Will the used car market cool off?

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I thought it was a CA thing, but if you look at the nicer neighborhoods in Seattle, Atlanta, Dallas, Houston, Chicago, etc....it is not an unusual price point.
It’s a major urban center thing.

My area of California is much, much closer to the national average than The coast.
 
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It’s a major urban center thing.

My area of California is much, much closer to the national average than The coast.
Fair enough. But even the more rural parts of CA are $400K+ nowadays.

I guess the buyer demographic really depends on the area and the price point.
 
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Fair enough. But even the more rural parts of CA are $400K+ nowadays.

I guess the buyer demographic really depends on the area and the price point.

For sure: prices are well above even the top of the 2008 bubble in my area.

We bought (dumb luck) at the bottom in 2012 and have no desire to move.
 
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Qualifying for a mortgage today has changed a little today compared to 10 yrs ago. Gains in the stock market combined with low rates have really juiced prices. More and more people are taking out loans on their 401k or selling stock for down payments. There's also a plethora of govt down payment assistance where states and cities offer a few thousand dollars in a forgivable second lien.
If you have money in the stock market, you can just do a margin account. Various brokerages like Interactive Brokers or Robinhood do anywhere from 1.59% to 2.5% when you borrow over 100k. Basically only way now to make cash offers and then refi later with a regular mortgage or just extend out the closing date and have no finance contingency.
 
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I typical US fashion - around here people are taking the equity from their homes and putting it towards a new home at these high prices. Same old story.
 
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If I had to predict the future, I'd say that once the pandemic is truly behind us (as in most countries) there will be a big rebound in travel, going to restaurants, etc and a lot of the pandemic "hunkering down" purchase like big houses, vehicles, and pets will look less appealing. And that will push used car prices down, along with the chip shortage resolving itself.
 
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I think that depends on the area. All of the homes in my zipcode are being sold to actual families, some of them are ones that have been outbid in silicon valley.

in general large foreign interests have a bid on every home in the country

If it doesn’t sell to a human it goes to them

Simple fix, ban foreign non-human ownership of non-commercial homes.

Should also crack down on nationwide slum lords like Titan who have no place in the market

This type of nonsense is what drove prices up into failure last go around, sub prime mortgages weren’t the cause of failure, it was the perverse non-market manipulation of prices and investment

Anytime houses become completely divorced from mode income you eventually get a crash, doesn’t matter how qualified the bidder overpaying is because the majority of people aren’t participating meaning if that one guy moves it creates a domino effect once everyone is seated.
Those remaining won’t be capable of paying the cost to play.

Smart money says 3-5 years till dip, for everyone’s sake let’s hope it moves faster.
 
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If I had to predict the future, I'd say that once the pandemic is truly behind us (as in most countries) there will be a big rebound in travel, going to restaurants, etc and a lot of the pandemic "hunkering down" purchase like big houses, vehicles, and pets will look less appealing. And that will push used car prices down, along with the chip shortage resolving itself.
The problem at hand is inflation. As most goods continue to increase in price (to include new vehicles), then used cars also rise to fill in the gaps created by the increase in prices in the new car market. Add in shortages of chips and we are most likely years before the supply chain and production ramps up to normal levels. In addition, wreckless monetary and artificially low interest rates will most likely continue. The story is inflation is transitory, but not so sure that is the case. We shall see, but I don't see the used car market cooling off any time soon. Look around it's not only the used car market that is out of control. Real estate, food prices, gas prices, etc, etc. Hoping things cool off soon, but that could also mean economic recession time because the economy ran hot through COVID, which was very surprising.
 
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in general large foreign interests have a bid on every home in the country

If it doesn’t sell to a human it goes to them

Simple fix, ban foreign non-human ownership of non-commercial homes.

Should also crack down on nationwide slum lords like Titan who have no place in the market

This type of nonsense is what drove prices up into failure last go around, sub prime mortgages weren’t the cause of failure, it was the perverse non-market manipulation of prices and investment

Anytime houses become completely divorced from mode income you eventually get a crash, doesn’t matter how qualified the bidder overpaying is because the majority of people aren’t participating meaning if that one guy moves it creates a domino effect once everyone is seated.
Those remaining won’t be capable of paying the cost to play.

Smart money says 3-5 years till dip, for everyone’s sake let’s hope it moves faster.
It's a simplistic view.

You get a crash when supply exceeds demand. Right now there's very little inventory but the demand still exceeds supply so prices continue to go up. You're also not taking into account LLCs and trusts. Individuals also use those vehicles for investment purposes and tax purposes. Lots of big name sports stars buy their homes in a trust so people don't know who the owners are to protect their privacy. Individual investors also set up LLCs to purchase a single property for investment purposes. Pretty much anyone with money anywhere in the world can come to the US and buy a home, there's no residency requirement, just need to show up with the money at closing to buy a property here.
 

CKN

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in general large foreign interests have a bid on every home in the country

If it doesn’t sell to a human it goes to them

Simple fix, ban foreign non-human ownership of non-commercial homes.

Should also crack down on nationwide slum lords like Titan who have no place in the market

This type of nonsense is what drove prices up into failure last go around, sub prime mortgages weren’t the cause of failure, it was the perverse non-market manipulation of prices and investment

Anytime houses become completely divorced from mode income you eventually get a crash, doesn’t matter how qualified the bidder overpaying is because the majority of people aren’t participating meaning if that one guy moves it creates a domino effect once everyone is seated.
Those remaining won’t be capable of paying the cost to play.

Smart money says 3-5 years till dip, for everyone’s sake let’s hope it moves faster.

