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2023 Market activity = almost equal to 2022 market equity

Carlos Ptriawan#1 Market Trends & Data Contributor
Posted Jun 4 2023, 07:29

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

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Replied Jun 7 2023, 13:54
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
I don’t believe todays prices reflect todays rates. 

How can you think such? Todays prices absolutely reflect today's rates. How can they do anything but? Ones financing is with todays rate is it not? Approvals are on todays rates. 

If inferring that investor purchases, are on future value play, ok, but be clear on that and let's detail that investor purchases denote "as much as" 7% of SFH transactions, at best. And one can't argue 100% of investor purchases are of the 1 mindset, so what "as much as" 50% are, so we are talking at best 3.5%?

That leaves 96.5% or more, of real estate transactions today, price reflecting todays rates. 

Rates did not move from 4 last month, this has been a long road to where rates are today. We are many months into this, it is a fact that todays prices are based upon todays rates. 

AND I will note, that 10% decline has not happened all places. Many markets have not had a 10% decline, some, many, have held flat OR even gone UP. Not to mention if your picking specific months to infer a drop, is it an actual drop or seasonal adjustment? 

Below is a 12mnt data read and one showing the monthly that reflect seasonal variations. As one can see, seasonally adjusted clearly shows record highs, still, and continuing. 

While I don't argue there is markets out there that have had a decline, some expectedly so, it's FAR from a truth of the market as a whole or everywhere. Seems that you've got tunnel vision due to your local market actions. 

Inventory holding in historic lows/shortage

And even digging to find anything to argue a decline, going to price per sqft, even that holding at historic new highs. 

This is direct data from the MLS itself, 0-filtering 0-manipulation. No 2nd/3-rd hand takes, direct from the source itself. And it CLEARLY shows no-decline of 10% your consistently referencing, in a major national market.

If I had the direct data feed from others I'd add those. Maybe other Brokers with similar access would like to jump in to help clarify the actual data from the opinions, feeling, thoughts. 

I get it if you have a feeling of prices going down, the media has sure tried pumping that narrative. But reality on the ground simply isn't so. 

And if you feel it is, ok then, it's just a statement that I have the #1 best market in the U.S. under my thumb and without doubt where all should be investing, right? because the data clearly shows, not only no 10% decline, but INCREASE in same timeframe, right. 

Just because people are paying more for housing now doesn’t necessarily mean it reflect todays prices. It’s possible and probable people are overpaying now betting on the future that they will refinance to a lower rate later on. John Q and his wife need a home, they figure they will extend themselves a little by paying $600 more a month due to higher rates (maybe they keep their vehicle longer than expected), their new home builder gave them a rate buy down and they had their closing costs covered etc etc and the homebuyer feels good about their purchase. If rates do drop in the next 1-2 years then they will feel great about their decision. If their buydowns expires and rates aren’t down and their payment goes up another $500….and that old car they have been holding on to breaks down and they need a new car and now a new car payment is $700 because rates in autos are 6-7 percent…I mean Americans always used to live paycheck to paycheck there isn’t much slack for most to absorb. 

this economy isn’t built on high rates for long durations. Looking at the auto industry now they are stockpiling inventory. The Covid stimulus is running thin right now. I think anyone who could afford a house at current rates already has one, some investors are still buying, but these institutions get insider deals and terms to make it worth their while to still be investing. Powell could surprise and keep rates high for all of this year and next year, if that happens it definitely will be trouble for housing market. Your reasoning for them cutting makes sense and that’s what the market is pricing in too (which is reflective in the housing values having a support floor). I never said twin cities prices are dropping in value, in many markets prices are down up to 10 percent though, your charts seem to show twin cities. Still though, even in twin cities housing didn’t beat inflation or 5 percent treasuries in terms of appreciation so the past 12 months there has been a risk free method to beat housing which is a first in many years. 


John.... I feel like I'm talking to a brick wall here. 

Your ignoring half of what I am saying, most of the data I share, and all of the points. 

Your every argument John is assumptions, wrapped in a a box of assumption, with a bow of "I think"....    Do you not see how your stretching to try to make your assumed premise true? 

You say "oh, but but but, uhmmm, those buyers are, uhm-aaah, there only buying now with plans to refi, yeah, that's it, there ONLY doing it to refi" LMAO, really..... come-on-man. Ok, so a few hundred of thousand transactions a day, there all just doing it ignoring today, planning on a rapid refi....... Holly stretch-man.  

