Prices.... Going Up!!!

[Mystic]

Prices Going Up & Prices Going Down: American Real Estate (June 2022)

The average cost of a property mortgage in America increased yesterday.

As of Monday 13 June 2022, the average 30-year fixed mortgage rate is 6.18%, up from 5.85% on Friday 10 June 2022.

Putting aside the sheer magnitude of the increase, this is also the highest mortgage rate since collection of the daily data began in April 2009.

US NATIONAL AVERAGE 30-YR FIXED MORTGAGE RATE a/o 13 JUNE 2022 (2017-2022)
View attachment 2592390
Source: Mortgage News Daily

Many of us, of course, recall times @ which mortgage rates were much higher. For example, I had a rate of 8.25% -- for which I paid points to achieve -- wAy back in 1988. So to us, even 6.18% seems low...

US NATIONAL AVERAGE 30-YR FIXED MORTGAGE RATES (1971-2022)
View attachment 2592391
Source: Freddie Mac

... but then back in 1988 my wages were strong and stayed well ahead of inflation. That is NOT the scenario in which potential mortage buyers find themselves in June 2022.

HOUSING: PRICES ALREADY DECLINING

As the mortgage rate increases, there will be downward pressure exerted on the purchase cost of dwelling units of all types, @ least where a mortgage is a factor. Historically, each increase in the mortgage rate, regardless of magnitude, is accompanied by the exit of a (new) layer of potential buyers from the market. Concomitantly, transaction volume sags, and available residential units become stagnant, sitting on the market as inventory accumulates. "Experts" say this cannot happen in America. It can and in fact it was already happening in May 2022, before the recent mortgage rate increase, as evidenced by the significant increase in the number of units in inventory per active listing statistics:

PERCENT CHANGE - MONTH-OVER-MONTH - ACTIVE LISTINGS (AUGUST 2017-MAY 2022)
View attachment 2592395
Source: Realtor.Com

Active listings increased for two reasons:

1. Falling Sales
2. Increase in New Listings

Consequence is an UPSURGE IN PRICE REDUCTIONS -- again indication of price of housing going down.

PERCENT CHANGE - YEAR-OVER-YEAR - PRICE REDUCTIONS (MAY 2017-MAY 2022)
View attachment 2592396
Source: Realtor.Com

This is how it is AND this is how it will continue to go for the next several fiscal quarters:

Asking prices will be reduced to that point where the next buyer(s) can afford to purchase a mortgage at the going rate.

Some of y'all took issue with the post above I'd planted @ this thread back in June 2022, that housing prices weren't really declining, etc.

Now, seven (7) months later, let's take a new look at ... THE STATE OF THE HOUSING MARKET IN THE SAN FRANCISCO BAY AREA.

Between MARCH 2022 and JANUARY 2023, the MEDIAN PRICE of a SINGLE-FAMILY HOUSE in SAN FRANCISCO BAY AREA MARKET has DECLINED 35%, and the MEDIAN VALUE as of JANUARY 2023 is approximately back to the level of November-December 2018.

SF BAY AREA / MEDIAN PRICE (USD) / SFH ... JANUARY 2015 > JANUARY 2023

Source: California Association of Realtors (2023)

NUMBER OF DAYS ON THE MARKET INCREASED

Median time on the market in the SF Bay Area increased to 32 days in January 2023 before the property sold or was pulled off the market, up from 28 days in December 2022 and from 12 days in January 2022.

 

[Mystic]

CREDIT MECHANISM BALANCES REFLECT RISING COSTS OF GOODS AND SERVICES (USA)

U.S. households are holding rising levels of debt.

1. Credit card balances

Credit card balances outstanding in Q4 grew by $56 billion from Q3, bringing total credit card balances outstanding to an all-time high of $986 billion as of Q4/2022.

2. Other consumer loans (personal, payday, buy-now-pay-later)

Other consumer loans rose by $17 billion, to $507 billion in Q4, and have now surpassed the all-time high reached 20 years ago, in Q3/2003.

The data presented in the following charts represent aggregate dollars, not adjusted for 20 years of inflation, population growth, and income growth.

CREDIT CARD BALANCES vs. OTHER CONSUMER LOAN BALANCES (Q4/2002 > Q4/2022)

Source: New York Federal Reserve Bank (February 2023)

Younger credit card borrowers transitioning to debt delinquency.

According to a report posted by the New York Federal Reserve on its "Liberty Street Economics" blog, more credit card borrowers transitioned to 90-day or more delinquencies in Q4/2022 than prior to G1/2020, i.e., before the pandemic, adding that the transition is being driven by younger borrowers.

LINK: https://libertystreeteconomics.newy...ling-with-credit-card-and-auto-loan-payments/

SHARE OF CREDIT CARD BORROWERS TRANSITIONING TO 90-DAY + DELINQUENCIES BY AGE GROUP (Q4/2003 > Q4/2022)

Source: New York Federal Reserve Bank (February 2023)

 

[SoCal Sam]

Some of y'all took issue with the post above I'd planted @ this thread back in June 2022, that housing prices weren't really declining, etc.

Now, seven (7) months later, let's take a new look at ... THE STATE OF THE HOUSING MARKET IN THE SAN FRANCISCO BAY AREA.

Between MARCH 2022 and JANUARY 2023, the MEDIAN PRICE of a SINGLE-FAMILY HOUSE in SAN FRANCISCO BAY AREA MARKET has DECLINED 35%, and the MEDIAN VALUE as of JANUARY 2023 is approximately back to the level of November-December 2018.

