market within one week.”

    “There has been an ongoing debate at Redfin about whether fear of coronavirus infection was keeping homeowners from selling. With a third of American adults now fully vaccinated and still hardly any homes being listed for sale, we’re close to settling that debate,” said Redfin Chief Economist Daryl Fairweather.

    • economicminor says:

      Maybe now people are afraid to sell because they see there is nothing to buy. Psychology is working against the markets in a big way right now.

      • timbers says:

        Solution is clear as Doris Day: Stimulus checks for the rich home owners only. Only real stimies like $1 million dollar checks. This would dovetail beautifully into the Fed’s trickle down wealth affect causing those afraid owners not to be afraid, and buy another house thus perpetuating the wealth affect.

  11. David Hall says:

    Home construction activity is increasing. It is difficult to time a housing market. Most people only have one home. Selling now might mean they lose out. 2006-2012 style crashes do not happen every day. Short term rates are close to zero. Before a one year CD paid 5% interest, FDIC insured. Those days are gone. Some sold their homes and lived in an RV campground, but the landlord kept raising the campsite rent, as much as the renters could bear. Zoning restrictions increased homelessness. Can not attach an apartment to an existing home in this zoning district. One home per lot max. Out of control fertility rates in Central America and the Caribbean should not be imported into the states.

  12. 728huey says:

    I think Wolf is correct about selling your house quite literally right now, but that is only if you have somewhere else cheaper to move to and live in. Otherwise, you’re just trading sideways. It’s possible the market may stay this way for the next few months, but I wouldn’t want to tempt fate at this point.

    • Turtle says:

      Easy for folks in HCOL areas. Sell in SoCal then buy something twice as nice in Texas for half the price, all while saying good-bye to state income tax. That’s just one example.

      • Harrold says:

        Wait until you find out about Texas property taxes.

        • Turtle says:

          I found out more than 10 years ago when I left SoCal. Do your math homework. Texas saves me thousands every month.

        • Anthony A. says:

          I’ll say this again…no state income tax, no city income tax, lower sales tax, things cost way less than in Ca (I lived there, I know), vehicle registration is $75/yr, etc.

          I have saved thousands moving from LA area to here.

        • Turtle says:

          I pay $55/mo for nearly maxed out insurance on an eight seat SUV in TX. 14 years ago in California my Corolla cost $150/mo with less coverage (same insurer). My business pays $0 for a city license, $0 for franchise tax and my Schedule C pass-through income is taxed at 0% by the state. In California all that adds up to tens of thousands of dollars per year, plus several thousand dollars more each month for added housing costs.

          It’s the most laughable thing ever when someone tries to convince another that moving to Texas is going to be a costly proposition. They can’t distinguish between percentage and total cost when it comes to property tax, completely avoid the income tax situation and are just unaware of everything else like registration and car insurance. Maybe grapes are 5% more expensive in Texas. Oh, the pain!

          PS. It’s home insurance that is expensive in Texas (hail and all that). Try that one next time, but do make it an apples to apples comparison by adding in the cost of earthquake insurance, which most Californians don’t have because their pitiful disposable incomes are already below Alabama levels.

    • Jdog says:

      The concept is that housing at current prices is not sustainable.
      Real estate like the stock market has ceased to be investments, and is now a gambling casino.
      It never fails to amaze me how short people’s memories are. It is not like we have never seen this before, we have. In the real estate bubble prior to 2008, the game was to purchase the most expensive home you could, and refinance it every 6/12 mos. drawing huge amounts of cash from the ever increasing equity.
      It did not matter to people that wages were stagnant or dropping, and that jobs were being offshored in mass.
      I remember purchasing a investment property in 2012 in a short sale where an older, formerly prominent couple in town had basically lost everything they had worked a lifetime to acquire.
      I remember it was difficult to rent the home, because nearly all the families who applied had abysmal credit, having been wiped out in the crash.
      The hard fact that few people ever learn is that debt has an absolute value, while the value of assets are always perceived, and vary greatly depending on where you are in the economic cycle.

  13. Micheal Engel says:

    1) IWM weekly :
    2) There is an RSI line coming from Sept 21 2020 low to Oct 26
    close.
    3) This line supported last week open, a green candle.
    4) Last week IWM turned sharply down, but closed above the
    open, producing a hanging man candle at the top.
    5) Option #1 : the whole structure is a diamond pattern. It’s a continuation pattern, a FOMO.
    6) Option #2 : IWM will rise in the next two weeks to form a RS, a lower high under Mar 15 high. This pattern will be a H&S.
    7) That’s negative.
    8) Option #3 : next week IWM will close lower. Next week will be DM bearish flip.

    • Satya Mardelli says:

      WTF has this gibberish got to do with the topic at hand?

      • Shells says:

        I enjoy letting the numbers and unintelligible descriptions wash over me like gentlest waves in the bay.

        • Kielbasa says:

          You beat me to it. I was going to suggest thinking of his posts as haiku or Zen koans, whichever one finds more mystifying.

        • I feel its more like shovels of dog doo being thrown over me, but that is just me.

        • Anthony A. says:

          I have heard that if you record the text on a CD and play it backwards, you will hear the true message.

      • Micheal Engel says:

        skip !

      • Turtle says:

        “We can’t be expected to understand him. He is so far above us. We are like ropes on the Good Year Blimp.” – Bob Wiley

      • Heinz says:

        Micheal Engel makes more sense than Jay Jay Powell and his army of 900 PhD Fed economists.

    • Uncle Salty says:

      Let me try and interpret:

      IWM is an ETF representing the Russell 2000 Small Cap Index.

      On a daily chart up through last Wednesday, the index was in the process of making a textbook head and shoulders top, a bearish chart pattern. But the neckline had not yet been penetrated so the pattern was not yet complete.

