The Market Thread

  • You are viewing Orangepower as a Guest. To start new threads, reply to posts, or participate in polls or contests - you must register. Registration is free and easy. Click Here to register.
Nov 6, 2010
2,634
932
1,743
We're boned already - we'll find out how boned at the next meeting.
Not sure what you mean by that, I hope they raise ASAP. The stuff I'm seeing in the supply chain is super inflationary. Whatever a raise does to the market will be short term pain IMO. This raise is obvious and I'm hoping it's priced in.
 
Sep 6, 2012
2,498
1,002
743
Edmond
Not sure what you mean by that, I hope they raise ASAP. The stuff I'm seeing in the supply chain is super inflationary. Whatever a raise does to the market will be short term pain IMO. This raise is obvious and I'm hoping it's priced in.
meaning - we have way overspent and inflation will be addressed during the next fed meeting. The market will most likely have a decent drop and interest rates will be increased. The rise in rates will slow the economy.
 

jobob85

Drunkle
A/V Subscriber
Mar 11, 2009
24,025
27,675
1,743
I would be surprised if rates change. A supply side problem won't be solved by raising rates and slowing the supply even more. A little inflation at this point is probably a good thing, and will dampen demand which is what is needed right now.
 
Nov 6, 2010
2,634
932
1,743
I would be surprised if rates change. A supply side problem won't be solved by raising rates and slowing the supply even more. A little inflation at this point is probably a good thing, and will dampen demand which is what is needed right now.
Interesting take..
 
Oct 30, 2007
4,975
4,016
1,743
So when is the FED going to raise rates, and by how much?? There is no way they can deny inflation credibly at this point.
The Fed has taken the stance that they believe the inflation we're seeing will be transitory. They're going to try to ignore it until we reach full employment. So I wouldn't expect rates to change any time soon.

The Fed is playing with fire. I hope that they're right about the inflation being transitory. If they let things run too far, they could push us into another recession whenever they have to reign things in.
 
Sep 6, 2012
2,498
1,002
743
Edmond
The Fed has taken the stance that they believe the inflation we're seeing will be transitory. They're going to try to ignore it until we reach full employment. So I wouldn't expect rates to change any time soon.

The Fed is playing with fire. I hope that they're right about the inflation being transitory. If they let things run too far, they could push us into another recession whenever they have to reign things in.
I feel there will be an adjustment , because of a couple of things.

The housing market is nuts. For example - I live in Edmond, and I live in a nice middle class neighborhood. I paid 265k for a 300k house. My house is one of the larger homes in the neighborhood. There are 2k - 2.5k sqft house for sale and on the market for hours to days for 400k. My zestimate is almost 500k, is it worth it. Heck no, the prices of items are way over inflated. My colorado home has almost doubled in value in a year. Not sustainable.

Interest rates are too low , they almost have to raise it to recoup money for the free money they are giving away. Do I think we will see the day where 7 percent is a great rate. I hope not.
 
Nov 6, 2010
2,634
932
1,743
I feel there will be an adjustment , because of a couple of things.

The housing market is nuts. For example - I live in Edmond, and I live in a nice middle class neighborhood. I paid 265k for a 300k house. My house is one of the larger homes in the neighborhood. There are 2k - 2.5k sqft house for sale and on the market for hours to days for 400k. My zestimate is almost 500k, is it worth it. Heck no, the prices of items are way over inflated. My colorado home has almost doubled in value in a year. Not sustainable.

Interest rates are too low , they almost have to raise it to recoup money for the free money they are giving away. Do I think we will see the day where 7 percent is a great rate. I hope not.
Yea, feels like the housing bubble all over again. It will pop way before we get to 7%.
 

Boomer.....

Territorial Marshal
Feb 15, 2007
7,557
6,260
1,743
OKC
Yea, feels like the housing bubble all over again. It will pop way before we get to 7%.
Unlike during the housing bubble, banks have been strict with new loans and refis with high demand due to the low interest rates. Hopefully all new borrowers are well qualified and won't have any issues with the payments unlike in 2008.
 
Sep 6, 2012
2,498
1,002
743
Edmond
I feel there will be an adjustment , because of a couple of things.

The housing market is nuts. For example - I live in Edmond, and I live in a nice middle class neighborhood. I paid 265k for a 300k house. My house is one of the larger homes in the neighborhood. There are 2k - 2.5k sqft house for sale and on the market for hours to days for 400k. My zestimate is almost 500k, is it worth it. Heck no, the prices of items are way over inflated. My colorado home has almost doubled in value in a year. Not sustainable.