Chinese Nationals bought my last house-for over a half million - in cash. This was nine years ago. However-I was in a certain are in Southern California deemed desirable to them (for whatever reasons).
 
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Chinese Nationals bought my last house-for over a half million - in cash. This was nine years ago. However-I was in a certain are in Southern California deemed desirable to them (for whatever reasons).
What's desirable is that the money is out of China. Any appreciation is just icing on the cake.
 
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Chinese Nationals bought my last house-for over a half million - in cash. This was nine years ago. However-I was in a certain are in Southern California deemed desirable to them (for whatever reasons).

So long as they live there fine :0

Down the street from me a house sold for $3500 (2012) to a “Limousine company” was an ok house but became derelict since nonone touched it for several years

Asked the “limo” place if I could buy it since it was going derelict then all of a sudden it was filled with young women and the garage door bolted shut with an odd glow.

My simplistic view is the correct one, if you never are in the place and just use it as a vehicle it should be removed from your ownership, especially in the case of overseas ownership.

Far better to sell for what it’s actually worth to a townie that will live there than some guy in Sweden that lets it fall down waiting for a big break
 

CKN

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So long as they live there fine :0

Down the street from me a house sold for $3500 (2012) to a “Limousine company” was an ok house but became derelict since nonone touched it for several years

Asked the “limo” place if I could buy it since it was going derelict then all of a sudden it was filled with young women and the garage door bolted shut with an odd glow.

My simplistic view is the correct one, if you never are in the place and just use it as a vehicle it should be removed from your ownership, especially in the case of overseas ownership.

Far better to sell for what it’s actually worth to a townie that will live there than some guy in Sweden that lets it fall down waiting for a big break
They have never lived in it. They have a Son who lives in it by himself. It's a fairly large home for So. Cal (@2,500 sq. feet).
 
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So long as they live there fine :0

Down the street from me a house sold for $3500 (2012) to a “Limousine company” was an ok house but became derelict since nonone touched it for several years

Asked the “limo” place if I could buy it since it was going derelict then all of a sudden it was filled with young women and the garage door bolted shut with an odd glow.

My simplistic view is the correct one, if you never are in the place and just use it as a vehicle it should be removed from your ownership, especially in the case of overseas ownership.

Far better to sell for what it’s actually worth to a townie that will live there than some guy in Sweden that lets it fall down waiting for a big break
So now you make the rules with what people can do with their money? The houses I sell, a good percentage is to investors. They sometimes use me to find tenants for their rentals. Just a normal part of diversification, not everyone wants or trusts their money in the stock market.

That's really the beauty of private ownership, the freedom to do whatever you want with it without any input from random strangers. You'd probably have to go to communism or socialism if you want government control.
 
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They have never lived in it. They have a Son who lives in it by himself. It's a fairly large home for So. Cal (@2,500 sq. feet).
I would consider that as “living there”

The examples I have seen locally of absentee owners is very different


So now you make the rules with what people can do with their money? The houses I sell, a good percentage is to investors. They sometimes use me to find tenants for their rentals. Just a normal part of diversification, not everyone wants or trusts their money in the stock market.

That's really the beauty of private ownership, the freedom to do whatever you want with it without any input from random strangers. You'd probably have to go to communism or socialism if you want government control.

A commercial home is not a private home, it’s even zoned differently for rental

And yes the government can decide (if it wants to) how much gets turned into makeshift apartments and home much stays private by zoning.

Having half a city get bought by one useless company ruins said city
 
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Real estate is really location specific. You can have a rundown house worth nothing in rural Japanese villages, to moderately worth something in Tokyo, to sky high prices in Hong Kong and Seoul, to slightly more reasonable in the Silicon Valley, to a huge bargain I only need 15 mins to sign the dotted line deal in Dallas, to I'll pay you $1 to take this house off my hand in some rundown warzone neighborhood.

There is a tech boom, every single tech hub has appreciated due to FANG stock increase in value to the moon, plus QE to 3% 30 year fix mortgage and 350k tech job (not everyone gets them but enough of them to buy those overpriced houses). Just because you cannot afford it doesn't means others cannot. (I cannot either, but I know people who can still afford)

Many people value their children's school district more than their boat and RV, so there is incentive for over bidding those homes too. Plus many people are really just upgrading from starter home, so they are not buy 1.5M as their first home but rather selling a 700k home for a 1.5M and they bought their 700k home when it was only 400k, that kind of deal.

Around my area these days if you don't even have 20% down in cash nobody will take your offer, many are putting 30-40% down, I put 50% down when I bought a property back in 2015, I won the bid because the other guy put down only 20% for the same price offer. I wasn't investing, I need a condo in good school district, it is still cheaper than a 4 bedroom house by a lot, no regret. I'll sell it when my kids are done with highschool.

Of course there are people buying homes that are mainly construction cost, new home, far from good paying job, stay in it for 30 years, then sell it when the neighborhood and the building is "used up" to a different family at a lower price point, those are basically like a car purchase, and are typically different than people buying home in established, stable good school district because they want to. Those are different market and different buyers, you cannot value them the same way.

Most of the recent demand I see are people moving further away to a bigger nicer home that they can work remotely in, not foreign demand, but local migration from expensive place to cheaper place.
 
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Be careful what you wish for, your home might be a huge part of your retirement and suddenly you may end up unable to retire years down the road.
Yeah, I don't think it will happen. People make statements to fix a problem that affects them. But that would affect sellers and they wouldn't support such a law and there are many lobbying groups that would be against it so I don't think there's any political will to do anything like that. Probably a property rights issue that wouldn't get past the Supreme court let alone Congress. Basically his proposal would lower the selling price for sellers and benefit buyers like him. Why would any seller want that?
 
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