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predictions for 2018
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PostPosted: Fri Dec 29, 2017 12:13 pm GMT    Post subject: predictions for 2018 Reply with quote

Happy new year!

My prediction is that 2018 will be a tale of 2 markets due to the recent tax changes. Very few people will be trading up for higher property taxes and mortgage interest that they cannot deduct. As a result, there will be too little inventory on the bottom(conventional mortgages) and too much inventory on the top (jumbo mortgages). We will double digit increases in the bottom, flat in the middle and double digit declines in the top.
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PostPosted: Mon Jan 01, 2018 2:27 pm GMT    Post subject: Reply with quote

Quote:
We will double digit increases in the bottom, flat in the middle and double digit declines in the top


minimum wage in MA is at $11 now, will get to $15 in next few years. I guess that is where you will get the bottom price increases support from, in the near future. And that is the strongest support for rent increase in the next few years. as the poorest MOFO will be making between 20k to 30k a year soon.

I am still a bit confused by the property tax deduction and mortgage interest rate deduction amount with the new tax cut plan.
Is it 10,000 cap for property tax and 750,000 for mortgage interest rate?

Also the mortgage interest rate hike should be very small and very slow in 2018, I see almost no affect of the housing market on that front. I can't tell how much it would be increased, when all kind of money flooding back in to U.S. with new tax plan. I am guessing it won't get any big increase in 2018.

If all things above are lining up in 2018, shouldn't we see any property below price tag of $900k continues with price hike? The cheaper the price tag, the bigger the price increase potential.
900k minus 20% downpayment can still benefit the max of 750k mortgage deduction. And then any property above 900k will be flat, and higher the price, bigger the price dipping potential?

We already see no cheap entry level condo inventory for a few years now. As you search anything below 350k in metro boston areas now, most you can find are houses in traditional slump towns. And within boston city, most inventory exists in areas that need bullet proof windows. I am guessing 400k is new bottom price starting point, since those who building new condo are demanding way higher salary these days.

The last question for people to think about is, do we see inflow or outflow of population in metro boston area. As we can see and know there are so many new inventory of housing into the market recently, can all these be consumed by enough demand.
Anyone who could provide population inflow/outflow of recent data in different areas in Boston would be greatly appreciated. This should help predict are we into housing over supply status or not. It would be very clear where the price heading next, once we define it.
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PostPosted: Mon Jan 01, 2018 6:56 pm GMT    Post subject: Reply with quote

The real estate market will crash
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PostPosted: Mon Jan 01, 2018 10:30 pm GMT    Post subject: Reply with quote

Quote:
The real estate market will crash


By saying it will crash just like saying you will die one day. Tell us when and your supporting reasoning, or just shut up.

RE market crash usually caused by economic downturn. I don't see that happening in the coming 2 or 3 years. so 2018 is almost guarantee the RE market will upswing more.
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PostPosted: Tue Jan 02, 2018 3:11 am GMT    Post subject: Reply with quote

The market will crash this year. Interest rates will rise unexpectedly in excess of fed rate hikes due to major bond market sell off. Tax plan will hurt upper end
. Rates will hurt lower end. Demand will drop. Inventory will rise. Boston is over valued and is a bubble waiting to pop. It's popping now, and will accelerate next year and continue for years after to let air out. People who have bought in the last couple years deserve what's coming to them. Hee Hee
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PostPosted: Thu Jan 04, 2018 8:09 pm GMT    Post subject: Reply with quote

Guest wrote:
The market will crash this year. Interest rates will rise unexpectedly in excess of fed rate hikes due to major bond market sell off. Tax plan will hurt upper end. Rates will hurt lower end. Demand will drop. Inventory will rise. Boston is over valued and is a bubble waiting to pop. It's popping now, and will accelerate next year and continue for years after to let air out. People who have bought in the last couple years deserve what's coming to them. Hee Hee


I hope you are right. I fear the Fed will not raise rates and will continue to kick the can down the road, inflating the bubble even further.

The overbuilding of "luxury" apartments on seemingly every street corner and how that will play out in 2018 will be interesting....not only in Boston/greater Boston but in every major city across the country.
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PostPosted: Thu Jan 04, 2018 10:43 pm GMT    Post subject: Reply with quote

Quote:
The overbuilding of "luxury" apartments on seemingly every street corner and how that will play out in 2018 will be interesting


This will not be an issue, if inflation keep property price up. Investors will buy those apartments with loan from banks that are willing to lend. They will operate these as rental properties at a income lost, yet still feeling confident, with value gain of those properties on paper.

It is all about interest rate, which I don't think will go up that much this year. So I am not seeing any chance of housing market going down hill in 2018.


Eventually overbuilding will hurt the rental market, then if the economy ever go south for whatever reason, then we are talking about house market crashing. Until then, stagflation is what you get.
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PostPosted: Sun Jan 14, 2018 11:26 pm GMT    Post subject: Reply with quote

It looks like the crypto currency bubble will implode this year and maybe drag down the stock market into a correction. I'm not sure if it's going to be big enough to trigger a recession or cause any meaningful drop in housing prices. There are some anecdotal stories of people mortgaging their houses or using credit cards to buy crypto currencies, but I doesn't appear to be widespread yet.
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PostPosted: Fri Jan 19, 2018 1:26 am GMT    Post subject: Reply with quote

Quote:
It looks like the crypto currency bubble will implode this year and maybe drag down the stock market into a correction. I'm not sure if it's going to be big enough to trigger a recession or cause any meaningful drop in housing prices. There are some anecdotal stories of people mortgaging their houses or using credit cards to buy crypto currencies, but I doesn't appear to be widespread yet.