TODAYS PRICES REFLECT TODAYS RATES, period-full-stop-end-of-story.     I get how that 1 fact blows your entire assumptions out of the water. Now IF you were an investor, you'd stop there and go "Huh, wow James, I never thought of it like that. yeah, I see that, and the data, it really proves that. Huh, ok, so yeah, when rates shift, I get it, I GET IT NOW, yeah, prices will jump up". 

But no, you dig deep, and throw out the most ridiculous stretch "Uhmmmm, there all only buying now to refi tomorrow" lol....... 

Weren't you flipping out on me John last fall saying how certain you were real estate was going to collapse this past winter? Yes you did. You spammed and trolled my posts than, in a total tirade on how you were so correct, I was such an idiot in my THOUROUGH forecast for a volume collapse, with prices holding in many markets, market specific deviations, and a move UP in prices Q2.     Well here we are, what happened?

Come on John, I am calling you out: who was right? What did I forecast? What happened? What did you say would happen?      If there were an award for market forecasts I'd be with the Oscar in hand now. It's fleshed out EXACTLY as I forecasted, and that's because I follow the data NOT emotions. 

You went bananas for page after page on it, it's archived here on BP for all to find and review. It's how you earned your first block from me, remember that? 

But here you are again, so dang focused on being "right" vs accurate. 

When I forecast half of the crazy things I have, and nailed them I have said I hope I am wrong, and my economic forecast, yeah, I hope I am wrong, I do, because it's a sucky outlook, but I follow the math wherever it leads me. I am not the one making forecasts, the math is, I am just it's voice, a translator let's say. yeah, that feels most accurate, a data-translator. 

So get as pissy as you want with me, it matter not, the data and math says what it says regardless of your freak-out's on me, I'm just the dang translator. 

Now, today is a TIME TO BUY, because the unleashing of the buyers is just a few steps down the road. Exact day, I don't know, math/data isn't telling me that, but it's saying it's within next 16-18 months. It could be as soon as 14. 

Check bond and CD charts, the data/math is singing away there, just listen. 

Rate buy downs James. Last year you were talking them up as a way to get lower mortgage payments. You definitely nailed this and this has happened. When you buy a home with a rate buy down what does it do? It artificially lowers the payment for the homebuyer so that they can afford a higher purchase price. It's very similar to the teaser rates in early 2000s, but not nearly as bad this time around. So what happens james is, by default, with SFH purchased by rate buy down homeowners they have a year or two until higher payments kick in. Developer or realtor doesn't care though once the closing happens. Everyone is predicting rates will drop in a year or two, possibly will happen, but since everyone believes it real estate values haven't dropped as much because the feel like they have the FED floor beneath them. So yes, the prices people are paying now are real (they are still down double digits in many markets). But it is reflective in what is priced into the markets (ie, lower rates in a year) which is also why equities are doing so well. The fed is a genius pulling this off. They raise rates and the market doesn't believe them, so they get to slow down inflation without a crash because people like you James and everyone else believes it's temporary. Powell really is a genius.

I never said real estate was going to crash. I said a 20-30 percent drawdown by end of 2023 on the median sales price. I think it’s still trending towards that if fed doesn’t cut rates which has always been my position.

lastly, my main point last year was that it was wise to take off a year or two from real estate and invest in other risk free alternatives. I don’t know ANYBODY without a bias or agenda who has said “John…I wish I had bought Q3/Q4 2022 I missed the boat”… Why won’t you admit that real estate is down the last 12 months adjusted for inflation and investing in 5 percent treasuries is a better position. This is the first time in over a decade where this has been the case. 

18 months from now we will agree on everything.


"Why won’t you admit that real estate is down the last 12 months" - Because it's not.... I literally posted charts clearly showing it is NOT, look up, it's right there. Why would I call up as down? Sorry, the #'s show UP. I can't support your feeling things are down double digit's, because there not.     Pull up the market MLS data-feed for what market your saying is down double digit's and post it. Because as i said before, if your saying "everywhere" well, nope, LOOK UP, Twin Cities is UP. 

I don't have every direct data-feed so I can't post them. Maybe others will help out and post there's. Than we will see what the #'s say. 

I don't know what your talking about with rate buy-downs, certainly nothin I ever said or presented. Rate buy-downs are a marketing tool, a band-aid to drive sales in the moment, and that's what I was advising finance brokers when they were asking me about doing such last year. I told them play with it but don't go to deep, it's a marketing ploy that's it. 