      Thursday of last week proved to be a huge upside reversal day for IWM and the momentum carried into Friday. Shorts likely covered their bets.

      Before Thursday and Friday, it looked as thought the small caps were in the position to lead the entire market down. Doesn’t look that way now. But all it takes is a single day for a chart pattern to change.

      The big dogs report later this week.

      Disclaimer: This post has absolutely nothing to do with the podcast.

    • Michael Gorback says:

      A hanging man candle can be a very tricky thing. A bit too “Jim Crow”.

      The KKK will probably call it out as cultural appropriation and dox you. Next thing you know your house is surrounded by guys wearing pillow cases donated by Mike Liddell.

      • Wolf Richter says:

        Michael Gorback,

        Before we get carried away:

        Hanging man candle as per https://www.ig.com/us/trading-strategies/16-candlestick-patterns-every-trader-should-know-180615

        “The hanging man is the bearish equivalent of a hammer; it has the same shape but forms at the end of an uptrend. It indicates that there was a significant sell-off during the day, but that buyers were able to push the price up again. The large sell-off is often seen as an indication that the bulls are losing control of the market.”

        • Uncle Salty says:

          And so often, the hanging man candle comes right after a big green candle with very little wick at either the top or the bottom. Very often, the close of that big green candle will equal the high, as shown in the chart above. Great time sell and take profits and/or initiate a short position.

        • Andy the Car says:

          Thank you, Wolf. I’ve been wondering for some time now how to know when a big, sudden up candle means more upside or an imminent drop. I mean, you can wait for two short red candles, but more often than not, you miss the top. Now, I’ll look for the hanging man.

    • Lynn says:

      With hangman and a diamond pattern I’m going to say Tarot cards. Let us know when the tower is in the near future position Micheal.

  14. Uncle Salty says:

    From the podcast:

    “They’re not only volunteering to get ripped off, they’re begging to get ripped off and they’ll love you for ripping them off…

    I had replay that a few times….damn hilarious!

    I agree about trying to sell at the top…bad idea. Sell into strength and that strength is happening right now.

  15. Ron says:

    Wolf could u explain micheal Engel all jibber is to me

  16. Mojer says:

    There was a lady from London whose house had her new value of £ 1m who said a few years ago, so what changes for me absolutely nothing.

    If we look at Japan with its eternal 0%, house prices have never risen since the catastrophic devaluation of 1978.

    According to a report of real estate agents in Belgium, the increase in the cost of current homes is due to the lack of housing assets offered for sale, the situation is the same as in many other European countries.

    If we look at Asia in Thailand where I live, I have friends who have had to sell recent second homes at a price lower more than 60% of the cost of construction because buyers have become rare due to the economic damage of Covid.

    The value of a habitat depends a lot on the influence that the population has on the value of its currency which varies very rapidly,believing or not believing what their government says.

    • drifterprof says:

      I live in Thailand too. What are the reasons your friends built a second home (if you are talking about your friends building a second home in Thailand)?

      If they “had” to sell, it seems like they made some mistake in financial planning. In my opinion, Thailand lacks enough stability to invest a large amount of money in a second home.

      I’m just finishing a couple months holiday in the southern Thailand island areas. Even before the pandemic, tourist areas were obviously overbuilt in the last decade or so, like some kind of gold rush. Tourist center areas are now like ghost towns – and many people involved in tourism have fallen into very bad times.

      • Swamp Creature says:

        How’s Pattya Beach doing? That used to be one of my old hangouts. It was just become a tourist mecca at the time.

        • drifterprof says:

          Went to Pattaya once (with my Thai wife). It was kind of uncomfortable in ways for me, because the culture in a classic intensely tourist areas changes. Like Sri Lanka, which became such a disappointment over the years.

          This time we tried hanging on Go Samui and Go Pha Ngan. Goh Samui is a wall-to-wall tourist development from way back. In my view only for tourists who like to holiday in a culture that is tourist oriented and stereotypical vacations (including the typical hard drinking / partying young folk).

          Go Pha Ngan, known for it’s “Full Moon” parties is somewhat more interesting. Slightly off the beaten path, and many more long-term farang (whites) rather than Hawaii getaway style short-termers. Kho Pha Ngan has lot of fringy social dropouts (full body tats common, even Rastas). Sort of reminds me of eccentrics and ne’er-do-wells in Alaska, except Thai islands have lots of Russians and Europeans.

          But Koh Pha Ngan still has a small island rural feel, small mountains lined with coconut plantations and tropical forest. And the local Thais seem more genuinely like the “Thai smile” ethic.

      • Mojer says:

        As you surely know for investment with real estate companies to avoid the rule of owning land in Thailand by foreigners who then with a control by the authority verify that you are outlawed and are forced to sell within a year at any price, never really understood which and the interest in doing such foolish business.
        As you surely know for investment with real estate companies to avoid the rule of owning land in Thailand by foreigners who then with a check by the authority verify that you are outlawed and are forced to sell within a year at any price, never really understood which and the interest in doing such foolish business.
        I agree with you for Thailand this is a very difficult moment economically for the Thais and the future is very uncertain, certainly the worst time to invest in condominiums (the only possibility allowed by law) even at ultra discounted prices.

    • Dan Romig says:

      Mojer,

      Eastern Belgium has been on display this week with two classic bike races. Today, the men and women raced Liege-Bastogne-Liege and some of the real estate is extremely nice as the hills roll out of the towns. Real estate agents are making bank if they move any of the homes showcased by the helicopter shots.

      • Mojer says:

        Dan Roming

        The province of Luxembourg is very beautiful and quiet with its large green spaces, I would like to buy a house in that area but the real estate agents are selling at a high price only old houses all to be renovated indicating recently renovated ( 15-20 years ago), I will wait for see when this madness ends.

