Earlier quoted context omitted.
I spent 1.1M on a house with my wife of course and am very happy with my purchase. Lots of land and nobody around to tell me what to do.
> with my wife > nobody around to tell me what to do
LOL
Lumber crash leads to 'blowout' sales as prices crater
341–350 of 553 posts
Re: Lumber crash leads to 'blowout' sales as prices crater
#342Earlier quoted context omitted.
I don't get it either, and I'm a hedge fund manager. To my mind nothing seems like it's a sensible price in any of the cities I look at. I mean I get that there's a fair few people making good money who can buy a £2M home, but it doesn't make any sense that there are entire swathes of London where every home is like that. A quick google suggests that a £100K income is in the top 3% in this country, and top 1% is abou…
Being valued at £2M doesn't mean you could sell all of them for that price or that the people living in them paid £2M for them. The sort of person who could afford a nice house 3+ decades ago and spent the intervening years living in London isn't likely to move to somewhere more rural just because they can realise an investment.
> Being valued at £2M doesn't mean you could sell all of them for that price or that the people living in them paid £2M for them
But in London these houses do sell, normally very quickly (and bullshit apartments in shiny new blocks that are in same price bracket I guess same, generally they do seem to sell, but I assume that's just parking money for tax purposes so not quite same thing).
Re: Lumber crash leads to 'blowout' sales as prices crater
#343Earlier quoted context omitted.
I like the chart, but it's exactly what the article indicated, no? Article indicated It went up to 3 times the price and is now down to pre rocket prices. Charts seem to agree?
I wouldn't define "returning to historic norms" as "cratering". Would you define a plane landing smoothly on a runway, even after a steep dive, as "cratering" the runway?
I guess it depends but to me cratering is more about slope of the curve than its final destination. So I can see a plane barreling or diving or catering down, before pulling up on the runway...
Re: Lumber crash leads to 'blowout' sales as prices crater
#344Earlier quoted context omitted.
Maybe prices will go negative like oil!
We will have to pay the trees to stop growing!
You joke, but the timber market is so oversaturated and the price so low that getting paid not to cut trees for lumber is a real outcome.
Rather than clear timber and plant new trees, you can get paid for the carbon they sequester: https://www.wsj.com/articles/new-carbon-market-pays-southern...
Re: Lumber crash leads to 'blowout' sales as prices crater
#345So will any of the inflation doomsayers notice? Econimists were specific: inflation halted in 2020 but will have a small jump in 2021, but most of the extreme price shocks are supply chain issues and not inflation. That has born out with lumber.
Re: Lumber crash leads to 'blowout' sales as prices crater
#346"If high prices held you back from building, you are in luck, as the tables have now turned" Except... many builders will find some other reason/excuse where prices are high to keep prices high. We were looking at building a house - talked to builder last November and... looking at $470-$480k range (ballpark estimate). Lumber was going higher, but we'd reduced the house plan size. Lumber kept going up... and up... Th…
I would wait. I'm an licensed inactive General Contractor. If 14 months ago, they were building them for $450,000, I'd wait. I'd shop around for another contractor too. A young guy starting out, might save you a lot. (There's no way to verify he knows what he's doing though.) If you are some what handy, it's not that difficult to owner build your own house. That is if you get the blueprints past the town's council. G…
> If you are some what handy, it's not that difficult to owner build your own house.
I'm not sure what you have in mind here, but my brother did an "owner build" in the true sense of the word and sunk every nail into every piece of wood, every pipe, every wire, every window, floor, staircase, insulation, lighting, built all the cabinets, everything. That was 8 years of his life. Two of those years he literally quit his job and worked on it full time.
Caution, it is easy to seriously underestimate how much work it is to build a house. It could stretch on for years. Not to mention the pain in the ass that is bad weather, the logistics of sourcing and moving all the materials, plans, permits, etc.
Re: Lumber crash leads to 'blowout' sales as prices crater
#347"If high prices held you back from building, you are in luck, as the tables have now turned" Except... many builders will find some other reason/excuse where prices are high to keep prices high. We were looking at building a house - talked to builder last November and... looking at $470-$480k range (ballpark estimate). Lumber was going higher, but we'd reduced the house plan size. Lumber kept going up... and up... Th…
who has all this money to spend? everywhere everything is so expensive. i make a ton, and this doesn't add up. nothing about home prices seems to add up.
they don't have it. they're borrowing it
Re: Lumber crash leads to 'blowout' sales as prices crater
#348Earlier quoted context omitted.
Why would they US government not be able to print its way out? I assume the US will be able to as long as it has the preeminent military and a stable society and court system, with relatively high levels of trust compared to other countries. If another similar size country becomes a more stable option, then I would be worried.
Recesssions and depressions cant happen because the US can print money? Tell that to the history books. While you are there take a look at what causes an economic turndown, it tends to come on the back of massive spending, printing money, juiced growth and wars.
Politically, I do not think the US will let a deflationary spiral happen as long as it can print money. Sufficient portions of the population are fully invested in the equities market, and I expect the US to pull out all the stops to prop up their prices. They might take a hit for a couple years (although I bet even that seems politically unacceptable), but on a timeframe of more than a few years, I expect the US government to keep inflating, assuming they are able to per the conditions in my previous comment.
Re: Lumber crash leads to 'blowout' sales as prices crater
#349Earlier quoted context omitted.
who has all this money to spend? everywhere everything is so expensive. i make a ton, and this doesn't add up. nothing about home prices seems to add up.
I don't get it either, and I'm a hedge fund manager. To my mind nothing seems like it's a sensible price in any of the cities I look at. I mean I get that there's a fair few people making good money who can buy a £2M home, but it doesn't make any sense that there are entire swathes of London where every home is like that. A quick google suggests that a £100K income is in the top 3% in this country, and top 1% is abou…
>I get the feeling it will end badly.
Agreed.
As to the question of who has that kind of money: you're talking about income from employment, not assets. Maybe there are a lot of people with assets that put them in reach of £2-3M homes. And of course there are foreigners who don't work in the U.K., like Saudis, Russians, and Chinese.
Re: Lumber crash leads to 'blowout' sales as prices crater
#350Earlier quoted context omitted.
Wait, people were saying/thought that this was runaway inflation and not a result of supply chain issues because of COVID and tons of people suddenly having to spend way more time in their house because of COVID? Maybe I'm ignorant of the inflation argument more than anything else but it doesn't even pass the sniff test in my opinion.
There seems to be a group of people who predict hyperinflation at the drop of a hat. I’m not sure if it’s paranoia or motivated reasoning though. Maybe a mix of both?
I think people predicted hyperinflation since QE has been introduced. What people don't get is that QE increases base money. When banks run out of reserves the central bank gives them more. The reverse relationship doesn't have to hold. Giving banks more reserves does not force them to lend the money out. The relationship between bank lending and base money has been fully decoupled. Whenever QE increases the supply of bank reserves it introduces more noise into the statistics.
Just because QE doesn't create inflation doesn't mean it is a free lunch though. QE purchases treasury bonds and effectively takes them out of the market. The government is paying interest to itself. There are institutions that need those treasury bonds which results in a collateral shortage. These institutions will continue buying treasury bonds driving interest rates slightly negative leading to a "technical" form of deflation however it is quite insignificant.