I don't know where your pulling this false-narrative that I believe what-ever is "temporary". I have been really clear, detailed and uniform in stating the "NEW NORM" and not of anything in a transient nature. We are in a major market shift, and re-pricing, in a sense some things are short-term because we are in the flow of this change, but the change is not temporary, i have been clear on this. 

Now the rate levels, they are NOT sustainable in any enduring manner. Big difference between that and "temporary". They may seem the same, they are not. 

Rates, mathematically, can not hold at this level for much longer because of all the things that will implode from it. First one, everything commercially financed. There is a ticking time-clock, and it's already started hitting expiration on the first ones. Every Q that goes by it get's bigger and bigger, creeping closer and closer to a MOUNTAIN of commercial finance that is un-serviceable at current rate environment. These rates are driving at a brick wall. It would be suicide to keep going, everyone knows this in banking, and that's why everyone in banking knows the dates the rates WILL drop by, because they literally have to.     Tinfoil hat club can argue the gov. could smash headlong into it, yeah, in theory they could, at cost of their political lives, it's suicide. 

FYI, my wife is CFO of a private finance institute, I am "in the room". 

You havn't read enough BP posts if you don't know of any lamenting they didn't buy in '22' vs now. I have these conversations weekly, if not daily. Persons who bought into the hype of an eminent "crash" which of course never happened. 

Look, your statement that your NOT forecasting a "crash" just a 30% drop in median home value, is the definition of oxymoron. A 30% drop in median home value IS a "crash". So your saying your not predicting a crash, your just predicting a crash....

When bonds are high that's the time to buy. Because when bonds drop, where is that $ going to go? Your missing the point, coming back in to buy R.E. when everyone else is buying R.E. is foolish, your only assuring less purchasing power. Buy low, sell high, it's a simple universal paradigm. 

A step beyond all this, I see NOTHING being resolved in next 12-24 months. No, this is a looooong roller coaster ride and things are going to be a mess for a very long time. 
WHEN, when NOT if, rates come down to avoid the "everything implosion" which is really a commercial finance implosion, residential real estate will take off like a rocket. And with that, HOT inflation will yet again rage. 

Now how much of that will phase over into general economy, anyone's guess but historically residential real estate is a MAJOR driver to the economy in whole, so it's very plausible and conservative to expect economic wide HOT inflation from such. 
So, depending on how they band-aid commercial finance, will probably launch into another phase of extreme tightening. 
And than something else will strain and start to break. So, back on the gas. 

Picture this, it's like were in a car that if let of the gas, the motor will stall, so gotta keep peddle to the floor. BUT were on a winding road up a mountain of switch-backs, so we run full out and off-a-cliff we go. So, were in an alternating patter of slamming on the brake, slamming on the gas, break, gas, break, gas....... 
And all this with notion that at some point we will get somewhere of level ground to just, coast.... maybe.... 

I don't see a way out, and the chatter is ever increasing of the same. I hear more and more coming not only to acceptance but encouragement of a dollar default and currency swap as the solution. Only way to "clean house" and get a reset. 

Not to mention biggest holder of U.S. debt is China so.... yeah.... could be a ultimate F-U card to play, would cost lopping off a limb for U.S. to do it but could decapitate China so, worth it, maybe? 

Regardless, the life-boats are tangible assets of utilitarian value, which real estate is king. 
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Replied Jun 7 2023, 15:09

"Why won’t you admit that real estate is down the last 12 months" - Because it's not.... I literally posted charts clearly showing it is NOT, look up, it's right there. Why would I call up as down? Sorry, the #'s show UP. I can't support your feeling things are down double digit's, because there not. Pull up the market MLS data-feed for what market your saying is down double digit's and post it. Because as i said before, if your saying "everywhere" well, nope, LOOK UP, Twin Cities is UP.

twin cities might be "up" slightly, but it is not beating inflation/short term treasury yield. you are so fixated on Minnesota real estate (i get it that is your market), but Minnesota is slightly more than 1% of the USA population, so its rather insignificant to the overall market. however, housing is down in many many markets. is this article from the onion? i don't think so

https://www.ocregister.com/202...

__________________________________________________________________________________

I don't know what your talking about with rate buy-downs, certainly nothin I ever said or presented. Rate buy-downs are a marketing tool, a band-aid to drive sales in the moment, and that's what I was advising finance brokers when they were asking me about doing such last year. I told them play with it but don't go to deep, it's a marketing ploy that's it.