  17. drifterprof says:

    I was first-time home buyer in 2010, a value deal on a 1200 sq. ft. 2 bdr in southeast Colorado circa 1900 (got 10% stimulus rebate).

    Even though I had excellent credit rating and put 10% down, it seemed like they were putting me through multiple financial proctology exams to get a loan approved.

    What kind of lenders are approving loans where the buyer waves inspections, etc. ???

    • Nacho Libre says:

      Congratulations on the excellent timing of your purchase.

      It’s a simple game. Lenders lend to the borrowers and keep the origination and other fee. Most of the times they sell those mortgages to Freddie Mac, Fannie Mae (government backed agencies).

      Lenders continue to service the loan on behalf of Fannie/Freddie and charge a fee.

      If the loans go bad, it’s Freddie/Fannie’s (aka taxpayer’s problem).

      Fannie, Freddie package these mortgages (called MBS) and sell them in the marketplace. Uncle Fed buys tens of billions of worth of MBS each month with its magic money.

      As you can see lenders don’t have much financial risk. They only need to check off all boxes is all.

      • Uncle Salty says:

        “Uncle Fed buys tens of billions of worth of MBS each month with its magic money.”

        Question Nacho Libre:

        So the Fed buys MBS, the GSE’s receive the money for the sale of those MBS. Where does the money go from there?

        • Nacho Libre says:

          GSE and lenders in this case are only intermediaries/enforcers.

          Effectively, money flows from the Fed to the borrowers.

          As the repayments from borrowers reduce the principal, Fed purchases more as replacement MBS. Currently it holds around $2.2T MBS in its balance sheet.

          Wolf has done several posts on this topic. Searching and reading through the archives would be fairly educational. FRED is another source with easy to read charts.

        • Uncle Salty says:

          Thanks! I’ll go back and research the WolfStreet archives and visit Fred. Just trying to understand where or with whom all this liquidity finally comes to rest. The money has to find a home, eventually, I think. Appreciate your reply.

        • Nacho Libre says:

          We all like to learn from each other.

          This 2.2T balance poses as a huge conflict of interest for the Fed. If Fed raises rates, some of this MBS will surely default or at the minimum lose value.

          Does that knowledge prevent Fed from raising rates and scuttle it’s own holdings?

        • Nacho Libre says:

          Apologies for the spam. But since we are on the topic, here is the sheer magnitude of Fed intervention in housing market.

          Total US housing mortgage amount currently is about $10T. Fed owns more than 20% of it. In a sense the Fed owns one in every five houses.

          We don’t need this monster. Time to finally get rid of it.

      • drifterprof says:

        Thanks Nacho Libre,

        Like Old Salty, I aim to dig into Wolfstreet archives and Fred.

    • Old school says:

      Government is a funny task master. After housing bust, they tightened up on fannie, freddie mortgage lending so only legitimate credit worthy people could borrow. Fast forward to Covid emergency and not making a house payment for 18 months is no big deal.

    • Lynn says:

      AFAIK only corporations and multimillionairs (at least double digits) can get loans with no contingencies unless they are getting personal or portfolio loans at a much higher interest. If anyone knows of commercial lower interest loans that can do this for ordinary people please let me know, I haven’t found any. I did find a smaller private loan option with good rates- but it’s a personal friend who completely trusts my judgement. That is very very rare I would think.

      BTW, I found one contingency that could be waved that really floored me. DON’T DO IT!! I read the fine print on my bid drawn up by the selling agent on a fixer I wanted- it was on the legitimacy of the title! No no no! WTF? Had him re-write it, then I was outbid by $60K anyway.

  18. eastern bunny says:

    So I sell my home and put one million in the bank.
    What am I going to do with one million pieces of paper that Jerome keeps diluting ad infinitum? Buy dogecoin or cum rocket?
    I dont think housing is going to crash, your dollars are being devalued. Keep that house you wont regret it.

  19. Swamp Creature says:

    I keep getting these offers to buy my house from total strangers some as far as 1000 miles away. A few months ago I accumulated about 40 of these post cards and sent them each a nice polite postcard telling them to take me off their f$ckin mailing list. It worked for a while, but now I’m getting the same postcards from the same scumbags that sent them before. I’m going to have to up the ante. What that will be I haven’t decided.

    • Lynn says:

      Swamp, who are these people? How many are speculators and how many are regular people? How many are speculators posing as nice new couples?

      • Swamp Creature says:

        They are all shills for builders who want to tear down your home.

        • Lynn says:

          Ouch. Are some of them posing as nice couples?

        • Swamp Creature says:

          One of them posed as a nice couple with two children who wanted to move into the neighborhood. They were fronts for a builder who wanted to tear down my house and build a monster home on my lot.

        • Lynn says:

          Thanks. I’m seeing online stories of that sort of thing happening. And suspecting it’s being done in my area.

    • Uncle Salty says:

      I wish someday Mr. Richter would write up an article concerning the financial condition of the USPS, ’cause then, I’m gonna rant. I’m currently in major beef with the USPS over junk mail.

      • Swamp Creature says:

        The USPS is a non functioning entity. Their sole function is delivering junk mail, stealing your checks, identity theft, and hiring illiterates. I went to my local post office servicing my zip code and was told by a supervisor that a 1st class stamp does not guarantee delivery of any mailed item. If you want a guarantee you need to pay extra for express mail.

        • rick m says:

          SC- So right. My vitamins go UPS but swap to usps for the “final mile”, it’s extra to see a brown truck. The P.O. supervisor told me i was lucky they didn’t lose all of my international mail. Taxpayers getting boned by this stupid system, why will they remain willing? I do feel very sorry for the average citizen, getting stampeded into giant personal finance decisions by media grifters in an age of immediacy. It used to be the machinery of business was slow enough to allow time for reflection. Even if i was the seller, benefiting from others panic and fear flatly sucks as a way of going through life. It’s not gonna be a great deal if I gotta avoid the guy at the supermarket after he buys my house.