SF BAY AREA / MEDIAN PRICE (USD) / SFH ... JANUARY 2015 > JANUARY 2023
View attachment 2801870
Source: California Association of Realtors (2023)

NUMBER OF DAYS ON THE MARKET INCREASED

Median time on the market in the SF Bay Area increased to 32 days in January 2023 before the property sold or was pulled off the market, up from 28 days in December 2022 and from 12 days in January 2022.

Dots are very easy to connect in SF.

 

[Mystic]

Where prices are not going up...

S&P 500: 15 Biggest Losers re: Share Values Down as of 10:00am Eastern on 13 March 2023

ALL fifteen are either financial services institutions or services that serve financial services institutions.

Keep your eyes on CitiGroup, JPMorganChase, and Wells Fargo in coming days.

PS: If enough of these crash, maybe Elon Musk can buy up all of 'em and start a new financial services concern, say something like....

BANK X

?

nb: New World Order? Forget it: how about NEW WORLD BANK!

 

[OBMG74]

 

[Mystic]

Polar opposite of Big Finance's day (and year).

 

[rickb119]

Where prices are not going up...

S&P 500: 15 Biggest Losers re: Share Values Down as of 10:00am Eastern on 13 March 2023
View attachment 2825829
ALL fifteen are either financial services institutions or services that serve financial services institutions.

Keep your eyes on CitiGroup, JPMorganChase, and Wells Fargo in coming days.

PS: If enough of these crash, maybe Elon Musk can buy up all of 'em and start a new financial services concern, say something like....

BANK X

?

And so it begins (and won't end well).

 

[Mystic]

And so it begins (and won't end well).

Right on, and the institutions in the chart I posted are only those listed @ S&P 500. There are -- literally -- a few dozen other large financial services institutions in USA that have lost double digits today ... and counting.

 

[GChief]

Right on, and the institutions in the chart I posted are only those listed @ S&P 500. There are -- literally -- a few dozen other large financial services institutions in USA that have lost double digits today ... and counting.

Due to the SBV failure. I am curious to see what happens the next few days.

 

[Mystic]

A place where price is rising... and a sign that someone(s) be enjoying the financial services sector 'crisis' du moment...

 

[Mystic]

Due to the SBV failure. I am curious to see what happens the next few days.

Um, Chief, we're already seeing it.... and it's red.

 

[GChief]

Um, Chief, we're already seeing it.... and it's red.

I'm going with knee-jerk, since my glass is always half full.

 

[Mystic]

Due to the SBV failure. I am curious to see what happens the next few days.

More financial services sector fallout, maybe some overlap w/ the institutions included on the Today's Big Losers @ the S&P 500 that I posted a few posts earlier...

 

[Mystic]

I'm going with knee-jerk, since my glass is always have full.

Well, @ least you'll be going with some kinda flow. ... yo.... maybe the only liquidity @ the end of this month. Who knows?

 

[Jeffery]

These banks had trading halted/paused today to keep them from getting wiped out.

• Western Alliance Bancorporation Common Stock
• PacWest Bancorp
• First Republic Bank Common Stock
• Zions Bancorporation N.A.
• OceanFirst Fnl Dp Sh Pfd A
• Customers Bancorp, Inc - Common Stock
• East West Bancorp, Inc.
• Metropolitan Bank Holding Corp. Common Stock
• First Horizon Corporation Common Stock
• Regions Financial Corporation Common Stock
• Comerica Incorporated Common Stock
• Bank of Hawaii Corporation Common Stock
• KeyCorp Common Stock
• Customers Bancorp, Inc 5.375% Subordinated Notes Due 2034
• Macatawa Bank Corporation
• Texas Capital Bnc
• United Community Bk Dep
• The Charles Schwab Corporation - Common Stock
• Coastal Financial Corp Cm St
• Huntington Banc Dep Shs J
• Magyar Bancorp Inc
• Macatawa Bank Corporation

 

[spicer]

Where prices are not going up...

S&P 500: 15 Biggest Losers re: Share Values Down as of 10:00am Eastern on 13 March 2023
View attachment 2825829
ALL fifteen are either financial services institutions or services that serve financial services institutions.

Keep your eyes on CitiGroup, JPMorganChase, and Wells Fargo in coming days.

PS: If enough of these crash, maybe Elon Musk can buy up all of 'em and start a new financial services concern, say something like....

BANK X

?

nb: New World Order? Forget it: how about NEW WORLD BANK!

Old world bank reestablishing the old world order.

 

[spicer]

How about big Pharma. Is there a similar graph for big Pharma?

 

[Jeffery]

How about big Pharma. Is there a similar graph for big Pharma?

We're gonna need a bigger chart.

Pfizer alone went from revenue of $38.6B in 2020 to $100.3B in 2022

https://www.macrotrends.net/stocks/...ue for the twelve,a 95.16% increase from 2020.

 

[rickb119]

We're gonna need a bigger chart.

Pfizer alone went from revenue of $38.6B in 2020 to $100.3B in 2022

https://www.macrotrends.net/stocks/charts/PFE/pfizer/revenue#:~:text=Pfizer revenue for the twelve,a 95.16% increase from 2020.

Back in the late 80's-mid 90's I worked for a division of Pfizer. Annual 3-4 day sales/service meetings (parties) were held at such places as the Laguna Beach Ritz Carlton, Camelback Marriott and other fancy spots.

Should have held onto the stock options I received at the time.

 

[usedto]

How about big Pharma. Is there a similar graph for big Pharma?

I googled "graph on how irritating graphs are" and couldn't find one.