Radio today: Truck demand goes south - Any rumors?

[xycrazy]

I'm not in tech, so I don't honestly really know. But I think the person I know was talking about specific group in tech, namely quality programmers. But honestly IDK.

As far as home prices, YMMV, but in my area, house are going for 250-500k over ask, routinely. And that I know as a fact (and not from the below articles - from 3 friends/acquaintances who have sold recently - but I suspect that article is pretty accurate). How are people affording these prices? I can only assume they are making a lot of $$.

‘Brutal,’ ‘crazy’ housing market has Seattle-area homes selling half-million over asking price

A wild housing market is forcing many Seattle-area home buyers to pay $300,000 to nearly $1 million over asking price.

www.kiro7.com

I know the area very well and absolutely... they make a lot of money. Don't get me wrong. But it's a bubble... and so is the Bay Area and Florida. The average American can't afford it. And it's like with every bubble... over time it will pop suddenly. Especially, with these high interest rates now. 30 year mortgage rates crossed the 5% line yesterday for the first time since years. What do you think will happen to these inflated assets?

 

[GoHeels]

PMI is worth the money, IF

1) You get more money (dividends/cashflow) in the stock market than you would get with just paying less without having PMI
2) If you invest the money that you save on the down payment and leverage it...meaning you invest it in the stock market e.g. where you historically get 8-10% per year. It will nicely compound while you pay artificially low interest rates for your mortgage and inflation is eating the debt over time.

People often don't consider that as they don't understand how wealth building works. As long as you are good with money and don't live beyond your means that's the ideal way to get rich with other people's money. In this case from the bank

Definitely fair points. I just take issue with paying to insure someone else's risk and it gets you nothing. If you end up defaulting, you'll be the one that is forced into bankruptcy while the lender makes out A-ok.

Getting rid of PMI early can also be a pain. By law lenders are required to drop it automatically at 78% but you can request it as early as 80% or if your house appreciated in value enough to cover the difference. You would need a new appraisal and that comes with risks, too. Long story short, we did just that in 2016 and had to dispute the new appraisal, get a 2nd, and were finally able to get it dropped. It was such a farce and I had to pay for all of it.

 

[xycrazy]

Definitely fair points. I just take issue with paying to insure someone else's risk and it gets you nothing. If you end up defaulting, you'll be the one that is forced into bankruptcy while the lender makes out A-ok.

Getting rid of PMI early can also be a pain. By law lenders are required to drop it automatically at 78% but you can request it as early as 80% or if your house appreciated in value enough to cover the difference. You would need a new appraisal and that comes with risks, too. Long story short, we did just that in 2016 and had to dispute the new appraisal, get a 2nd, and were finally able to get it dropped. It was such a farce and I had to pay for all of it.

Interesting. Appreciate the sharing. So speaking in risks the appraisel came in low I guess. What would have been the consequences considering that you have an existing appraisal in place right before closing. You disputed the appraisal by going to court? Can you speak about the costs you had to get rid of it? I just interested in the numbers as this absolutely would be important to consider.

 

[sickk21]

I'm in tech, too and your friend is definitely exaggerating. They can earn a ton of money but base salaray is pretty low at Amazon when talking about these numbers. What they're talking about are RSUs... unvested stock that vests over a period of 4 to 5 years. First, a 2 year graduate doesn't get that many stocks. Second, Amazon is known for canning people before they have the chance to get all their stocks. But certainly, you earn a lot in Tech compared to other industries.

Can attest to this. As someone in healthcare who has looked into dabbling into tech, generally the pay looks pretty mediocre. Obviously it’s doable to make a great living in tech, just not as blatantly common as most assume and throw around.

Anyways, demand still looks to be there in my eyes for the Yukon Denali. Called 8 dealers across various [Midwest] states last week. All were sold out. Most have met allocations for orders. Most had a waitlist for anything incoming. Some were offering MSRP, most were asking a “market adjustment” fee. The 9th dealer I spoke with had one of five still available on its way to the dealer so I grabbed it.

 

[GoHeels]

New appraisal was very low. For context, we had done a fair amount of enhancements including renovating 3 bathrooms & significant landscaping. The bathrooms alone + normal appreciation should have easily pushed it over the edge, but the appraisal came back just over $5k what we paid for it 4 years prior.

No court involved. Just dispute it with the lender and IIRC paid for a 2nd appraisal. Each appraisal was somewhere around $500 and that money is non-refundable regardless of outcome. The dispute involved submitting my own documentation with supporting evidence which I enlisted the help of a local realtor to provide comparable homes and other info.

The risk is if your new appraisal comes in under your original, you now have to reach the LTV for the new appraisal amount. My guess is this is uncommon, but still a risk. Also theres no guarantee it will drop. If you are not fortunate enough to get a favorable appraisal, that is money out the window.

 

[RVAHokie]

Can attest to this. As someone in healthcare who has looked into dabbling into tech, generally the pay looks pretty mediocre. Obviously it’s doable to make a great living in tech, just not as blatantly common as most assume and throw around.

