2023 Market activity = almost equal to 2022 market equity

[Carlos Ptriawan]

https://www.redfin.com/news/ho... 

Looking at various chart above, my impression is this 2023 market is still too strong , market is following 2022 price/inventory pattern except with even lower inventory than 2022 and pushing the price of May 2023 to be equal to May 2022. 

I guess SEC action to 'mini crash' the real estate failed miserably LOL It's just so strange that market is too strong that almost nobody willing to sell. 

Almost everyone that's predicting a crash in November 2022 is wrong, @James Hamling

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

I found these quotes interesting from Jerome: 

“It will be appropriate to cut rates at such time as inflation is coming down really significantly. And we’re talking about a couple of years out.“

"I think, as anyone can see, not a single person on the committee wrote down a rate cut this year -- nor do I think it is at all likely to be appropriate if you think about it."

 The inflation is still 4% due to rent increase which is increased after property home value , so Fed failed in those aspect , as well as failed to crash the job market.

Why would fed cut rates though with stocks, home values, and jobs holding up unless CPI is in the 2s? All this talk about rate cuts seems like just wishful thinking? It’s pretty unanimous from the fed members too. 

James makes good points that mathematically this system can’t support what the fed is doing for long, but the fed believes it can. What’s the breaking point? 

 Fed already mention inflation target is 2 % at eoy of 2024.

by that time rate ffr would reach 3% to match with the inflation target.

 Why isn’t the median projected fed fund rate at 3 percent then for forward guidance?

 What the Fed does is actually just matching the Fed REAL rate to actual inflation rate, 

If inflation is 4% and rate is 5% our actual interest rate is 0 or -1%.

inherently when we reach 2%c, the ffr rate would be 2 to 3% and not 5%

[James Hamling]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

I found these quotes interesting from Jerome: 

“It will be appropriate to cut rates at such time as inflation is coming down really significantly. And we’re talking about a couple of years out.“

"I think, as anyone can see, not a single person on the committee wrote down a rate cut this year -- nor do I think it is at all likely to be appropriate if you think about it."

 The inflation is still 4% due to rent increase which is increased after property home value , so Fed failed in those aspect , as well as failed to crash the job market.

Why would fed cut rates though with stocks, home values, and jobs holding up unless CPI is in the 2s? All this talk about rate cuts seems like just wishful thinking? It’s pretty unanimous from the fed members too. 

James makes good points that mathematically this system can’t support what the fed is doing for long, but the fed believes it can. What’s the breaking point? 

Ok, John, BIG difference in what Fed "thinks" and what it's SAYING. 

Keep in mind, the Fed is right now engaged in DEMAND DESTRUCTION. So, even if they all know with certainty that by EOY '23' they will be enacting a rate step down to by mid '24' meet a lowered rate necessity, they CAN NOT "telegraph" that to everyone. The NEED to say, this is the new-norm, enduring, and to STOP waiting. Why? DEMAND DESTRUCTION. Which the Fed has said what, 40 times that they are engaging in Demand Destruction. 

You have to put everything in context. They are trying to shape consumer habits, and that is via actions AND messaging. 

Math is clear on commercial finance and the actions that forces and the timelines for such. But few know of this, the "average Joe" does not live in this world of comprehension. Today we are in a consumer "acceptance" phase, and during that it's paramount to hold steady. Because as more and more move into acceptance, we have a leveling in consumer and economic activity. All the data coming in now clearly shows this flushing through now, we are 1-2Q's away from completion of this per the data. 

And where does that put us, yup, ~12-18 mnths from today. 

I wouldn't be surprised to see the step-down start to happen Q4 '23' as seasonal market adjustments start stepping down, that seems a best timing and data is lining up for such. Ask yourself, when can rates start stepping down and have less chances of educing Hot-Inflation? 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

I found these quotes interesting from Jerome: 

“It will be appropriate to cut rates at such time as inflation is coming down really significantly. And we’re talking about a couple of years out.“

"I think, as anyone can see, not a single person on the committee wrote down a rate cut this year -- nor do I think it is at all likely to be appropriate if you think about it."

 The inflation is still 4% due to rent increase which is increased after property home value , so Fed failed in those aspect , as well as failed to crash the job market.

Why would fed cut rates though with stocks, home values, and jobs holding up unless CPI is in the 2s? All this talk about rate cuts seems like just wishful thinking? It’s pretty unanimous from the fed members too. 

James makes good points that mathematically this system can’t support what the fed is doing for long, but the fed believes it can. What’s the breaking point? 

Ok, John, BIG difference in what Fed "thinks" and what it's SAYING. 

Keep in mind, the Fed is right now engaged in DEMAND DESTRUCTION. So, even if they all know with certainty that by EOY '23' they will be enacting a rate step down to by mid '24' meet a lowered rate necessity, they CAN NOT "telegraph" that to everyone. The NEED to say, this is the new-norm, enduring, and to STOP waiting. Why? DEMAND DESTRUCTION. Which the Fed has said what, 40 times that they are engaging in Demand Destruction. 

You have to put everything in context. They are trying to shape consumer habits, and that is via actions AND messaging. 

Math is clear on commercial finance and the actions that forces and the timelines for such. But few know of this, the "average Joe" does not live in this world of comprehension. Today we are in a consumer "acceptance" phase, and during that it's paramount to hold steady. Because as more and more move into acceptance, we have a leveling in consumer and economic activity. All the data coming in now clearly shows this flushing through now, we are 1-2Q's away from completion of this per the data. 

And where does that put us, yup, ~12-18 mnths from today. 

I wouldn't be surprised to see the step-down start to happen Q4 '23' as seasonal market adjustments start stepping down, that seems a best timing and data is lining up for such. Ask yourself, when can rates start stepping down and have less chances of educing Hot-Inflation? 

 Yes and they don’t want to reduce the rate too soon as it may trigger inflation too soon so rate down next year is making sense.

the key here is not fed rate but inflation number.

the fact that home price is still rising is another signal that they have to delay to cut the rate down

[David Torres]

@John Carbon

Here in WA it's even more expensive than 2022 for properties under 700k