2023 Phoenix Area Home Prices (Mesa, Scottsdale: apartment complexes, rentals, house prices)
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Anything is possible. The FED was worried about raising rates and causing more bank defaults. Also, when you shrink or add money supply to the economy, it takes a while actually to show up in the economic numbers. So the pause was to examine what will happen with the recent cuts. But inflation HAS come down in many sectors. Overall, inflation is around 5% which is still too high. In my industry, suppliers are having sharp sales. My industry is down by 35%. While we are talking down markets, ask a commercial appraiser about how they are doing? They are sucking I could add 50 more examples. A lot of words to say inflation IS way down from the high. Though people are consuming more services like travel and fewer material goods.
The odds of repeating the 70's are far less likely to happen because they are reminded of that history in every meeting.
I'm sitting in MN for the summer. I paid $3.35 a gallon (less my 4% off Costco card). Folks in AZ are getting screwed. And home prices in FL, AZ, SD, TN, NC, GA, TX, and NV are bouncing partially back to their highs. Housing WOULD be dropping if people decided to sell. But they aren't.
As I mentioned before, I know a few people who decided to sell their paid-off home and rent to wait out the "crash". Then, they plan to rebuy after this MASSIVE supposed correction. How is that working out for them? In my example, mine dropped $175K and it's back to up $125K. Sitting expensive homes are actually going pending. That surprised me.
I continue to see rises in prices at the grocery store government inflation numbers lag behind what we see at the grocery store. The FED got us into this when they repeatedly said inflation would not be a problem. They are wrong most of the time. They need to move rates to double digits and push the country into recession. Labor costs are not going down those increases in wages are not going to just go away by themselves. The only way to reverse wage increases is to layoff at the same time cost of living like rent, and homes has to also go down.
I continue to see rises in prices at the grocery store government inflation numbers lag behind what we see at the grocery store.
Here is my point. Inflation isn't about what Kell490 remembers getting shocked with on prices. It's the average of the entire basket of goods including substitutes. We are talking education, recreation, apparel, overall transportation costs (air, bus, shipping, miles per gallon when you buy gas, etc). In fact, car prices dropped about 10%. So just because you see a Toyota car (extremely low inventory) get over sticker doesn't mean that a substitute (Tesla Model 3) didn't drop to $35K with a rebate. If fact, I'm looking for a commuter car. A RAV4 or a new Honda CRV. But now, I am staring at a new Tesla because will cost me $35K because they had a price DROP.
Quote:
Originally Posted by kell490
The FED got us into this when they repeatedly said inflation would not be a problem. They are wrong most of the time.
I propose the FED knew EXACTLY what was going on! And they wanted much higher inflation (until it got out of control). You see, they got at my net worth without raising a tax by making my savings worth less $. So all of a sudden, the $31T debt is not worth as much in real dollars. But that's another topic.
Quote:
Originally Posted by kell490
They need to move rates to double digits and push the country into recession. Labor costs are not going down those increases in wages are not going to just go away by themselves. The only way to reverse wage increases is to layoff at the same time cost of living like rent, and homes has to also go down.
Sure, we are going to have a recession. The only question is when. And that's ALWAYS the case in life. In fact, many more recessions in our lifetime. And as sure as I'm sitting here, housing prices will follow if it gets bad. The only debate is how much. Just remember, that 40% of people own their home outright. And even if they don't own it outright, many people have a massive amount of equity. Then, a lot of people who have cheap mortgages COULD have paid cash. I just described that 40% of my neighbors have a mortgage. Nearly every one of them could have paid cash. And for whatever reason, some people are unable to understand that the adjusted price of a house (considering inflation) has not gone up nearly as much as someone's perception. As sno said: there are different markets out there inside of the same city. Sure, 1st-time buyers are suffering the most. At the same time, more and more wealth if coming into the PHX metro.
As for your hot buttons. For nearly everyone, gas prices have come way down. This week, I paid $3.24 a gallon on the way up North from the Twin Cities at Costco https://www.gasbuddy.com/station/602 (less 4% on my Costco Credit Card).