Anyways, demand still looks to be there in my eyes for the Yukon Denali. Called 8 dealers across various [Midwest] states last week. All were sold out. Most have met allocations for orders. Most had a waitlist for anything incoming. Some were offering MSRP, most were asking a “market adjustment” fee. The 9th dealer I spoke with had one of five still available on its way to the dealer so I grabbed it.

I work in Healthcare Tech. Unless you're a physician you will absolutely make more than any previous role. I came from professional services, also high paying industry, and now work for a LARGE tech company and comp packages for people with 10 yrs experience are 200-500k, regardless of location.

 

[sickk21]

I work in Healthcare Tech. Unless you're a physician you will absolutely make more than any previous role. I came from professional services, also high paying industry, and now work for a LARGE tech company and comp packages for people with 10 yrs experience are 200-500k, regardless of location.

$200k with 10 years experience? That’s what I was saying, it’s doable but not as common and easy as when everyone says “go into tech.” That’s exactly my point.

I’ve been a CRNA for 4 years with no student loans. My starting pay fresh out of college was more than $200k.

 

[firsttimetahoe]

The leverage of having the money in your stock account is much higher than just sittting in a house. What you gonna do if you need money? Can you selll a chimney? A wetbar? Some bricks? No, you can't! But you can take your money out of the stock market every day if necessary and bridge the time in between. You will be able to keep your home in that case. What you gonna do in the other case? Selling the house to the bank? Don't put everything in one basket...

It’s called a home equity line of credit

 

[R32driver]

It’s called a home equity line of credit

^This…pulled out $60k from the equity of our last house to build a shop with a nice driveway and redo the backyard landscaping. Got that money back plus much more when we sold a few years later

 

[CASTLEDFW15]

This may not affect the ESSTY platform as much but something to watch closely….

Most people would not think of this as a US issue but could be a major issue even if your purchasing stateside models. The war in Ukraine is making a noticeable difference in production and sales of European vehicakes Most notably Europe markets but if the affected units are produced in Europe can affect stateside models. For some manufacturers either Component assembly and even final assembly plants are in the war torn region. Plants either shutting down or reducing shifts for either damage or worse yet staffing shortages. Make sense, hard to go to work if either the plant, your family or property is being shelled every other day.

A major source affected is some of the palladium and other materials for Catalytic Converters is a good example.

The other even more ironic examole….. stay with me….

Neon….I said stay with me…….Neon is one of the major gases used in the production of laser welds of chips to circuit boards……the following is the irony.

Already a global Chip short…..the neon used for the assembly of some remaking chips to laser weld to circuit boards is in jeopardy……. That is prefect irony.

Again us plants nay not see any immediate impact but sometching to monitor.

 

[Stbentoak]

A major source affected is some of the palladium and other materials for Catalytic Converters is a good example.

The other even more ironic examole….. stay with me….

Neon….I said stay with me…….Neon is one of the major gases used in the production of laser welds of chips to circuit boards……the following is the irony.

Already a global Chip short…..the neon used for the assembly of some remaking chips to laser weld to circuit boards is in jeopardy……. That is prefect irony.

Again us plants nay not see any immediate impact but sometching to monitor.

. I brought all this up a month ago when the war started. The two major components of chips come from Ukraine or Russia. It doesn’t matter what auto makers think about chips, it’s what chip makers think about chips, who will pay the most for them, who needs them the worst, and what strategic industries will demand that their chip needs to be fulfilled before things like cars and Xbox’s….Having new chip factories doesn’t mean a thing if they can’t get raw materials. If Ukraine is laid to waste, it will be years and years before they can get back up to speed and get their infrastructure put together. It is truly tragic what is happening to the people over there, but it is equally as tragic as they are destroying infrastructure that will take many many years to rebuild….. no infrastructure….no factories, no jobs, no homes, and who’s going to pay for all of this? Russia? ……I doubt it.
Best place to be financially? Debt free please….and yes I’m a Boomer….

 

[xycrazy]

^This…pulled out $60k from the equity of our last house to build a shop with a nice driveway and redo the backyard landscaping. Got that money back plus much more when we sold a few years later

Try that during a recession

 

[tom3]

I've always thought that the Space Station was a low gravity sterile manufacturing facility (or farm) to produce (grow) the material in the super chips we use today. From what I can gather the Russians have the upper hand in that orbiter. Going to be real interesting to see how all this turns out. Might be a real long time before the situation gets back to normal.

 

[Vinnoto1]

Prices will only go up, even if there is more competition in this market.

The wait time for producing cars is an industry wide problem for the most part. Ford is having similar delays if you want to order their Expedition.

As far was rather having a 2023, have they confirmed any material changes from the 2022? I’ve heard most things on constraint or have been just no longer offered should be available, but other than that what is going to be the difference if you can get everything you want in a 2022 versus waiting for a 2023?