Rate buy downs are a band aid like you claim. they are sold with the idea that rates will be lower in the future when your buydown expires and you will be able to refinance it into a fixed rate. that has been the major push since rates began spiking. its gambling on the future interest rates being lower, therefore, it allows a larger pool of homebuyers to be able to afford higher prices with temporary lower interest rates, so logically home prices wont budge much, still enough to be down in most markets based on the aforementioned article, and by even your own market, real estate has not beaten inflation the last 12 months. 

____________________________________________________________________________________



I don't know where your pulling this false-narrative that I believe what-ever is "temporary". I have been really clear, detailed and uniform in stating the "NEW NORM" and not of anything in a transient nature. We are in a major market shift, and re-pricing, in a sense some things are short-term because we are in the flow of this change, but the change is not temporary, i have been clear on this.


you have been predicting a temporary consolidation in real estate.

____________________________________________________________________________________



Look, your statement that your NOT forecasting a "crash" just a 30% drop in median home value, is the definition of oxymoron. A 30% drop in median home value IS a "crash". So your saying your not predicting a crash, your just predicting a crash....

My statement was that median home values nationally (i use nationally because its the only way to measure the overall market) would drop 20-30% from the peak. so far that is a 10% drop according to FRED since Q4 2022 - this is gov data please dont try to dispute the facts here. I also said it will take 18-24 months to play out and that by the end of 2023 it will be fairly obvious we are there. I'd say being 10% down from the peak is definitely on pace for my 20% prediction. I never predicted "crash", as you know real estate in and of itself can never "crash" it moves in phases and things take time to develop. It's not like a stock that can crash instantly, therefore i always have phrased my prediction as a 20-30% correction over a 1-2 year period. 

_________________________________________________________________________________


When bonds are high that's the time to buy. Because when bonds drop, where is that $ going to go? Your missing the point, coming back in to buy R.E. when everyone else is buying R.E. is foolish, your only assuring less purchasing power. Buy low, sell high, it's a simple universal paradigm.


ok so, if you look back to 2020 when mortgages first hit sub 3%, real estate prices were ridiculously low. It took 2 years of ultra low rates for the real estate market to price in the low rates into the housing market. Real estate doesn't crash just like it doesn't go have price discovery to the upside immediately. thing about that for a minute. real estate went up double digits in 2020 and 2021 and somewhat more in 2022 before the rate hikes happened. Same is happening now but in reverse. The longer rates stay high, the market will slowly get squeezed more and more lower. your comment here shows a lack of understanding of how real estate is priced, and you are also speculating that rates will drop soon (i dont disagree with you, but you ARE speculating on this) 


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Replied Jun 9 2023, 11:09
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

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Replied Jun 9 2023, 11:21
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 

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Replied Jun 9 2023, 11:30

Today's price absolutely reflect today's rate. As each market is hyper local.

This Q2 post school splurge is typical, and the q4 stagnation is predictable. The underlying property will likely not trend down in any growing area. Relative to Q4 22 prices.

Does this mean you should buy or not buy? Dollar cost average into this, too. If you're "waiting" on rates or a crash, there's a bunch of people also waiting. This won't take 18 months to show but probably Q2 2025 in it's full force.

Buy good properties in good areas in growing cities. A baseline estimate of your floor is land value + cost to build. If you're buying <25% over that you're doing great.

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Replied Jun 9 2023, 12:36
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 


.... I posted the DIRECT data from the MLS itself. I don't know how it get's any more clear than that.

I don't care what articles say in any direction on their opinion of what the #'s are, I have the actual #'s, that's it, full-stop. Internet is over-pouring with disinformation today, it's all bias confirmation. Hence why I say SHOW ME THE DATA not articles on opinions of the data. And why I posted the DIRECT untouched, unbiased, unfiltered DIRECT data. 

This feels a lot like trying to convince someone the planets NOT flat.... 

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Replied Jun 9 2023, 12:38
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 


.... I posted the DIRECT data from the MLS itself. I don't know how it get's any more clear than that.

I don't care what articles say in any direction on their opinion of what the #'s are, I have the actual #'s, that's it, full-stop. Internet is over-pouring with disinformation today, it's all bias confirmation. Hence why I say SHOW ME THE DATA not articles on opinions of the data. And why I posted the DIRECT untouched, unbiased, unfiltered DIRECT data. 