      • Dave Kunkel says:

        When I was young, my father used to accumulate junk mail and then occasionally stuff it all into one of those junk mail postage paid return envelopes.

    • John Galt says:

      Sign them up for goofy magazine subscriptions via the “bill me later” option. You know, a bunch of garbage no one wants to read like ‘Walking’ ‘Ebony’ ‘Soldier of Fortune’ you know, crap like that. If you’re savvy you’ll send multiples to the same addresses.

    • SnotFroth says:

      Foggy Mountain Pure Skunk Essence – 1 oz Bottle

    • SwissBrit says:

      Glitterbombs are fun (for the sender at least)

    • Swamp Creature says:

      I’m going to send them a post card telling them I will be submitting their name to 50 junk mail distribution addresses. Better yet I’ll do that without telling them and ask them later how they like their mail they are getting.

  20. Rcohn says:

    Those older than 65 are disproportionally home owners. And they also have the highest rate of mortality for obvious reasons.
    As they die some of these Homes will be inherited by their children and others will be sold. TO WHOM?
    The marriage rate and the average age of marriage has been going down for years. And these younger workers do not have the luxury of looking forward to super high pensions when they retire

    • Petunia says:

      I heard a young woman on a video discuss her grandparents offering their home to whatever grandchild wanted to inherit it. The “inheritance” comes with a $300K mortgage debt which they borrowed to enjoy their golden years. Some gift.

  21. coboarts says:

    Just to offer a local bay area narrative. My wife and I are conservative and old school. We saved up our down payment to 20%, within the range that we figured we could afford. We were able to get in with 10% down and a second. The remaining savings went into a CD JIC. We bought during the .com bust, in a neighborhood we never thought we could afford. We had already been through bidding wars, where you blinked at your partner then went 10k over to be blown out by 30+k over. When I heard that GM laid off 25,000 amongst other such news we pulled back. It looked like a recession on the horizon, and possibly a change to a buyer’s market.

    We reached a point where, we didn’t think the market had bottomed, but as a software project manager signing contracts one at a time, and pens pulling right back from agreements, I knew my employment was at risk. I had countered on a home owned by realtors who lived in LA. They re-countered, a little less favorably, but I accepted it right away. We were still visiting open houses and it sounded like a train coming down the tracks. Within six weeks of closing the house prices had recovered and were climbing, this was the beginning of 2002.

    Since we moved in, we’ve seen boom and bust, some great. We’ve seen neighbors buy at the top and lose everything. We discussed selling our home at the top and banking the money for the next bust. But, this is our home – maybe if we had an investment property, then it’s business.

    Everything Wolf is discussing is going on around us right now. Ours is what is considered an affordable neighborhood (haha) with entry level families and downsizing empty nesters. Homes don’t even put up signs before they’re sold. Not a lot of homes do go up for sale. If you can rock & roll it’s all good, but I’ve known some real nice people who drank the then current koolaid and got real hurt.

  22. Swamp Creature says:

    I’m reading the book “When Money Dies” which I just purchased from Amazon. One day after I purchased it I got a call from a scammer saying my Amazon account was $330 in the hole and to send them payment immediately or the Feds would be showing up at my door.

    I’m in the chapter where militia groups knocked off 400 government officials in Bavaria and southern Germany cities. No one said a word. They were all communists. Wink, wink, good job.

    • DougP says:

      I just finished that book but I got it from the library.

      • Xavier Caveat says:

        In one of the chapters, Ernest Hemingway was living across the border in France, and he and his chums try to spend one whole dollar in the fatherland over the course of a day in 1923, and they end up with countless millions of marks left over from their buck, after living large eating & drinking to excess.

      • Swamp Creature says:

        All of our libraries are closed. Any take-aways from the book? I’m only on the 2nd chapter.

  23. Gian says:

    Couldn’t agree more with “perfect time to sell a home….”. I put 2 rentals in CA, a 5 acre parcel and a rental here in WA on the market last week and have 3 of them in escrow! Maybe it’s the top of the market, maybe not, but I bought them all at rock bottom back in 2008. No time to be greedy, values have risen exponentially and it’s time to take my money and run and await the next RE Armageddon before jumping back in.

    • Paulo says:

      It has to be top of this market, and for speculators a good time to rinse and repeat. I have always had a different take on RE though. Going back in time and extrapolating my past lower wages with what a dollar would actually buy in comparison to today, RE ebbs and flows, but always ends up being more expensive and a good store of value. This assumes one can maintain and repair without hiring others, for such expenditures comes right off the top and/or out of income or pocket. Sure, an investor can pick peaks and valleys (maybe) like racing against an elevator. Or, you can take a longer view, get rid of debt, and build a future. Buy a home and create some security along the way.

      I will never sell my current home or property. I guess my kids will inherit it all. I simply don’t care about taking the money out of it. There is a great sense of security having a home paid for and staying out of debt. You don’t have to answer to anyone. I have some residential acreage which I bought cheap. If I develop it our neighbourhood will simply turn into another subdivision. Screw it. The taxes are minimal and the cottage I did build and now rent out pays for the taxes and insurance. Meanwhile, it is worth more, everyday. This has been a 100 year trend here. There might be some blip cycles, but the trend is irrefutable.

      regards

    • Uncle Salty says:

      I live in the suburbs of Portland, Oregon. I’ve been living in the same house for 21 years. Over the years, I’ve kept close tabs on the RE market in my area. I can say, without a doubt, the market has never been hotter. A house just recently sold for $50K over the ask. That was a few weeks ago, and nobody has moved in. The house is still vacant.

