That's a good point. The levels of student debt that kids are apparently leaving school with is one of those things that doesn't make sense on such a basic level that I have a hard time believing it's real. I've heard of Music or History majors leaving school with the same sort of debt that some MDs are leaving school with. One of those makes sense to some degree..... The other two not so much.

To be clear, I don't have a problem with studying Music, History, the arts, etc., but I think we are doing students a serious disservice by encouraging them pursue an academic path that will put them in debt for the majority of their adult lives. Further, many of those career paths are extremely difficult to find a job once they leave school.

Colleges pushing these sorts of academic paths reminds me a lot of predatory lending. "Sure, we'll loan you the money even though we know you'll never be able to make the payments." Sounds a lot like, "Sure, we'll prepare you for a career in a market that we know is saturated and never provide the income necessary to pay for that education."

So here's a good sign to watch for regarding "the future" and what happens with rising interest rates.....


Mortgage applications ----- DOWN 6.5%

Why? The reason given was "rising rates make homes less affordable". DOH!!

What happens if mortgage rates continue to rise and sales slow? You got it -- prices come down.... and??

You got it -- Builders start laying people off....

Let's hope the FED doesn't screw this up.

I'm definitely starting to see people priced out of the market here. Not severely, but for a majority of the last 7-8 years that didn't happen very often. I personally think the real estate market needs to become more neutral. This coming from a real estate agent. In nearly 18 years of wheeling and dealing in real estate, I've seen a neutral market for a very small sliver. I'm talking months as the transitions from buyer's to seller's to buyer's to seller's markets have been abrupt. I don't mind the idea of a listing sitting around for 30-90 days. I actually have a chance to sell it myself and convert some buyers into clients. I also don't have to juggle 10 offers on one listing. The amount of incoming agent calls can be pretty atrocious. It's also super competitive for our buyers. It's not uncommon for a buyer to lose out on a couple houses. I'll naturally carry more listing inventory in a neutral to buyer's market and I like that.

As with everything, you find the silver lining and make the best of the cards you're are dealt. There are always opportunities in every market if you don't put the blinders on. I just gave my real estate team a pep talk on this yesterday. ha

I bought my house 3 days after it hit the market because it was what I wanted and I had to. The houses were moving very fast in this area. I'm in one of the very few areas that's still affordable for it's location.

I'm convinced the areas around Atlanta that I was looking are too hot to sustain. I got lucky I was able to get in where I am.

Housing prices and trends in general have me concerned on many levels. Maybe it's the area I'm near and travel through, but good houses going for 500k+ only to be torn down and replaced with mansions that are squeezed onto the lot is too common for me to thing it's "normal" or sustainable. There're no starter homes or middle class homes in many of these areas. It's mansions or low end. I fear we'll end up like San Fran and other areas where housing is stupid expensive. Sure, as a home owner, I may reap the benefits of this, but the larger implications have me concerned.

I love what Warren Buffett said on CNBC this morning about selling stocks when they're down....


"If you bought your house for $20,000 and someone came along and said, I'll buy your house for $15,000..... you wouldn't sell would you".

Implying that you know/think/historically your house value is going to go UP over time.....

He's talking about being an INVESTOR for long term and investing in the value of the underlying company -- versus investing in the PRICE of the stock. Think about that..... it's a typical great Buffett / Investing philosophy.

He also called out people who try to treat the market like a casino. He's got some great advice about investing.

I'd posted about "HEADS UP!!" earlier......


Make no mistake -- Interest rates are extremely important to SALES.... Sales of ALL KINDS - not just houses -- but houses and cars lead the way.

The other night - I attended a party which was mostly all "the trades" - I was sitting with 3 excavator company owners all discussing their business (it's a very small valley where I live - they're all friends). #1 was about how busy they were last year and how busy this year seems to be starting out ---- and #2 ---- they all wanted to buy new equipment and hire more people.... PEOPLE to hire "don't exist"....and they're upset about interest rate change........ They've been buying with ZERO down and ZERO interest - and they've been finding out - those deals are going away.... Their unanimous response - they won't buy then! These machines are $80 and 100 and 250 grand!

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New home sales down 7.8% in January
22 Hours Ago | 01:40




Sales of newly built homes are falling, and the culprit is clear. Homebuyers increasingly can't afford what they want. Higher mortgage rates, combined with the loss of homeowner tax breaks in some of the nation's most expensive markets, are taking away buying power.

Sales fell in December, when the new tax law was signed, and then again in January, when mortgage rates moved higher. Sales are now at their lowest level since August of last year.

The government's measure of new home sales is based on signed contracts during the month, reflecting the people who are out shopping and signing deals with builders. It is therefore a strong read on current reactions to home affordability. Mortgage rates moved a full quarter of a percentage point higher during January, from below 4 percent to about 4.25 percent. It then took off further from there.

"It seems that the jump in mortgage rates in January had an immediate impact on contract signings," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. "You can't get more interest rate sensitive when it comes to homes and cars with the associated cost to finance."

Just because I'm bored and partly because I was lucky enough to get a good place at the right time, I check the real estate market around me once in a while. It's still ridiculous. A quarter of a percent increase in mortgage rates deters no one.

Overpriced dumps in Sacramento (CA) sell in a maximum of six days, with multiple offers on the table frequently pushing values up as much as ten percent--this is like bidding war on sub-$300k stuff. We're talking 800-1200 foot places; in areas that didn't used to be so great, but are considered swell and quaint now, $500k will get you an old piece of junk (new paint + carpet with 50 year old windows no better than cellophane) with maybe 1500 feet of "living" space. The (local) job market (pay) does not remotely coordinate with what this stuff costs.

New places ("single family homes") starting at $500-600k down the street from me have been selling with literally no inventory, i.e., faster than they can be built (in December!). There is a waiting list for stuff that does not exist on the tiniest of lots. This looks just like 12 years ago, but some of the prices will undoubtedly hold better than others. Some will not . . .

Let's not even talk about the Bay Area (San Mateo?), where a small, yet newish 2-bedroom condo will ask at 900k, or you can pay $3000.00/mo for a crappy 2-bedroom apartment (Mountain View?). Someone mentioned San Francisco, which really isn't even mentionable anymore, since it was determined that you need to make at least two million a year to buy anything fixed on dirt in the city/county.

It's tough all over, but some have had good timing. For some places, though, it's like waiting until Beverly Hills becomes affordable. Just head east, really, really far.:welcome3:

I got a good laugh from an article this morning --- the point was -- "the next time someone tries to scare you with their prediction.... look at this chart".

This is so true it's hysterical.... the "sky is falling" - "the world is flat"....




https://lateral-g.net/forums/attachme...1&d=1519826414

I've followed monthly stats for over a decade here in the Las Vegas valley and sales always lag in December and January. There really is a seasonal adjustment. Even worse in markets with bad weather. They should be comparing numbers to other years in the same months. I'm not discounting that the market is changing, but as we all know, it depends on how the data is used.