This feels a lot like trying to convince someone the planets NOT flat.... 


The redfin data isn’t accurate? 

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Replied Jun 9 2023, 22:24

@Carlos Ptriawan

If we weren’t 4-5 million homes short nationwide it would be a different story. Low supply will cause high demand. And I don’t see builders catching up in the next couple decades, so expect 3-5% or more annual appreciation indefinitely. And if rates come down, expect 5-10% appreciation rates like last year.

And all the housing “expert” market crash predictors who have had their cash locked and loaded since 2020 will remain on the sidelines while the rest of us continue to dollar cost average with buying more and more RE in good times and bad. lol

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Replied Jun 10 2023, 08:08
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 


.... I posted the DIRECT data from the MLS itself. I don't know how it get's any more clear than that.

I don't care what articles say in any direction on their opinion of what the #'s are, I have the actual #'s, that's it, full-stop. Internet is over-pouring with disinformation today, it's all bias confirmation. Hence why I say SHOW ME THE DATA not articles on opinions of the data. And why I posted the DIRECT untouched, unbiased, unfiltered DIRECT data. 

This feels a lot like trying to convince someone the planets NOT flat.... 


The redfin data isn’t accurate? 


How many times do I have to repeat myself? 

I posted THE MLS DATA, from THE MLS itself. Now you keep asking "well so-and-so says the mls info is ___, but it's different from the actual MLS data you posted James, which is correct".... DUH, seriously, DUH.

As I said, now 3rd time, show me THE DATA, not someones opinion of the data, not someones retelling of the data, not some companies account of the date, THE ACTUAL DATA as I posted. 

This is now repetitious. 

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Replied Jun 10 2023, 08:13
Quote from @John Morgan:

@Carlos Ptriawan

If we weren’t 4-5 million homes short nationwide it would be a different story. Low supply will cause high demand. And I don’t see builders catching up in the next couple decades, so expect 3-5% or more annual appreciation indefinitely. And if rates come down, expect 5-10% appreciation rates like last year.

And all the housing “expert” market crash predictors who have had their cash locked and loaded since 2020 will remain on the sidelines while the rest of us continue to dollar cost average with buying more and more RE in good times and bad. lol


While I 100% agree with, and "get", what your meaning here, I just want to point out the exact wording of it is a bit wonky and expect some to focus on that vs your intentions and meanings. 

Low supply does not CREATE high demand. It's does accentuate an existing demand, ad's a FOMO aspect, a "call-2-action" quotient, but lack of supply itself does not create demand. 

Again, I agree with where your coming from, just describing things a bit wonky. 

As for builders, there throttling production, and it's smart. 

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Replied Jun 10 2023, 08:19
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 


.... I posted the DIRECT data from the MLS itself. I don't know how it get's any more clear than that.

I don't care what articles say in any direction on their opinion of what the #'s are, I have the actual #'s, that's it, full-stop. Internet is over-pouring with disinformation today, it's all bias confirmation. Hence why I say SHOW ME THE DATA not articles on opinions of the data. And why I posted the DIRECT untouched, unbiased, unfiltered DIRECT data. 

This feels a lot like trying to convince someone the planets NOT flat.... 


The redfin data isn’t accurate? 


How many times do I have to repeat myself? 

I posted THE MLS DATA, from THE MLS itself. Now you keep asking "well so-and-so says the mls info is ___, but it's different from the actual MLS data you posted James, which is correct".... DUH, seriously, DUH.

As I said, now 3rd time, show me THE DATA, not someones opinion of the data, not someones retelling of the data, not some companies account of the date, THE ACTUAL DATA as I posted. 

This is now repetitious. 

I guess we will never have data then, because who is going to go through every market and pull in mls data. Isn’t that what core logic, case Schiller, Redfin, St. Louis fed, isn’t that what they do? 

regardless, even by your own data, housing did NOT beat risk free treasuries or inflation in the last 12 months, which was the whole premise last year that “we are finally at a point where you won’t lose out by waiting on a home purchase” and that has come to fruition (first time in over a decade where it has been true) momentum has shifted and the longer rates stay high the lower and lower demand goes (I agree supply is at record lows, but demand is ridiculously low - running out of people that can accord at these price levels/rates).


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Replied Jun 10 2023, 08:29
Quote from @John Morgan:

@Carlos Ptriawan

If we weren’t 4-5 million homes short nationwide it would be a different story. Low supply will cause high demand. And I don’t see builders catching up in the next couple decades, so expect 3-5% or more annual appreciation indefinitely. And if rates come down, expect 5-10% appreciation rates like last year.