      No, I’m not selling my house, not until I get a massive increase in my property tax bill. That increase is coming, I can feel it. That’s when I’ll sell, simply because I’ll be one pissed-off sun b***h.

  24. Lynn says:

    All it might take is a few more private equity or “family offices” to have margin calls. Fingers crossed. I hope someday to buy a home I can have another dog, a garden and some chickens. Maybe be a plan B for friends. May the chickens come home to roost.

    It’s not like the bottom half of the economy hasn’t already collapsed. It’s time for the very tippy top to spill over and even out a little.

    • Paulo says:

      Lynn,

      Best comment of the day award, imho. I hope it all comes to pass for you.

    • Old school says:

      Sometimes it’s simple and I think this is one of them. Easy money plus leveraged assets equals incentive for risk-on behavior. Recency bias says it’s the way to make money, but money is made looking forward not in rear view mirror.

  25. MonkeyBusiness says:

    Don’t worry guys. SocalJim just sold me a house, that has to mark the top right?

    • Phoenix_Ikki says:

      Is that without inspection and contingency and you paid over asking or won a bidding war? All signs point to getting on this forever up rocket ship…nothing can go wrong. FED got your back!

      • MonkeyBusiness says:

        With SocalJim on my side, I paid double the asking price. Still seems like a bargain ;)

  26. Michael Gorback says:

    What about CRE? Where can I find one of those $100 MM delicatessens?

  27. Mark says:

    Let me play devil’s advocate and then ask a question:

    According to the charts, LA home prices are up 221% since 2000 while the CPI is up only 57%. But interest rates were 8% in 2000 and the CPI didn’t include housing. CPI has been low partly at least do to tech advances which have kept inflation in check, but housing (in LA at least) is almost finite resource. They’re not making any more land and no tech advance will obviate the need for it.

    Given all of that how overvalued do you all think RE really is right now? My own opinion is about 10%, certainly nothing like 2006.

    Anyone care to share their thoughts on this?

  28. Phoenix_Ikki says:

    Just playing devil’s advocate here but Google reported last week that the search “When is the housing market going to crash?” had spiked 2,450% in the past month. I don’t think many of us loyal Wolf readers think this market is anything but a bubble but I guess timing will be one tough SOB to nail down. As people always say, when most people are looking for one thing, black swain will appear out of a place no one expected. In this case, since so many people are looking forward to a crash, does this increase interest mean one is not likely to happen anytime soon based on mass market psychology? I sure hope that’s not that case but for us bubble watchers that’s been watching this played out over almost the last decade of never ending ascend, getting kind of quite sick of having eggs on my face over and over again.

    • Gomp says:

      Higher interest rates = Lower affordability. Remember, Ready, Willing, & ABLE Buyer.

  29. tolkapaim says:

    Not on topic .
    But unfolding covid Disaster in India .
    Currently 350000 new cases a day (conservative under reporting by a factor of 10)
    repurcussion on global oil demand & spread to other countries :
    500,000 cases a day by early may. (currently 350,000 “official reported new cases ” ( conservative estimate under reported by a factor of 10)
    800,000 to 1 million cases a day by Peak of the current wave (Mid may ) ———————-
    one of America’s most highly regarded epidemiologists and bio statisticians has said mathematical projections she has done suggest India could have 500,000 daily Covid cases and 3000 daily Covid deaths by the 1st of May.
    However, Prof Bhramar Mukherjee (Univ of Michigan)
    that in terms of infections the peak will come in mid-May
    when India could see 8-10 lakh daily infections and in terms of deaths the peak will be two weeks later in end May when India could expect 4500 daily deaths.

    • Jdog says:

      Covid is a propaganda campaign more than an actual real danger.
      The indisputable fact is that less than .5% of all Covid cases result in serious or critical cases. 95.5% of the cases are classified as minor.
      How many people do you actually know who have died, or been seriously damaged by Covid?
      I would be much more worried about why you are being deceived about the facts, and pressured to submit to experimental vaccines, which have not been FDA approved, and had not had enough testing to determine if they are truly safe or not.
      The fact is, unless you have been living in a bunker, you have probably already been exposed to Covid if the contagion numbers are even near accurate. If you have not been vaccinated, your natural immunities took care of it…

    • Mojer says:

      India has a population of 1.5 billion people so your data of 4500 deaths per day and an almost normal day for people dying of natural causes your numbers are teaching. BTW you are the wrong site here.

      Death rate: India
      7.3 deaths / 1,000 population (2020 )

      • Wolf Richter says:

        Recent analyses have shown that the official data on infection rates and deaths reported for India would need to be multiplied by 10 to come to a realistic picture. India has a major catastrophe on its hands.

        • Jdog says:

          Analyses by whom? There are more lies being perpetrated in the Covid scare than the last election……

  30. Patrick McMullen says:

    Sour grapes

    • drifterprof says:

      What grapes, are those, that you speak of?

      And who is rationalizing by calling them sour?

  31. Xavier Caveat says:

    I’d daresay that real estate by virtue of pretty much going up all the time and that rarity in our era of it being about the only commonly held fungible investment item, it has taken on a life of its own-a precious mettle of sorts, a safe haven against all else including providing shelter for termites.

    After 9/11 is when the housing bubble got going in earnest out of fear of the unknown future, and now the same thing is playing out, albeit with Covid providing the fear this go round.

    The big difference being that short term vacation rentals didn’t exist back in the day, which has skewed the market by would-be Hiltons rarely selling 2nd properties if that’s the main use.

    It seems like a marvelous time to unload a 2nd property, but as many have mentioned, what do you do with the moolah?

