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If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

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Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#101

Post by kbelder »

Izkata wrote: post #78
lame-robot-hoax wrote: post #9

Earlier quoted context omitted.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

We're only officially in a recession when NBER declares it. And they only do so by looking backwards, months after the fact at least. The "two quarters of negative growth" was only ever a rule of thumb that mostly fit, never the official definition.

NBER has declared that the definition of a recession is when NBER has declared a recession. NBER has declared that disagreements with that definition are clearly invalid, since NBER is the source of the official NBER definition of recession.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#102

Post by PH95VuimJjqBqy »

mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

move.

I live in "flyover country" and we don't have those problems here.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#103

Post by PH95VuimJjqBqy »

xphos wrote: post #63
zelon88 wrote: post #41

Earlier quoted context omitted.

This is because the American home buyer isn't competing with other American home buyers anymore. They're competing with VCs trying to build developments and companies trying to turn a profit. Gone are the days of the "Fixer Upper" that Tim Taylor would buy, drop a reasonable amount in repairs, preform the repairs themselves, and then turn a modest profit. Everyone who buys a house today wants the value to go up. Nobo…

I think this is flipped. VC's wouldn't compete here if the the supply was much bigger because than the price globally would dip they wouldn't have a leverage advantage. If there was no shortfall in constructions for multiple decades that VC see houses as an opportunity. I think if we allowed house densities to increase and changed zoning laws to allow houses to be built. The cost of housing would fall significantly e…

If they're using it to "house cash" then the only thing they need is continued inflation of housing costs. Even if it were lower than today, the inflation is the only thing needed for them to continue investing in it as its then considered to be a protection against inflation if nothing else.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#104

Post by userinanother »

DrReachAround wrote: post #89
zeroCalories wrote: post #68

Earlier quoted context omitted.

Rentals make up a small percentage of single family homes. Around 5% depending on where you are. Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash. We know flooding supply works because we've seen it play out. Tokyo is the biggest metro area in the world, with a growing population, and reasonable rents because the…

The average home size in Tokyo is 60 square meters, that's 645 square feet. That's called a one room studio apartment in the US. I don't personally know anyone that wants to live in a box like that, except maybe single people just out of college with little income.

Yeah but you get so many local amenities and conveniences in that 600sf place in Tokyo. In the USA you get none of that

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#105

Post by userinanother »

PH95VuimJjqBqy wrote: post #103
xphos wrote: post #63

Earlier quoted context omitted.

I think this is flipped. VC's wouldn't compete here if the the supply was much bigger because than the price globally would dip they wouldn't have a leverage advantage. If there was no shortfall in constructions for multiple decades that VC see houses as an opportunity. I think if we allowed house densities to increase and changed zoning laws to allow houses to be built. The cost of housing would fall significantly e…

If they're using it to "house cash" then the only thing they need is continued inflation of housing costs. Even if it were lower than today, the inflation is the only thing needed for them to continue investing in it as its then considered to be a protection against inflation if nothing else.

They will get burned on interest rates and transaction fees

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#106

Post by userinanother »

DrReachAround wrote: post #88
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

This is absolutely false. Since 1968, 77 million housing units have been been built in the US. Assuming 2.5 people per household, today's average, that's enough for 190 million people. US population has increase 133 million since 1968. We have plenty of housing. It may just not be where you want to live and the type of housing want at the price you want. But no one is guaranteed any of those and shouldn't be. https:/…

But where were they built. Often there is a mismatch between where you need housing and where you get it

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#107

Post by userinanother »

Loughla wrote: post #52
KittenInABox wrote: post #29

Earlier quoted context omitted.

The US contains also huge mcmansion-style houses that are actually only classified to hold a single family. I think if you speculated more for the average person, housing is less and less available to them all the time... Although the above poster attributes it to a lack of housing, the actual cause of housing shortage is likely far more complicated. The crash in real estate in 2008 froze construction for over a deca…

The section about housing being an investment in your comment can't be stressed enough. We were turned down for a mortgage at the first bank we tried because we refused to finance enough to improve the landscaping. The bank wanted to see what the ROI on the home was. We were buying a forever home. Increase in value is someone else's problem after I'm dead. It was. Well. Fascinating.

That’s wacky, I’ve never heard of that in the USA. You mortgage is a commodity that is packaged and sold off within a month or 2. It just need to meet the checklist of requirements and it gets sold off as a CDO or some other financial instrument. The mortgage writer just needs to make sure you meet the checklist and don’t default while they do the transfer.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#108

Post by PawgerZ »

DrReachAround wrote: post #90
pauldenton wrote: post #17

Earlier quoted context omitted.

https://ourworldindata.org/grapher/population The massive growth of the global population is hard for people to grasp, but is a big part of the cost of housing. Even if we've built billions of new homes in the last century that isn't enough to compensate the bigger still population increase.

Since 1968, 77 million housing units have been completed in the US. At 2.5 people per household, that's enough for 190 million people. The US population has increased 133 million over that time. We have plenty of housing.

Just looking at new housing units is only half of the story. I can't and won't speculate on how many homes were torn down during the time it took to build 77 million housing units, but it had to be a significant number.

If two single-family houses were torn down to make room for one new-build, single-family house, then it is a loss of housing. Not to mention natural disasters, condemned housing, rural housing being torn down for farmland, urban housing being torn down for new highways. I do wonder how many houses were destroyed in that same timeframe.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#109

Post by PH95VuimJjqBqy »

userinanother wrote: post #105
PH95VuimJjqBqy wrote: post #103

Earlier quoted context omitted.

If they're using it to "house cash" then the only thing they need is continued inflation of housing costs. Even if it were lower than today, the inflation is the only thing needed for them to continue investing in it as its then considered to be a protection against inflation if nothing else.

They will get burned on interest rates and transaction fees

that's not true, these things exist today and they don't stop anyone from investing.

What you're trying to say is that it would be less profitable and that may be true but as long as it tracks with inflation it would be worth it as an investment tool.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#110

Post by userinanother »

PH95VuimJjqBqy wrote: post #109
userinanother wrote: post #105

Earlier quoted context omitted.

They will get burned on interest rates and transaction fees

that's not true, these things exist today and they don't stop anyone from investing. What you're trying to say is that it would be less profitable and that may be true but as long as it tracks with inflation it would be worth it as an investment tool.

That’s a big caveat. Inflation is 4-5% officially, bonds are 7-8 ish maybe more for real estate investment. But real estate prices are falling or flat. If you suddenly need to earn even 6% off a house you need to rent it for quite a bit. It might make sense still at the low end (under 250k) but a 500k property needs to rent out for 2500a month to break even. And that’s not including taxes, maintenance, vacancy, admin, and transaction costs at sale. House prices need to come down for this to be a profitable venture again. The bet is that real estate prices will rise to new highs faster than inflation or at least comparable assets. If that doesn’t happen then you lose money
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