Super cruise is a possibility. They’ve been advertising it in the sierra with a larger infotainment system on TV. That would be a great add for 2023 but knowing GM it’s unlikely lol.

 

[RVAHokie]

$200k with 10 years experience? That’s what I was saying, it’s doable but not as common and easy as when everyone says “go into tech.” That’s exactly my point.

I’ve been a CRNA for 4 years with no student loans. My starting pay fresh out of college was more than $200k.

No that 200k number is very common, even on the low side. Your example of 200k as a CRNA isn’t really straight out of college though. You had at least 1-2 years of experience as a BSN RN in a high acuity setting plus 3 non earning years during your CRNA program. On top of that you came out on the very top of your salary range with less room for growth. I used to work for a top CRNA program so I’m very aware of the requirements, income potential, etc

So after 5 years you’re making 200k when someone in tech is probably the same, maybe more but with a much higher growth potential. Don’t get me wrong, you make great money but the tech person is going to blow you out of the water year over year. I work at AWS and get 30-100k in stock a year over the next four years. And that’s if it doesn’t grow at all. If I leave and go to google, Microsoft, etc they’ll double that. Again, the ceiling is 10x compared to most healthcare roles

 

[firsttimetahoe]

Try that during a recession

You can open up a HELOC today and you have 10 years to make a withdrawal from it.

Btw we had a recession (albeit quick) in 2020 during the covid pandemic and home
Values we’re soaring….

 

[xycrazy]

You can open up a HELOC today and you have 10 years to make a withdrawal from it.

Btw we had a recession (albeit quick) in 2020 during the covid pandemic and home
Values we’re soaring….

Yeah worked maybe last time because the Fed and the government were printing money like there‘s no tomorrow. That’s changing right now. Interest rates for 30 years have soared to 5%. Affordability goes down and so does home values over time until the FED is back in the game.

 

[firsttimetahoe]

Interest rates for 30 years have soared to 5%.

5% is still historically very low.

I don’t understand your rationale anyway.

You’re talking how it’s more advantageous to have your money in the stock market during a recession because you have access to it immediately for the purposes of needing to withdraw it. Your portfolio in the stock market is going to get crushed in a recession and that is literally the worst time to be withdrawing.

You sound like a classic buy high sell low investor

Investing your post taxable dollars in the stock market should never be your solution if you have short term liquidity needs. Frankly; if you may need access to your money within the next 2-3 years I would never advise you to invest in the stock market. It should be a long term approach.

 

[R32driver]

We dumped a small fortune into our new house (75 year old farmhouse) during the last couple years. Full kitchen, dining, laundry, office remodel. Added another bathroom. Re-roofed (5500 square foot of roof, ouch), all new appliances, completely new HVAC system with AC/heatpump. All cash out of pocket and I'd much rather have that money right here in a tangible asset than floating around in the stock market. That's just me though, much rather own dirt, buildings and vehicles/equipment. That stuff will always have value IMO

 

[xycrazy]

5% is still historically very low.

I don’t understand your rationale anyway.

You’re talking how it’s more advantageous to have your money in the stock market during a recession because you have access to it immediately for the purposes of needing to withdraw it. Your portfolio in the stock market is going to get crushed in a recession and that is literally the worst time to be withdrawing.

You sound like a classic buy high sell low investor

Investing your post taxable dollars in the stock market should never be your solution if you have short term liquidity needs. Frankly; if you may need access to your money within the next 2-3 years I would never advise you to invest in the stock market. It should be a long term approach.

5% is not low imho. Especially not when you consider how insanely high house prices are right now. I don't disagree with you when it comes to the impact on the stock market in a recession in general. However, there are sectors they do very well during a recession.

I just said that you have immediate access to money in the stock market as opposed to money sitting in a house. If the market changes and interest rates go up I can shift investments from growth stocks to bonds or high yield saving accounts. The FED is planning to rise interest rates in .5 increments after every fed meeting this year. We will have at least 6 meetings this year. That means an uptick in interest rates of another 3% at least. At this point one could easily put money in a high yield savings account without any risk. Also, there are always stocks during a recession which outperform the market. I'm not against a larger amount of down payment. But I'm against of putting all money in one basket and giving up flexibility. Which would be clearly the case here.

It sounds like you're not a big fan of the stock market. Granted. From a logical standpoint though you have much more flexibility to do with your money what you want.
Why do you think Warren Buffet doesn't invest in real estate at all but solely in the stock market since decades? He survived every downturn, every recession in the last decades and got richer and richer and richer... just saying...

You may want to take a look at the charts below. Never before have we seen interest rates skyrocketing like this. Right before the 2008 crash they were at the same level. We're on the way to a recession caused by the government and FED IMHO. Diversification of a portfolio is important imho. And the S&P 500 did very well during recession times... After a recession the S&P always reached new highs. You can't say that for the housing market per se. Think about Michigan, Illinois, Ohio, etc.