  32. breamrod says:

    just remember folks unless you’re just lucky you never get the top in anything when selling. Had a friend back in 2006 who sold a condo in Ft. Walton beach for 1.35 million and complained that had he waited two weeks he could have gotten 1.4. Two years later same condos were selling for 650. Lesson DBAGB( don’t be a greedy bastard)

  33. malibu says:

    Here is my indicator that I call the Q factor. It worked well in the 2008 RE implosion. It was based on a book I read about the Japanese R.E. wreck in the late 80’s. In that time the Japanese R.E. market went up 100% in one year. That was when the Imperial Grounds was valued at more than the entire state of California.
    Then I researched other markets like the Gold Market in 1980 which went up 100% in less than a year. The Nasdaq did the same in 2000,100%. The 1929 market over 40% as I recall. So there are a quite a few data points to support the Q factor.
    In the 2006-2008 R.E. market I was watching it for the 100% rise in R.E. Las Vegas was the winner with a +55% advance. So I changed the Q factor a bit to anything over +50% per year for the R.E. market is a big red flag. We are close here as Detroit went up +50% last year.
    As in 2006-2008 R.E. ,things took a bit to top out and down.

  34. José says:

    We just paid $60k over asking for a smelly cat/racoon fixer-upper house in the Denver area. Waived inspection, appraisal, etc. Excited to move in a few months when it is habitable.

    • Lisa says:

      Hope it’s not a meth house

      • José says:

        Lisa, I don’t think it was, just an old cat lady house. (Which is almost the same for practical purposes)

    • Lynn says:

      Raccoon you can use enzymes- buy them from a funeral home or police clean up supplier. Can also use for human or dog smells. Cats? You might have to tear out the wood it’s on. Good luck if you’re not doing it yourself. Hope they do it right.

  35. Minutes says:

    You buy something when no one wants it. You sell something when everyone wants it.

    I bought in 2011. I had family asking me why on earth I would buy because prices were continually going down. I wasn’t trying to catch the bottom. I figured it could go down more and planned on living there a long time.

    Today is the opposite. 50 offers for things. No one cares about inspections. Cash blah blah blah….So no you don’t have to think a crash is coming, but you surely need to realize you may not see any appreciation at best for a decade or more.

  36. Minutes says:

    I will add that houses are a depreciating asset. They cost money. A lot of money to upkeep. At the end of the day, the house horny forget this

  37. Micheal Engel says:

    1) The German DET10Y osc between minus 0.85 to minus 0.18.
    2) July 2016 low @minus 0.17 is a resistance line above.
    3) UST 10Y might be dragged down by US 3Y. US 1M is anchored to zero.
    4) First stop : gravity between the German 3Y and US 3Y can send US 3Y
    to NR.
    5) If ther will be a global recession DET10Y might breach the minus 1.00%.
    6) The next stop : US 3Y will drag US 10Y to NR.
    7) The gap between US10Y and the German 10Y will biden.
    8) If US10Y trend is down and USD trend is up, there will be a huge demand to US10Y even in NR.
    9) Stop #3 : high demand will send US10Y deeper into NR territory.
    10) Last stop : JP anchor to zero will break. Both US1M and 10Y will sink deeper in in the ocean, in a hyper deflation. Hyper deflation is the inverse of hyperinflation..

  38. Micheal Engel says:

    11) There will be a huge demand for US 10Y in NR. Certain commodities will not be available, because their extraction will stop, or blocked !

    • Xavier Caveat says:

      1) BLT on LBJ, book it

      2) Yes on no, a trade possibility

      3) 10Y = decade play

      4) RE, is the market real?

      5) Global overcapacity is lacking

      6) 3BM-see how they run

  39. DougP says:

    I don’t at all doubt that many are buying second homes, because that info is shown in terms of mortgages held by banks. What I wonder, and what may be assumed, is the reason.

    How does one know the motivation of these buyers? How many of these second-home buyers are buying because they can afford to do so and just want a home in another area as opposed to those just riding the market wave?

    • Bobber says:

      I think they are buying them because they can. The human wiring does not allow most people to appreciate what they have. They are always on the search for more.

  40. Investors are far more rational than you think. The term speculator is a misnomer. The speculator is the guy who understands risk and has a fancy quant fund. Liquidity is not the issue, and never will be until all central bankers are hanging upside down in the piazza. I try to imagine what script would have looked like to my grand parents after the bank closed their account at ten cents on the dollar. When the US segwayed into W2 we had rationing and a glimpse of devalued monetary policy. After the war there was YCC. In the depression property turned over at the tax sale, but the owners were already broke. You could hand those people (printed) cash, and it wouldn’t have made much difference. The land was barren and the market system was broken (price controls). Interest rates are the alpha and omega of price control. Perhaps the people now owning two or three houses are the ones who bought farm land on foreclosure in the 30’s. Charts indicate that the wealth disparity gap closed in that period , if it did it was a great opporunity for those had just a little more collateral. The poor are handed deflated dollars (gold was taken) and the rich acquire assets.

    • Depth Charge says:

      “Investors are far more rational than you think. The term speculator is a misnomer. The speculator is the guy who understands risk and has a fancy quant fund.”

      More bologna from you. I’d wager you’re just another degenerate gambler trying to justify it.

    • Phoneix_Ikki says:

      “Investors are far more rational than you think. The term speculator is a misnomer. The speculator is the guy who understands risk and has a fancy quant fund”

      Yup, totally rational just like when the bottom fell out for a brief moment before false GOD, aka FED decided to rescue at all cost. Now the bubble is being blown by a lame logic because the entire fundamentals is FED is the market and has forever put in place. Even compare to the logic of all previous bubbles, dotcom, GFC, at least those were based on a promise of a bustling future, this one is based on an entity won’t let us fail. Don’t you think the reasoning for this market to rally sky high is about as non rational as it comes?