And all the housing “expert” market crash predictors who have had their cash locked and loaded since 2020 will remain on the sidelines while the rest of us continue to dollar cost average with buying more and more RE in good times and bad. lol

Anyone who wasn’t buying in 2020, 2021, or early 2022 when rates were way below inflation and stimulus being poured out is just quite frankly an idiot. If you couldn’t read the tea leaves then you have no business of ever being in real estate. My last purchase was early 2022 at 3.6 percent mortgage rate. I’ve since been on the sideline, Jerome powell got me in line, and I’ll gladly do so. At 5 percent treasury I have no incentive to buy overpriced real estate. In virtually every market since rates have risen, no investor has missed out on anything, in fact, they are worse off. There is a massive demand shortage to go along with the “housing shortage”.  Housing doesn’t need to “crash” in nominal terms for it to be a lousy investments in a high interest rate environment. Show me deals where you have 7-8 percent interest rates and are not losing money each month. Please, I’d love to see it especially in the dfw market where your insurance and taxes are at comical levels. 
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Replied Jun 10 2023, 19:48
Quote from @Mason Liu:
Quote from @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


This isn't super useful pertaining to the conversation, but I just wanted to point out that the SEC isn't involved in Fed decision at all. The SEC is an independent federal agency.

 sorry I should have said Fed from beginning LOL

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Replied Jun 10 2023, 19:53
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @John Carbone:

John, I completely understand why you would say I am speculating on rates coming down in next few Q's, I get it, but I am NOT speculating, NOT SPECUALTING. It's not my opinion, it's not my feeling, it's a FACT of math, politics and economics. 

Please, read this word-4-word: Rates HAVE-TO sharply drop in very near term, ~16 months. It's an economic and political NECESSITY. The only alternative is some form of a TARP 2.0 specific for commercial finance/banking world, that could be an option that alleviates that mathematical requirement BUT good luck selling the public on such a thing. 

There is a mathematical FACT that the world of commercial finance has a mountain of NON-serviceable debt if/when it resets to todays rates.     

The '08' collapse was a nearly identical issue but with residential notes. 

To do nothing, is political suicide. It is banking suicide. There is a long list of entities that will go insolvent if nothing is done. They have lobbyist. I guarantee you, they are blaring in ear's of politicians to TAKE ACTION and if they don't, there gonna take-em down with them. 

Current rates are unsustainable in a long term endurance of where they are for fact of things are breaking from such. This is not an opinion, it's a fact of math. 

As I have said 3 times previously READ the bond charts. They universally reflect a BIG rate DECREASE after 13mnths from today. Are they all "speculating"? Just by chance ALL banking and finance is speculating the exact same thing? Come on man, it's obvious. 

You gotta stop ignoring the whole of what I put out, ignoring context, and taking micro items. I am not obsessed with MN market, I said twice, it's the one I have DIRECT MLS data feed for and that's why I am using that one and not talking of those I don't have direct MLS data feed to share.

As I said, your saying all these markets in decline, SHOW US THE DATA. No, not opinion articles, DATA. Where's the DATA? 

As I have said a national average is garbage data. Guess what, I could show you a national average data for this month that guess what, shows that the "average" home in N. AMerica has 10sqft on fire, right now, today. Is 10sqft of your yard on fire? Well, that's what the statistics show, because in 1 area hundreds of thousands of hectares ARE on fire, so, average it across everywhere, everyone has a lawn on fire. Welcome to why there are 2 kinds of lies; damn lies and statistics

I don’t disagree with your reasoning for rates going to be down. Everyone is speculating on what Jerome powell and co will do. Jerome isn’t an elected official, and he was appointed initially by a Republican. I can read bond charts though, that’s my speciality with real estate on the side. It’s still the overall market speculating on what the fed will do. Conversersly, the bond market didn’t anticipate 2 years ago that we would be at 5 percent on fed funds right now. The bond market was wrong then (which is why the regional banks that failed, failed. See my point?


is this data accurate from Redfin? Shows a nominal decline for the state of Minnesota. 


.... I posted the DIRECT data from the MLS itself. I don't know how it get's any more clear than that.

I don't care what articles say in any direction on their opinion of what the #'s are, I have the actual #'s, that's it, full-stop. Internet is over-pouring with disinformation today, it's all bias confirmation. Hence why I say SHOW ME THE DATA not articles on opinions of the data. And why I posted the DIRECT untouched, unbiased, unfiltered DIRECT data. 