Interest rates are too low , they almost have to raise it to recoup money for the free money they are giving away. Do I think we will see the day where 7 percent is a great rate. I hope not.
I will also add, I had a conversation with a commercial real estate person earlier. Basically, a lot of companies are trying to get out of leases. Also a lot of people trying to get off of commercial real estate. Maybe they can convert the Devon tower into apartments? :)
 
Sep 6, 2012
2,498
1,002
743
Edmond
Unlike during the housing bubble, banks have been strict with new loans and refis with high demand due to the low interest rates. Hopefully all new borrowers are well qualified and won't have any issues with the payments unlike in 2008.
agreed but not much stricter

"As for SBA Microloan credit score requirements, it's possible to be approved with a credit score as low as 575 if you're otherwise a strong applicant. Most borrowers, though, will want to have a credit score of at least 640."

https://www.google.com/url?sa=t&rct...least%20640.&usg=AOvVaw3dK_WTd2y4cgOy7q6K9PSD
 
Nov 6, 2010
2,634
932
1,743
Unlike during the housing bubble, banks have been strict with new loans and refis with high demand due to the low interest rates. Hopefully all new borrowers are well qualified and won't have any issues with the payments unlike in 2008.
Yea, that will probably keep it from being as severe because a bunch of sub prime CDO's shouldn't be in play. However, qualified buyers will still walk away from mortgages if they're in a position where they have to move and they're 20% underwater.
 

cowboyinexile

Have some class
A/V Subscriber
Jun 29, 2004
19,279
11,109
1,743
41
Fairmont, MN
Yea, that will probably keep it from being as severe because a bunch of sub prime CDO's shouldn't be in play. However, qualified buyers will still walk away from mortgages if they're in a position where they have to move and they're 20% underwater.
Why would they walk away if they can afford the payments?

I bought my house in March '08. Got laid off in October '08 and spent 6 months on unemployment before I was back to work. I was $20K underwater in early '09 but I made my payments and a decade plus later it's a non issue. For most homebuyers who have the funds and credit to buy a house right now why would a short term value issue if the bubble bursts make them want to walk away?
 
Nov 6, 2010
2,634
932
1,743
Why would they walk away if they can afford the payments?

I bought my house in March '08. Got laid off in October '08 and spent 6 months on unemployment before I was back to work. I was $20K underwater in early '09 but I made my payments and a decade plus later it's a non issue. For most homebuyers who have the funds and credit to buy a house right now why would a short term value issue if the bubble bursts make them want to walk away?
"Yea, that will probably keep it from being as severe because a bunch of sub prime CDO's shouldn't be in play. However, qualified buyers will still walk away from mortgages if they're in a position where they have to move and they're 20% underwater."

I think most people put their house on the market because they have to move to a new city, etc. If you're staying put and run into misfortune, then people are able to keep making the payments like you were, or not. In which case the end result, foreclosure, would be the same. I'd say foreclosure would be even more likely because the family that could no longer afford their payment would not have the option to sell and walk away with some cash. Those people would more likely just stay in the house as long as they were allowed before being evicted.
 
Sep 6, 2012
2,498
1,002
743
Edmond
Why would they walk away if they can afford the payments?

I bought my house in March '08. Got laid off in October '08 and spent 6 months on unemployment before I was back to work. I was $20K underwater in early '09 but I made my payments and a decade plus later it's a non issue. For most homebuyers who have the funds and credit to buy a house right now why would a short term value issue if the bubble bursts make them want to walk away?
I think there will be a bunch of "vacation homes" that will be lost first. Like I said the prices in the mountains and beaches are stupid high. For example , when we were buying 3 years ago. There was a house for sale , 1200 sq ft 2/1/1 . It was listed for 250k. It needed at least 100k of work. We passed . After 3 years on the market it sold for 400k with 0 improvements done. Oh and this is Salida, CO, so its not in Summit county.

not the house I referenced but equilvalent
9310 County Road 240, Salida, CO 81201 | MLS #7449083 | Zillow
 

Boomer.....

Territorial Marshal
Feb 15, 2007
7,557
6,260
1,743
OKC
Not that I'm moving, but our neighborhood is seeing comps around $215/sf where it has always been closer to the $175-200/sf range. New home construction is booming around us and these buyers are paying a premium with the extremely inflated cost of materials. I assume they're getting appraisals near cost, so I assume the entire areas comps should be permanently increased.