      • Considering the expansion of the monetary base this rally has a lot more to run.

      • jon says:

        I totally agree with Phoenix.
        I am partially invested Bear at this time.

        Anyone who is not invested in real estate , stocks or bitcoin is doing a disservice to self financially.
        I don’t have any faith in any of these but I am partially invested, not All IN.

        • Anthony A. says:

          I’m 77 and only partially in the market too….but not in Bitcoin. Only a few good preferred stocks and an ETF in the portfolio. The rest is cash earning nothing. House is paid for and we can afford to live here until the end.

          We don’t need much, have good health insurance (Medicare and a supplement), cars are paid for and we are content living carefully. Income is SS + savings (no pensions). We had a good run, raised good children, have some good friends.

          I think our grand kids are screwed though. Not enough good jobs and there may be no middle class someday. Plus, they will be taxed to death.

  41. MarkinSF says:

    Like the mid to late 90s & the period covering the GFC the catalyst for the great reckoning will be the exodus of an entire tier of corporate mid level to upper level jobs. High paying jobs. Particularly in the FIRE industry where the “job” is not to produce anything of value but instead is an occupation where 1 middleman sells to another. As companies that do produce become leveraged to the hilt cost cutting will become an absolute necessity and those who will find themselves unemployed will be those managers and WC workers who do not actually produce anything of real value. All of these refugees will be scrambling for the jobs held by the next layer down and as such will impact that segment. Companies that survive will be lean and mean.
    When all this happens is anybody’s guess but just like the COVID awakening, ownership will suddenly conclude that survival (and more importantly profits) may be in serious danger and that these positions aren’t even really necessary. In fact, they are dead weight. At that point the universe turns to nightfall. The players with millions and billions stashed away will understand that it will be more profitable to let the markets collapse, pick up assets a dime to the dollar and let a new round begin. The FED is run by corporate America. Maybe not on paper but in reality they are the stepchild of the elite and will do as they are told.
    Long post and not totally reasoned but anyone who imagines we are living in a stable society where one fault displacement will bring the entire foundation to rubble can look to the recent past 30 years to see the direction we’re headed.

  42. lenert says:

    Not trying to be a pest here but how are you figuring the vacancy rate? Are you deducing it from the 2nd mortgage rate or am i missing something – which is most likely.

  43. Robert says:

    Playing devil’s advocate here, I think it’s possible that this rip higher on home prices still has much further to go. I agree in spirit with what Wolf’s said, because I’ve watched housing bubbles inflate and deflate several times. But this time could be different because of several game changing factors.

    1. Massive Inflationary increases in the raw commodities that support housing construction. Lumber is the best example. Look at a 25 year chart of lumber futures on tradingeconomics.com. This is multiples higher on what has gone on before. Is this speculation or real? I don’t know!

    2. Inflation in the salaries of the people who build homes, mostly the undocumented who are now treated like full citizens in many states. This will only get worse.

    3. Inflationary fiscal policies that are debasing the currency. I think this has much further to go and many see owning a home as a hedge against a declining US dollar.

    4. Many of the factors Wolf cited, such as dual home ownership and those who take their stock market winnings and pile it into new homes.

    5. People moving away from cities into homes instead of urban condos or apartments as a response to covid and flexible working arrangements.

    6. The Fed still has control over the bond markets and can keep short term rates near zero. People are forced to look for longer term investments for yield.

    The fact is that as long as the there is massive inflation in the underlying dynamics of the manufacture of new homes, then the value of existing homes will follow. The absolute price of a home is no longer relevant in a world of fiscal debasement and raging inflation. When the above 6 factors change, then my opinion on the direction of home prices will change. If the median price of a single family home goes to 600K then banks will merely reduce the monthly payment or down payment terms.

    Whether the Fed can keep long term rates suppressed indefinitely in an inflationary world is beyond my pay grade, but it is the single biggest threat to the housing bubble. Without the Fed’s intervention rates would have spiked already and taken some air out of this market.

    Still, right now is not a bad time to sell because, as Wolf said people will take the home without a lot of inspections and haggling.

    • Bobber says:

      Prices could correct fast if the Fed says it might start thinking about thinking about tapering. With lumber up 400%, copper at all-time highs, corn, wheat, and soybean moving up aggressively, I think that could happen in the next couple months. The spike in food commodities is particularly worrisome, because food price increases will be quite noticeable to the general public.

      On the day of this announcement, commodities and stocks could drop 10% at least. It wouldn’t be a formal announcement. Some former Fed egghead would likely plant the seed in an informal interview.

      Of course, if there is a 20% correction, the Fed and Treasury will panic and get the stimulus bill passed, which will bounce things right back up again.

    • Bart says:

      The issue w lumber is labor: need more drivers to haul logs
      Into the mill, people to cut and dry the wood and drivers to haul finished goods to lumber yards. Prices should start to subside late Sept.

  44. El Katz says:

    “The speculator is the guy who understands risk and has a fancy quant fund.”

    So, using your definition, please explain Wall Street Bets and Gamestop……

  45. Jared says:

    Excellent and succinct podcast, Wolf.

    I agree this is a mania, but who knows how long until the bubble bursts.

    Another commenter to another article brought up the possibility of 40 or 50 year mortgages. At this point nothing would surprise me—I believe the government will come up with more programs in Covid relief that will get bipartisan support. So maybe the 2.3 million homes in forbearance don’t hit the market.

    Meanwhile in Seattle, we looked at a house about a month ago that ultimately went for $145k over the listing price, which was $480k. Nothing special about the house or neighborhood.

    Looked at new construction this past weekend, townhome. Offer review today, as of last night no one had submitted an offer.