This feels a lot like trying to convince someone the planets NOT flat.... 


The redfin data isn’t accurate? 


How many times do I have to repeat myself? 

I posted THE MLS DATA, from THE MLS itself. Now you keep asking "well so-and-so says the mls info is ___, but it's different from the actual MLS data you posted James, which is correct".... DUH, seriously, DUH.

As I said, now 3rd time, show me THE DATA, not someones opinion of the data, not someones retelling of the data, not some companies account of the date, THE ACTUAL DATA as I posted. 

This is now repetitious. 

I guess we will never have data then, because who is going to go through every market and pull in mls data. Isn’t that what core logic, case Schiller, Redfin, St. Louis fed, isn’t that what they do? 

regardless, even by your own data, housing did NOT beat risk free treasuries or inflation in the last 12 months, which was the whole premise last year that “we are finally at a point where you won’t lose out by waiting on a home purchase” and that has come to fruition (first time in over a decade where it has been true) momentum has shifted and the longer rates stay high the lower and lower demand goes (I agree supply is at record lows, but demand is ridiculously low - running out of people that can accord at these price levels/rates).



 housing beat the risk-free 5% interest rate in some markets if one purchase at the correct time.

if one is buying a typical 3/4 BR in November 2022, and sell it in June 2023, the return is already over $150k-$200k in our area and that's way beyond 10% before tax of course LOL. 
 
But not if you purchase in Cleveland.


For this --->
(I agree supply is at record lows, but demand is ridiculously low - running out of people that can accord at these price levels/rates).

What I found is what makes the drop in Q3-Q4 2022 is not increasing demand, but increasing supply from FOMO seller.

In 2023, demand only has slight uptick but the supply ratio is almost at all time low.
What we see in housing market is similar to reverse-stock-split in housing market. Stable demand with decreasing supply.


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Replied Jun 10 2023, 19:58

Also one thing.

The demand in CF market is increasing due to investor demand. Highest appreciation: Milwaukee.

The demand in appreciation market is mildly-increasing in OO market due to primary occupant.

This is why June 2022 = June 2023. Strange

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Replied Jun 10 2023, 21:56
Quote from @John Carbone:
Quote from @John Morgan:

@Carlos Ptriawan

If we weren’t 4-5 million homes short nationwide it would be a different story. Low supply will cause high demand. And I don’t see builders catching up in the next couple decades, so expect 3-5% or more annual appreciation indefinitely. And if rates come down, expect 5-10% appreciation rates like last year.

And all the housing “expert” market crash predictors who have had their cash locked and loaded since 2020 will remain on the sidelines while the rest of us continue to dollar cost average with buying more and more RE in good times and bad. lol

Anyone who wasn’t buying in 2020, 2021, or early 2022 when rates were way below inflation and stimulus being poured out is just quite frankly an idiot. If you couldn’t read the tea leaves then you have no business of ever being in real estate. My last purchase was early 2022 at 3.6 percent mortgage rate. I’ve since been on the sideline, Jerome powell got me in line, and I’ll gladly do so. At 5 percent treasury I have no incentive to buy overpriced real estate. In virtually every market since rates have risen, no investor has missed out on anything, in fact, they are worse off. There is a massive demand shortage to go along with the “housing shortage”.  Housing doesn’t need to “crash” in nominal terms for it to be a lousy investments in a high interest rate environment. Show me deals where you have 7-8 percent interest rates and are not losing money each month. Please, I’d love to see it especially in the dfw market where your insurance and taxes are at comical levels. 
My last three deals in the last 6 months in the DFW area (Arlington and ft worth) are positive cash flow. And two were found off the MLS. It’s not easy to find good deals, but they’re still out there. Market rent is going way up due to low inventory and owner expenses. Lots of tired landlords cashing out and selling with this hot market. And not many buy n hold investors jumping in anymore since it’s hard to cash flow with these high interest rates. I’ll keep slowly picking up deals if the numbers work. I just don’t see demand for housing falling in this area. Or any area with a net population growth. 
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Replied Jun 10 2023, 22:03
Quote from @James Hamling:
Quote from @John Morgan:

@Carlos Ptriawan

If we weren’t 4-5 million homes short nationwide it would be a different story. Low supply will cause high demand. And I don’t see builders catching up in the next couple decades, so expect 3-5% or more annual appreciation indefinitely. And if rates come down, expect 5-10% appreciation rates like last year.