Re: groceries. Eggs are WAY down too. When they were high, I barely bought them. With all items, I buy substitutes. If crab legs are way up in price, I buy shrimp of tilapia or cod. I refuse to pay the crab leg prices. If blackberries surge, I guy the tray of raspberries for $1.25 because I refuse to pay the price of high blackberries. Like many, I chose the location of the basket of goods. re: groceries, I buy at Aldi's or Costco. Just look at the trends of what where and what people buy. That's how you calculate inflation. The new methodology takes into account changes in the quality of goods and substitution. And you aren't. Your focus is on the items you are shocked by and forget to calculate with people are doing about it (many don't buy it or choose another store). Rest assured, many items have been coming down in price. You just cannot wrap your head around it.
Last edited by MN-Born-n-Raised; 06-17-2023 at 03:55 AM..
Inflation is still out of control look at this map from AAA not just Arizona where average price of gas is over $4 a gallon. The reason isn't a barrel of oil it's increase in wages. Like I said corporations are not going to just tell their employees FED says inflation is down you have to give up those wage increases we gave you.
Inflation is still out of control look at this map from AAA not just Arizona where average price of gas is over $4 a gallon.
No. The national average of a gallon of gas is $3.577 to be exact. And... I used your source. Look on the right side of the link. https://gasprices.aaa.com/ It reads "Today's AAA national average price of gas is $3.577 on 6/16/2023". You cannot miss it. The map clearly shows the high prices are located on the west coast. Plus IL where everything is high partially because of Unions as too many people on welfare, Medicaid, food stamps, housing assistance, etc.
Inflation is still out of control look at this map from AAA not just Arizona where average price of gas is over $4 a gallon.
No. The national average of a gallon of gas is $3.577 to be exact. And... I used your source. Look on the right side of the link. https://gasprices.aaa.com/ It reads "Today's AAA national average price of gas is $3.577 on 6/16/2023". You cannot miss it. The map clearly shows the high prices are located on the west coast. Plus IL where everything is high partially because of Unions as too many people on welfare, Medicaid, food stamps, housing assistance, etc.
Back to the gas prices. That's the average price at the pump and averaged out. So if Shell charges $5 a gallon and finds some victims, that doesn't mean that station sells an average amount of gallons. As prices go high, people are much more price-conscious. Just watch the lines at Costco to figure that one out. In that AAA example, I paid $0.25 less per gallon. And another 14 cents less per gallon with my Costco 4% rebate. a.k.a. people can dodge the pain of specific items going up. And that's how they calculate inflation. Not looking at a few shocking prices at the store every week.
Big picture. Inflation has come way down. Yea, by definition, many items are still going up. Because inflation is around 5%. So sure, some items are still surging. But many items have dropped pretty hard. No, the price of B&M beans isn't going to drop to January 2020 prices. But unless we have a bean or brown sugar shortage, it's not going to go up. I think you are confusing inflation with what you use to pay. If that's your metric, then I see what you mean when I compare those B&M bean prices to 1980.
I continue to see rises in prices at the grocery store government inflation numbers lag behind what we see at the grocery store. The FED got us into this when they repeatedly said inflation would not be a problem. They are wrong most of the time. They need to move rates to double digits and push the country into recession. Labor costs are not going down those increases in wages are not going to just go away by themselves. The only way to reverse wage increases is to layoff at the same time cost of living like rent, and homes has to also go down.
The LAST thing we need to do is go into a recession, resulting in a loss of jobs & income, and causing more hardship than what we have now. Maybe you're confusing recessions with corrections, which are normal cyclical patterns in the economy. Interest rates were at double digit levels in the late '70s/early '80s, and inflation was still a major problem at that time (only referred to then as "stagflation"). I can't believe you actually want to return to that period.
Look up Reaganomics. We need something similar to that at this point to reduce government spending & tighten the money supply. The federal government has been the primary cause of inflation, especially stemmed by the COVID "relief" bills (started by Trump and continued unrestrained with Biden). The federal debt is out of control. Even though Reagan was a big spender himself & worsened the debt, his initial economic recovery plan worked well, and it's why a lot of people look at the 1980s as one of the best economic periods in history. The overall cost of living became more reasonable during that time largely because of Reagan's policies. We can't go on like we are now, but we don't want another big recession to make things even worse.