    • Alku says:

      in Sweden, for example, you could get 100+ years’ mortgages for at least 10 years.

      • Fat Chewer. says:

        I am at a loss here. Can you explain to someone who will never qualify for a loan (or want to) why the term of a loan would exceed the average human lifespan? Does this confer some sort of indentured servant status? Do you have to swear lifelong fealty to your bank? Can you take out these loans after you retire? Are they passed on to your children? Do you have to let the CEO have his way with your bride on your wedding night? So many questions. I know the world is strange all over, but this just doesn’t make sense to me.

        • José says:

          A 100 year mortgage is effectively an interest-only loan.
          Play around with the terms on a mortgage calculator and the further you go out, the less the payment changes until adding years to the term only cuts pennies off the payment.

        • Turtle says:

          A 30 year loan is essentially interest only too, given that most people sell after just a few years. People don’t even look at the amortization chart before they sign.

          I’m surprised 40 year loans are not standard already. People would totally fall for that one.

  46. gorbachev says:

    I don’t see a crash unless the interest rate moves biggly. Right now people seem to want assets
    not cash.

  47. RR says:

    Yeah, it’s crazy – lower-end condos in Mammoth Lakes, Calif. went up ~150K+ in March 2021 alone.

  48. Sri_U says:

    Another great article Wolf.

    It is possible that this sentiment will last several more months and take home prices much higher before they start going south.

    Housing sentiment takes long-time build in both directions and unlike stock market, it is not volatile.

  49. Micheal Engel says:

    1) U can click sell your house today, but the closing will be few month from now.
    2) Today might be few days before the top, but the closing will be beyond the top.
    3) What if your click came too late and ==> the king (RE) have no clothes.
    4) SPX daily. draw a horizontal line on Apr 21 close. Draw a second horizontal line on Apr 23 high.
    5) It’s illegal to click SL slightly above this zone.
    6) It’s stupid to click sell short SPX when the housing trend will never end. If wrong SL will save u from your own stupidity and from the hyperinflation.
    7) Ignore !

  50. John says:

    Question: what to do with proceeds from second house sale?

    Answer: buy physical gold and silver.

    • Wolf Richter says:

      Pay off the mortgage first?

      • Turtle says:

        “Pay off the mortgage first?”

        But people believe massive debt is their greatest ally, especially today.

      • I think the process is sell the first house, and transfer the mortgage on the second house to a third house, and own the second house clear. Then take out a HELOC on the second house. Did I say sell the first house? Never sell anything.

    • Uncle Bob says:

      “… buy physical gold and silver”. (A tad OT).

      Gold bullion is NOT an investment and WON’T do anything spectacular until the international monetary and financial system collapses. Whether or not that will happen is the only question you have to answer in your own mind before deciding whether to buy gold bullion. Forget silver. Forget gold mining shares.

      The current POG is determined ENTIRELY within the paper gold market (mainly the LBMA in London). It is not an evil, greedy bankster conspiracy. It is merely the current system. This totally suits the US which has the USD as the world reserve currency. A rapidly rising price for gold bullion would mean that the world was losing faith in the USD and hence the end of the US’s “exorbitant privilege”. One can imagine the USG attitude towards that being allowed to happen.

      Whatever your opinion, you should buy at least one US Gold Buffalo 1 oz. coin for the sheer pleasure of looking at it.

  51. Depth Charge says:

    When house prices are increasing more per year than the total median income, even the most mentally handicapped can see it’s not sustainable by any stretch. The crooked FED is presiding over an orgy of speculation, and encouraging it to get bigger and bigger. These people are criminals. Period.

    • Phoneix_Ikki says:

      You sure about that? Based on current perception and even friends of mine that I would consider relatively intelligent is jumping into head first now…I guess we definitely have more mentally handicapped people out there that can’t see the tree through the forest.

      On the other hand, the majority camp probably think people that are calling out the bubble like us are mentally handicapped because if you only know how many times I have heard people telling me, why would you throw your money away every month by renting? I swear, I could’ve buy a multiple million dollar crap shack in Santa Monica by now.

  52. Cash Guy says:

    But fortune[dot]com said “No, we are not in another housing bubble” a few days ago, lol

    • Phoneix_Ikki says:

      If you ask Lawrence Yun, he will do better, he will tell you we have never in history been in a bubble ever and supply is low since the 1920s well before he was born.

  53. rick m says:

    “Achetez aux cannon, vendez aux clairon” are these buyers hearing the cannons? The subconscious threat is somebody’s gonna decide your money’s no good regardless of how much you’ve got. And the pricing mechanism fails abruptly. So buy damn near anything with a roof now before the greater fool selling it does uncomfortable rethinking and quashes the deal. I don’t hear the cannons, just government drones mapping their tax base and sharpening their regulatory knives. They will kill the wealth organism if they cut too deeply, but they’re term-limited out of worrying about the future and constituents want freebies today. Horrible time to buy anything, I’ll rent, and fix other people’s houses for them. Trust in the glorious future of the Fix-A-Flat administration and dr Gary North ‘s four G’s(guns,gold,groceries, and God). These wokesters truly believe you owe them something, as a parental surrogate you should cover their excesses and provide breakfast in bed. This misapprehension will be harshly corrected soon. Nobody ever owed me anything in life, and I owe a lot of people for what I am, but they’re all older than me, and I can only repay indirectly. My contribution to the younger generation is not having kids to dilute the employment pool further. It’s too shallow now, diving not allowed. And the filter is making expensive noises.

  54. RB says:

    It certainly doesn’t help that the media isn’t helping by getting all the “real estate” pros who keep saying “oh prices are gonna keep going up (forever and ever!!!)”. Its almost as if the Real estate industry/Banks are paying off the media to lie to buyers. (Sarcasm,… not really)

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