And all the housing “expert” market crash predictors who have had their cash locked and loaded since 2020 will remain on the sidelines while the rest of us continue to dollar cost average with buying more and more RE in good times and bad. lol


While I 100% agree with, and "get", what your meaning here, I just want to point out the exact wording of it is a bit wonky and expect some to focus on that vs your intentions and meanings. 

Low supply does not CREATE high demand. It's does accentuate an existing demand, ad's a FOMO aspect, a "call-2-action" quotient, but lack of supply itself does not create demand. 

Again, I agree with where your coming from, just describing things a bit wonky. 

As for builders, they’re throttling production, and it's 

 A low supply creates a high demand for what’s available. We’re still having bidding wars with multiple offers over asking price for the few homes for sale under the median price. It’s all about supply and demand even with higher interest rates. 

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Replied Jun 14 2023, 11:21

@Carlos Ptriawan  @James Hamling

Thoughts on FED forecasting 2 more rate hikes.  There are only 4 more meetings rest of the year, will they hike the next two and start cutting? Why hasn't the market believed the FED for the past year? For all the bashing we all do on Jerome, he is pulling off a Houdini act by raising rates, getting markets to not believe them while they do it to bring down inflation with no impact other than mid sized banks which nobody cares about. 

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Replied Jun 14 2023, 11:52
Quote from @John Carbone:

@Carlos Ptriawan  @James Hamling

Thoughts on FED forecasting 2 more rate hikes, and how do we get back to ZIRP by 2024? There are only 4 more meetings rest of the year, will they hike the next two and start cutting? Why hasn't the market believed the FED for the past year? For all the bashing we all do on Jerome, he is pulling off a houdini act by raising rates, getting markets to not believe them while they do it to bring down inflation with no impact other than mid sized banks which nobody cares about. 


In a word: Neo-Stagflation

For the 98.5% of "normal" people who have 0-clue what that means;     Know how in a "normal" setting, driving a car, it's instructed to ONLY use 1 foot for the petals. That your either on the brakes, or on the gas, one or the other, and to some varying degree of each. Let's call that a "normal" economic setting. 

Neo-Stagflation is like how it is to drive a race car. In driving race car (Pro-Stock) you use BOTH feet, simultaneously, one on break, one on gas, both at same time. And as you go through the track, it varies how your working each, in connection to the other. 

What are in this weird place of flirting with stalling things out, but keeping gas going to prevent stall, but breaking enough to slow acceleration, but keeping RPMS going, but slowing, but fueling, but decreasing, a bit up, but slow, but keep going, but slow down, but but but but..... 

It's a clog dance on a razors edge. 

They have to "telegraph" both directions, and all this as the track leads straight into a brick wall. 

Credit to how there "driving the car" but that changes nothing of the landscape of the race track. There is a giant cliff/brick wall on the track we are racing towards and there is no choice but to address that in coming months. That is commercial finance expirations. 

Now how that's addressed, who knows. All as is, rates HAVE to decline to prevent the implosion. BUT, introduce unforeseen and the math changes right? A "TARP 2.0" that provides "special" liquidity into banking to provide a solution of some kind unto commercial finance markets, that's possible. A "bridge" to the hit for current rates. 

Fact remains, rates at this level are unsustainable in a long term enduring sense. Keep in mind that's economic terms, which is measured in quarters days or weeks. 

BUT, they can't slash rates in a net shortage environment either without super-charging inflation yet again. 

I don't like speaking from feelings and opinions, but forced, my gut tells me Fed is going to "telegraph" potential future rate hikes to condition consumer habits, to keep inflation in check for pent up demand, but pause on actions as has now. With so many "anticipating" rate decreases, that's the sentiment to "destroy" to alleviate the risk of hot-inflation hitting the moment any rate alleviation happens. 

With political optics, I still say watch for a "fluff" to economic performance in time for polling. 

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Replied Jun 14 2023, 14:41

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."

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Replied Jun 14 2023, 16:00
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.

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Replied Jun 14 2023, 16:56
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? 

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Replied Jun 17 2023, 09:18
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What’s the breaking point? 
Right now, the breaking point appears to be the San Andreas Fault.  Specifically, where it meets San Francisco commercial realty.
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Replied Jun 17 2023, 09:30
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.

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Replied Jun 17 2023, 09:31
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?