So 30% from 2020 through 2027 or eight years is crazy? That's barely over 3% a year. What a smoking win for the company, not even BS CPI rates.

 

Serious question. We are now seeing monetary tightening from the fed. Housing cost will fall, yes rent too despite the current spike. Supply chains are being worked out and prices on things like cars and furniture are returning to normal price range. Now of course you have energy cost but that’s what happens every time a dem starts a war with oil, and that of course matriculates throughout the economy. Hopefully they’re gridlocked after November.

Now the question. Do you not believe that CPI items are going to go down in the future? Do you think that the housing cost, energy cost, grocery cost etc are here to stay and will only continue to climb from now on? Most of these issues (minus the energy cost) were driven by COVID lockdowns.

 

If the company wants to let our following contract soak for 3 or 4 years past the next amendable date, that giant retro check and/or self-help is their sword to fall on. Trying to negotiate for rates now that cover the next contract cycle is just going to further draw out this one with very little chance of it paying off.

 

The money has already been printed and entered the various markets. Zillow expects, Freddie Mac and numerous others are saying 5 to 6% increase in homes during 2023.

You have to remember that a lot of these homes were second homes purchased by the very wealthy Boomers and first time Millenial home owners. There still aren't enough homes out there for the people that want them. Rates have been a lot higher than 5.8% for a 30-year fixed and home prices still went up. Sure, there may be some isolated areas where people thought they could work from home forever and bought into highly speculative markets but that is the exception.

Let's look at what drives major costs for Americans. Healthcare, auto loans, real estate and insurance. I don't see insurance dropping, not even a little bit. Most manufacturers have been adding heavy price increases to their flagship vehicles and continue to have a quarter million to million item backlog.

Commodities are still stretched thin, as is labor.

There is no way they will set the incumbent President up for a Depression level event to restore pricing power to pre-Covid, they just won't.

WW3? Then all bets are off. Half the seniority list will be recalled or in a draft.

 

I think zillow is wrong

 

They could be. What about the rest of it?

 

I don't believe CPI accurately measures inflation, which is why a CPI+ multiplier should be used.

"... if inflation was still calculated the way that it was back in 1990, the official rate of inflation would be above 10 percent right now [February 2022]. And if inflation was still calculated the way that it was back in 1980, the official rate of inflation would be above 15 percent right now."

A5S

https://thewashingtonstandard.com/is-the-real-rate-of-inflation-more-than-twice-as-high-as-the-number-we-were-just-given/

 

Me too. They’re in the housing business. Phillip Morris isn’t going to tell you to quit smoking.

 

Well sure rates have been higher before, but you have to compare median income to home prices back then. I don't see where the money is going to come from to support continued housing appreciation today. People in many industries, not just ours, have lost tremendous buying power over the last 40 yrs, and especially the last 3 yrs. Wages by and large have not kept up with inflation, and particularly housing inflation, over that same period longer period. This low rate experiment going back to the post 2008 crash has helped this inflationary situation plus the lack of home building. Millenials are all grown up now and finally on the other side of the disastrous student loan frenzy of our 20s and were having families and buying homes.

Meanwhile, our trophy weilding boomer parents are aging in place creating this lack of supply. My guess is that the housing market will rebalance when boomers pass away. All those homes will be inherited and sold. We'll see in 10-15 yrs.

I'm just a pilot so I am mostly full of crap on the above. Just my 2 cents, after adjusting for inflation ...

 

https://fortune.com/2022/08/28/odds-of-falling-home-prices-by-housing-market-as-told-by-one-interactive-map-corelogic/

If home prices only go up 2.4%, that will be the smallest increase since 2010. We had a recession between the GFC and Covid. Not talked about very often, but it was there.

During the GFC home prices dropped 20% on average. But it was housing and excess that caused the entire financial meltdown to begin with.