The LAST thing we need to do is go into a recession, resulting in a loss of jobs & income, and causing more hardship than what we have now. Maybe you're confusing recessions with corrections, which are normal cyclical patterns in the economy. Interest rates were at double digit levels in the late '70s/early '80s, and inflation was still a major problem at that time (only referred to then as "stagflation"). I can't believe you actually want to return to that period.
Look up Reaganomics. We need something similar to that at this point to reduce government spending & tighten the money supply. The federal government has been the primary cause of inflation, especially stemmed by the COVID "relief" bills (started by Trump and continued unrestrained with Biden). The federal debt is out of control. Even though Reagan was a big spender himself & worsened the debt, his initial economic recovery plan worked well, and it's why a lot of people look at the 1980s as one of the best economic periods in history. The overall cost of living became more reasonable during that time largely because of Reagan's policies. We can't go on like we are now, but we don't want another big recession to make things even worse.
You can't rollback wage increases without layoffs and recession. Good luck telling employees now that your eggs are cheaper you will need to give up $4 an hour raise, we gave you back in 2022. When prices fall back to 2019 then ill agree inflation is over.
Quote:
Originally Posted by MN-Born-n-Raised
No. The national average of a gallon of gas is $3.577 to be exact. And... I used your source. Look on the right side of the link. https://gasprices.aaa.com/ It reads "Today's AAA national average price of gas is $3.577 on 6/16/2023". You cannot miss it. The map clearly shows the high prices are located on the west coast. Plus IL where everything is high partially because of Unions as too many people on welfare, Medicaid, food stamps, housing assistance, etc.
Back to the gas prices. That's the average price at the pump and averaged out. So if Shell charges $5 a gallon and finds some victims, that doesn't mean that station sells an average amount of gallons. As prices go high, people are much more price-conscious. Just watch the lines at Costco to figure that one out. In that AAA example, I paid $0.25 less per gallon. And another 14 cents less per gallon with my Costco 4% rebate. a.k.a. people can dodge the pain of specific items going up. And that's how they calculate inflation. Not looking at a few shocking prices at the store every week.
Big picture. Inflation has come way down. Yea, by definition, many items are still going up. Because inflation is around 5%. So sure, some items are still surging. But many items have dropped pretty hard. No, the price of B&M beans isn't going to drop to January 2020 prices. But unless we have a bean or brown sugar shortage, it's not going to go up. I think you are confusing inflation with what you use to pay. If that's your metric, then I see what you mean when I compare those B&M bean prices to 1980.
Your cherry picking. Have you priced out what it cost to remodel a kitchen lately?? The majority of increase now is labor driven those high wages are not going away. That is why you're seeing oil falling back but gas prices still surging. Western US should be in the low $3 range and states like TX should be in the $2 range for gas if you look at what oil vr gas prices were historically.
Have you priced out what it cost to remodel a kitchen lately?? The majority of increase now is labor driven those high wages are not going away. That is why you're seeing oil falling back but gas prices still surging. Western US should be in the low $3 range and states like TX should be in the $2 range for gas if you look at what oil vr gas prices were historically.
I'm fully aware of what remodeling costs. In AZ, I have an overpriced $18K media wall in the works and a $45K small landscaping project re-doing our courtyard. Knock off a solid 30-35% if I did this in 2019. I paid a 26-year-old moonlighting electrician $180 an hour ($2K in electrical labor to add a couple of outdoor heaters). I can go on by adding in things that I have to do in our MN home. And labor costs are expensive because no one wants to work with their hands. Supply and demand. I don't see that trend changing. Rather, more people sitting on their arses (20% of the working-age people pay $0.00 in taxes).
You are confusing terminology. The inflation RATE (it can go up, down, or sideways) is still going UP! But, the RATE of increase has gone way down. That's what I mean and what I have been talking about. The same with the FED and every other article like this one https://theweek.com/inflation/101934...casts-for-2023 . So, by definition, the rate of inflation has come down (most simply call it "inflation" like the article I listed). And some individual items in the basket of goods have come DOWN while some other items keep on going up too much. As an aggregate from 2020-2022, the basket of goods surged massively (a.k.a. the inflation RATE). And while the rate (inflation) is still going up, some items are deflating or coming down in price. The net-net, inflation going forward is around 5% UP which is still too high. The feds want to RATE to come down to around 2%. And when it does, prices are still inflating (an aggregate).