Recession by crash of bitcon is a wishful thinking from your end. crypto currency is not linked to any industry, if it failed, business won't shutdown. it won't make millions lose their jobs. The only thing that will trigger recession will be large interest rate hike in short period of time, lead to rapid cool down of lending industry. I see no way no how this is going to happen in the next 2 years. So what we will be seeing is stagflation getting worse, which means home price will stay un-affordable.
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PostPosted: Fri Jan 19, 2018 12:54 pm GMT    Post subject: Reply with quote

Anonymous wrote:

Recession by crash of bitcon is a wishful thinking from your end. crypto currency is not linked to any industry, if it failed, business won't shutdown. it won't make millions lose their jobs.


I thought this seemed iffy too, but I looked up the Bitcoin market cap to sanity check it, and it's currently $200B, even after the latest plunge. That's got to be enough to affect something. Who on earth is holding these things? Perhaps it could affect consumer sentiment (wealth effect) and spending (lost money). I know of people who borrowed a lot of money to buy in and are underwater now. I won't pretend to know what the end result will be, I just would write it off as inconsequential.

Quote:

The only thing that will trigger recession will be large interest rate hike in short period of time, lead to rapid cool down of lending industry. I see no way no how this is going to happen in the next 2 years. So what we will be seeing is stagflation getting worse, which means home price will stay un-affordable.


Why is it that you think only large interest rate hikes would trigger a recession? How does that square with the last recession not being caused by large hikes?

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PostPosted: Fri Jan 19, 2018 1:18 pm GMT    Post subject: Reply with quote

Oops, typo... I wouldn't write it off.

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PostPosted: Sat Jan 20, 2018 11:37 pm GMT    Post subject: Reply with quote

admin wrote:
Anonymous wrote:

Recession by crash of bitcon is a wishful thinking from your end. crypto currency is not linked to any industry, if it failed, business won't shutdown. it won't make millions lose their jobs.


I thought this seemed iffy too, but I looked up the Bitcoin market cap to sanity check it, and it's currently $200B, even after the latest plunge. That's got to be enough to affect something. Who on earth is holding these things? Perhaps it could affect consumer sentiment (wealth effect) and spending (lost money). I know of people who borrowed a lot of money to buy in and are underwater now. I won't pretend to know what the end result will be, I just would write it off as inconsequential.

Quote:

The only thing that will trigger recession will be large interest rate hike in short period of time, lead to rapid cool down of lending industry. I see no way no how this is going to happen in the next 2 years. So what we will be seeing is stagflation getting worse, which means home price will stay un-affordable.


Why is it that you think only large interest rate hikes would trigger a recession? How does that square with the last recession not being caused by large hikes?

- admin


GE lost >130B in market cap; on aggregate, oil E&P probably fared even worse a few years ago. Bitcoin is clearly a more speculative investment (i.e. folks knowingly are carrying greater risk), so I would imagine any loss would have less impact than the aforementioned. Bitcoin controlling sentiment or consumer spending seems like a stretch. If anything, bitcoin is a correlate to sentiment rather than a cause.

Anecdotally, it seems as though Bitcoin is also being bought outside of the US...
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PostPosted: Sun Jan 21, 2018 3:30 am GMT    Post subject: Reply with quote

Anonymous wrote:

GE lost >130B in market cap...


Good point, you're right. Tangentially, it's very interesting how the chart of GE's stock correlates with recessions. It seems to have preceded the Dow in the last two recessions.

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PostPosted: Sun Jan 21, 2018 1:50 pm GMT    Post subject: Reply with quote

Quote:
Why is it that you think only large interest rate hikes would trigger a recession?


Because everything we feel confident and affordable since 2012 are mostly based on low interest rate, with the rest fuel by low oil price.
Just image with current price point of following, if mortgage, car loan, student loan, or any other form in debt's rate would jump by mere 2% points, see if you would like to cut back on your own spending or not? If yes, then recession it will lead to.

Quote:
How does that square with the last recession not being caused by large hikes?

Please go refresh your memory of how Alan Greenspan tried to 'do the right thing' by raising interest rate at the end of his term, which was the beginning of the domino effect that lead to all things happened in 2008.
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PostPosted: Sun Jan 21, 2018 3:26 pm GMT    Post subject: Reply with quote

I was asking about this: "The only thing that will trigger recession will be large interest rate hike in short period of time..." You just explained how higher rates could lead to a recession, and I agree. This doesn't explain how it can be the only cause. The historical chart of Fed Funds Rates shows many recessions not preceded by a sharp increase. As for the 2008 recession specifically, I would attribute that to the sub-prime collapse, which was not caused by higher rates (mortgage rates did not spike). But even if you want to attribute that one to a fed rate spike, go back just one more recession to the dot-com bust and the mild rate increases which preceded it are on par with the rate increases which we are in the middle of right now. That is, if you want to attribute the dot-com recession to rate increases, the same magnitude of rate increases occurring in the present could trigger a recession too, contrary to your assertion that you see no way of a sharp rate hike or a recession occurring in the next two years.

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