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predictions for 2018
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PostPosted: Sun Jan 21, 2018 6:09 pm GMT    Post subject: Reply with quote

admin wrote:
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.

- admin


Yeah, it seems to me that given the global synchronous growth story, the most likely trigger for a recession in the near term has to be something beyond interest-rate hikes (which largely are anticipated). Feels like it has to be something geopolitical. Also, it seems as though the tax-bill stimulus (and any infrastructure spend...) will help offset tightening monetary policy domestically.

I do think rates might impact equity valuations, though. The yield on equities is roughly earnings/price >3% at the current elevated P/E, which still beats short-term treasuries handily. The difference is contracting as rates and equity prices rise, however. I could imagine a 2011 scenario- pretty much a bear market at a 19% decline but without any recession.

The previous poster hinted at stagflation, but we haven't seen much evidence of that. Wage growth is accelerating albeit very modestly, just seems to be a flatter Phillips curve. Real wages have not declined. We'll see I guess.

For our local market, I think a shock could possibly come in the form of dramatic political changes to healthcare that would impact biotech/pharma/hospitals/etc. I think the probability of such changes are low. The tax bill kept the R&D tax credit, for instance. Pressure on the industry could serve as a bit of a headwind over time, though.
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Guest






PostPosted: Wed Jan 24, 2018 3:54 pm GMT    Post subject: Reply with quote

Hypothetical question
If mayor Menino were still alive and in office, do you think Boston would be in this building boom?
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Guest






PostPosted: Mon Jan 29, 2018 7:08 pm GMT    Post subject: Reply with quote

https://www.cnbc.com/2018/01/29/mortgage-rates-highest-in-4-years-ominous-sign-for-spring-housing.html

Let's hope for lower prices this year.
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PostPosted: Mon Jan 29, 2018 8:25 pm GMT    Post subject: Reply with quote

I hope every single buyer that has purchased real estate in the last two years of this bubble goes broke as it corrects. All of the STUPID buyers and overwhelming foreigners that have saturated this area with filth. Maybe soon I can buy their homes 30% off and they can go back to China, Russia and whatever other rocks they climbed out from
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Guest





PostPosted: Tue Jan 30, 2018 3:34 am GMT    Post subject: Reply with quote

Do you really think house prices will drop 30% in desireable towns? People were hoping for a major correction after the great recession (about 7 or 8 years ago), and it didn't happen that way. Prices in the upper middle class towns may have flattened or softened at best. But that big correction you're hoping for I don't believe will happen.
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PostPosted: Tue Jan 30, 2018 1:32 pm GMT    Post subject: Reply with quote

Last time in 2008 interest rates were dropped too low for way too long and money was printed. This reinflated the bubble(or flattened it as you mentioned in our area). Inflation is starting now as the money is unwound and rates rising. This time the crash will happen no matter what. Either the Fed let's the asset bubbles correct or they again over do it by dropping rates and buying more bonds. This policy has already weakened the dollar. If they do it again the dollar with plummet as the world has had enough of us playing games with the Reserve currency. If they do it again, prices won't fall-you're right. However it will take twice as many dollars to buy that real estate. Same thing as a correction but worse
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PostPosted: Tue Jan 30, 2018 6:25 pm GMT    Post subject: Reply with quote

Anonymous wrote:
However it will take twice as many dollars to buy that real estate. Same thing as a correction but worse


You hit the nail on the head, but it's not just real estate. It takes twice as much money to buy anything or to rent anywhere.
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Elrond



Joined: 27 Feb 2013
Posts: 48
Location: Boston, MA

PostPosted: Tue Jan 30, 2018 6:50 pm GMT    Post subject: Reply with quote

Anonymous wrote:
I hope every single buyer that has purchased real estate in the last two years of this bubble goes broke as it corrects. All of the STUPID buyers and overwhelming foreigners that have saturated this area with filth. Maybe soon I can buy their homes 30% off and they can go back to China, Russia and whatever other rocks they climbed out from


You don't actually believe home prices will drop 30% do you? Because I would say that's hugely unlikely. Especially given the continuing trend for homes to be under agreement within 7 days of listing. It's more likely that they will experience a slight drop and then stop increasing for a long period of time whenever our bubble pops.
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PostPosted: Wed Jan 31, 2018 12:22 am GMT    Post subject: Reply with quote

Elrond wrote:
Anonymous wrote:
I hope every single buyer that has purchased real estate in the last two years of this bubble goes broke as it corrects. All of the STUPID buyers and overwhelming foreigners that have saturated this area with filth. Maybe soon I can buy their homes 30% off and they can go back to China, Russia and whatever other rocks they climbed out from


You don't actually believe home prices will drop 30% do you? Because I would say that's hugely unlikely. Especially given the continuing trend for homes to be under agreement within 7 days of listing. It's more likely that they will experience a slight drop and then stop increasing for a long period of time whenever our bubble pops.


