Economics and current events, no-tweets: food prepared by the consumer unit

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Economics and current events, no-tweets: food prepared by the consumer unit

Ubiquitus: Nov 20, 2011

Cyrano4747 posted:

Hypothetically the price of housing should be tied to the interest rate, because as you said at the end of the day the monthly payment is what matters to people. The problem is that prices haven't come down despite rates going up, which means that a house that was $400k at 2.5% is just hilariously unaffordable at 7%. Ignoring insurance and taxes etc, just the raw loan, you're looking at about $1600/mo vs $2700/mo.

There are a lot of different opinions out there about why that decoupling happened - lack of building, increase in cash buyers insensitive to rates, increase in corporations (cash buyers) building rental property portfolios - but at the end of the day whatever the root cause it's a supply problem. Available houses are limited enough that the people competing for them can all afford those higher monthly payments.

Part of the issue with that limited stock is that we have a fuckload of people who bought houses in the last 10 years at very low rates. In the example above, if you have that 2.5% loan there's nothing for you to upgrade to that's even remotely as affordable on a per-month basis as your current mortgage. We're just not going to see that normal churn of people moving to be twenty minutes closer to a new job or to change school districts or upgrade the size of their place when they have their 3rd kid, and that also affects how much supply there is on the market.

One anecdote doesn�t prove anything, but I feel like I�ve heard a few so I�ll share mine too.

This is exactly the boat we�re in - we locked in at 3% on a nice starter home, but now want to upgrade - needless to say everything is overpriced, so we�re trying to remodel.

Only that�s taken two years and we�re still not ready past permitting - all housing choices are suboptimal atm.

I would still jump if rates went back down to say 5%, and I would definitely make sure if I sold it would go to locals/a family. A 1 mile^2 neighborhood in my area has maybe 100-200 homes, and at least 20 of those (that I know of) are Airbnb�s - and one person owns 10 of those AFAIK.

AND obviously zoning in my neighborhood does not allow for apartments, I know of multiple people that want to live in my neighborhood but are priced out.

To concur, convergence of a multitude of issues all at once

Ubiquitus fucked around with this message at 08:40 on Sep 23, 2023

# ¿ Sep 23, 2023 08:37

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# ¿ May 15, 2024 19:44

Ubiquitus: Nov 20, 2011

Cyrano4747 posted:

Re: rural grocery stores. I don�t really have a dog in the logistics argument, but something to keep in mind is that not all monopolies and cartels are huge national level things. Mom and pop businesses absolutely do price fixing and it�s endemic in rural places with few options.

In the 90s my family moved to rural BF Egypt in the north east right in the Canadian border. Think the kind of town where you�re a two hour drive to an airport where you fly for two hours to get to the nearest actual decent sized city.

When we moved there all three of the grocery stores with about 30 minutes of the house were owned by, two families, who slso had a lock on drug stores and iirc most of the gas stations. My mom was loving flabbergasted when she found out a loaf of generic whole wheat bread cost $2. Keep in mind this is around 1992 or so.

A few years later Walmart came to town, and with them came $.25 loaves of wal mart bread. There was a LOT of complaints about how the local grocers couldn�t keep up, how it was going to put main street out of business etc, but in the end they somehow managed to cut those $2 loaves down to less than $.50 without going out of business. Still not Walmart cheap but holy gently caress price cuts across the board.

It�s no exaggeration to say the standard of living in that area went way up.

Walmart is full of poo poo and causes tons of problems. They absolutely do undercut local business with the intent of becoming a monopoly and abusing that position in the future. But the people they�re loving in those kinds of super rural areas are frequently already fleecing the locals for everything they can, and often have been for generations.

Edit: a friend�s dad who worked the border later told me that cigarette smuggling from Canada also dropped by orders of magnitude. Just over night not a problem, because people had someone to buy smokes from other than the local grocery/convenience store cartel. Turns out the smuggling wasn�t tax evasion, it was monopoly evasion.

Super interesting, thanks for sharing

# ¿ Dec 1, 2023 20:48

Ubiquitus: Nov 20, 2011

Also tech companies needed some readjustment down, they over hired after being injected with cash during Covid

# ¿ Feb 2, 2024 17:24

Ubiquitus: Nov 20, 2011

Hadlock posted:

Economics Thread: we�re all the first macro genius to think about how to measure the economy

Decent thread title contender

FTFY

# ¿ Apr 9, 2024 22:22

Ubiquitus: Nov 20, 2011

That�s one thing I�ve never understood in this country that has endless land between cities - why the jimminy cricket is there not a separate trucks only lane that all trucks must be in parallel to the regular highway that they have to use?

# ¿ Apr 11, 2024 19:14

Ubiquitus: Nov 20, 2011

Hadlock posted:

Arguably this worked for GM if you look at their A, B and C body platform, which were all designed in the mid 1920s and survived mostly unchanged until the mid 1980s, and in the case of the B body all the way until 1996 when front wheel drive finally forced an upgrade

https://en.wikipedia.org/wiki/General_Motors_C_platform_(RWD)

If you look at the interior of a 1961 Cadillac and a 1987 the interiors are virtually identical and even today cars typically go 7+ years between major redesigns

But the only other option here is cost savings to sell more at a lower price point. The cars are already basically hollow, and unless Tesla just locked up new battery chemistry along with somehow the supply chain for them, there doesn�t seem to be any feasible method to that.

Not to mention market competition for EVs is high

# ¿ May 1, 2024 03:01

Ubiquitus: Nov 20, 2011

Lockback posted:

If the new car division was the one responsible for the cyber truck then firing them is too good for them.

There�s only one person stupid enough on this planet to will the cyber truck into existence

# ¿ May 1, 2024 03:12

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# ¿ May 15, 2024 19:44

Ubiquitus: Nov 20, 2011

Not to mention china has been at this for a while, I�m sure they�ve passed the apex of the investment/return graph. We otoh, are behind and are ramping - they also have the supply side of raw materials locked

# ¿ May 14, 2024 19:43

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