My point has always been, labor, housing, remodeling, etc as an aggregate won't necessarily come down again. Nor wages. Just like we are not going to be buying home prices in 1970 dollars. That ship has sailed. But, a lot of things have come down that go into a product. Manufacturers are trying to hold on to those higher margins and some of them cannot because people are shifting their spending habits. Hence, chips and container load freight items have come down and many widgets have taken margin drops.
So no, labor costs don't have to come down for the FEDs to ease up on interest rates. Don't ever assume $1M is going to buy you a mansion again in Scottsdale or that wages are going to come down as a whole. That ship has sailed! Money is officially worth less than it was. If your financial planner told you that you needed $3M to retire in 2019, now add an additional 30% to that number or $3.9M (maybe even a little more).
Last edited by MN-Born-n-Raised; 06-19-2023 at 06:21 AM..
I'm fully aware of what remodeling costs. In AZ, I have an overpriced $18K media wall in the works and a $45K small landscaping project re-doing our courtyard. Knock off a solid 30-35% if I did this in 2019. I paid a 26-year-old moonlighting electrician $180 an hour ($2K in electrical labor to add a couple of outdoor heaters). I can go on by adding in things that I have to do in our MN home. And labor costs are expensive because no one wants to work with their hands. Supply and demand. I don't see that trend changing. Rather, more people sitting on their arses (20% of the working-age people pay $0.00 in taxes).
You are confusing terminology. The inflation RATE (it can go up, down, or sideways) is still going UP! But, the RATE of increase has gone way down. That's what I mean and what I have been talking about. The same with the FED and every other article like this one https://theweek.com/inflation/101934...casts-for-2023 . So, by definition, the rate of inflation has come down (most simply call it "inflation" like the article I listed). And some individual items in the basket of goods have come DOWN while some other items keep on going up too much. As an aggregate from 2020-2022, the basket of goods surged massively (a.k.a. the inflation RATE). And while the rate (inflation) is still going up, some items are deflating or coming down in price. The net-net, inflation going forward is around 5% UP which is still too high. The feds want to RATE to come down to around 2%. And when it does, prices are still inflating (an aggregate).
My point has always been, labor, housing, remodeling, etc as an aggregate won't necessarily come down again. Nor wages. Just like we are not going to be buying home prices in 1970 dollars. That ship has sailed. But, a lot of things have come down that go into a product. Manufacturers are trying to hold on to those higher margins and some of them cannot because people are shifting their spending habits. Hence, chips and container load freight items have come down and many widgets have taken margin drops.
So no, labor costs don't have to come down for the FEDs to ease up on interest rates. Don't ever assume $1M is going to buy you a mansion again in Scottsdale or that wages are going to come down as a whole. That ship has sailed! Money is officially worth less than it was. If your financial planner told you that you needed $3M to retire in 2019, now add an additional 30% to that number or $3.9M (maybe even a little more).
Housing is a major cost for American's if every aspect of ownership cost 20-30% more than it did 24 months ago can't see how anyone can argue things are cheaper. It's a fake argument by the FED who think they can dance a line between keeping banks from failing and inflation under control. I'm predicting double digit FED interest rates by election day 2024.
Housing is a major cost for American's if every aspect of ownership cost 20-30% more than it did 24 months ago can't see how anyone can argue things are cheaper.
You continue to debate a point with yourself that no one else is arguing. Everybody but you is saying that "Inflation is coming down" and that means the RATE is coming down. The FED never ordered up deflation. Though, whenever you mess with interest rates, there will be business winners and losers.
Quote:
Originally Posted by kell490
I'm predicting double digit FED interest rates by election day 2024.
I'm not going to hold my breath. You are fixated on the FED's job isn't done until housing drops in price.
Last edited by MN-Born-n-Raised; 06-20-2023 at 04:40 AM..
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In my example, mine dropped $175K and it's back to up $125K. Sitting expensive homes are actually going pending. That surprised me.