Yeah, prices usually correct more in real terms than nominal with prices staying flat for years. I could imagine at max a 10-15% declines in nominal prices, i.e. the same drop as was experienced the last two cycles. I do not see this as coming very soon, though, nor will the decline be uniform. Prices have a better chance of increasing 10% than decreasing in my opinion.
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PostPosted: Wed Jan 31, 2018 12:35 am GMT    Post subject: Reply with quote

Anonymous wrote:
Last time in 2008 interest rates were dropped too low for way too long and money was printed. This reinflated the bubble(or flattened it as you mentioned in our area). Inflation is starting now as the money is unwound and rates rising. This time the crash will happen no matter what. Either the Fed let's the asset bubbles correct or they again over do it by dropping rates and buying more bonds. This policy has already weakened the dollar. If they do it again the dollar with plummet as the world has had enough of us playing games with the Reserve currency. If they do it again, prices won't fall-you're right. However it will take twice as many dollars to buy that real estate. Same thing as a correction but worse


The dollar is not historically weak at the moment. It has come down a bit from a year ago, but at that time the dollar was the strongest it had been in well over a decade (i.e., circa 2003). Note real estate made strong advances in the mid 2000's as the dollar weakened and the fed tightened.

As for re-inflating a housing bubble, prices consolidated in the boston area for about a decade before appreciating fairly significantly in 2013 and beyond. Were you really anticipating that prices would never appreciate, especially given the favorable economic conditions?
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PostPosted: Wed Jan 31, 2018 1:50 pm GMT    Post subject: Reply with quote

Why would anyone want to buy in Boston area? Prices have surged 30% over last couple years. The market will either correct or stagnate and personally I believe correct. Salaries here are average. Foreign influx is disgusting. Anyone with half a brain cell should look and see how many better locations are emerging in better states with growing economies and wages. An added bonus in these emerging areas is they aren't full of tax and spend creatures that have taxes so high it's citizens are now punished by the SALT cap. Boston has become an overpriced unsubstantiated filthy area.
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Geust
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PostPosted: Wed Jan 31, 2018 4:11 pm GMT    Post subject: Reply with quote

People have had the same complaints since the last big run up starting about 15 or 16 years ago until the recession. It was during that run up that this message board came to be.
Yet despite all of your valid complaints, people still find this a very desirable area to live and put down roots. Thus the crazy high prices.
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Dismayed
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PostPosted: Sun Aug 26, 2018 12:16 am GMT    Post subject: My Prediction Reply with quote

I predict that 2018 will pass, and that 2019 will be upon us in no time.
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PostPosted: Sun Aug 26, 2018 12:51 am GMT    Post subject: Reply with quote

Anonymous wrote:
Why would anyone want to buy in Boston area? Prices have surged 30% over last couple years. The market will either correct or stagnate and personally I believe correct. Salaries here are average. Foreign influx is disgusting. Anyone with half a brain cell should look and see how many better locations are emerging in better states with growing economies and wages. An added bonus in these emerging areas is they aren't full of tax and spend creatures that have taxes so high it's citizens are now punished by the SALT cap. Boston has become an overpriced unsubstantiated filthy area.


I think a couple of familiar contributers to this site did in fact move out of state several years ago. ne guy moved his family to Texas I think. Does anyone who's been here for a while remember this?
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Sun Aug 26, 2018 4:02 pm GMT    Post subject: Reply with quote

Anonymous wrote:

I think a couple of familiar contributers to this site did in fact move out of state several years ago. ne guy moved his family to Texas I think. Does anyone who's been here for a while remember this?


Balor123 moved to Austin.

Richthofen moved to Providence.

I don't recall offhand who else moved.

- admin
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