Are tractor prices dropping, have they peaked?

[Snobdds]

I don’t see a housing crash, but I do see a leveling off of prices or reduced value growth. Mortgage rates are now at 5%.

The crash in housing probably will not come like people think any time soon. As long as supply remains tight, there will be no crash. As soon as supply raises again, then it can crash.

I'm sure the fed has a deal with blackrock to buy up all the inventory to keep the market from crashing. The question then becomes, can blackrock scale up enough to keep renters in their homes. I have read they can't get these newly acquired properties to the rental market as there is no labor or materials to make them market ready. Will blackrock hold the bag for the fed...time will tell.

 

[Reddogs]

When the recession happens, anything that is optional/recreational will drop prices dramatically. I’ve lived through enough of these cycles. If you sit on cash and have it to spend in a recession you can get insane bargains on things like boats, lake homes, classic cars, etc. If anyone tells you “It’s different this time”, start picking out which of their possessions you plan to buy in the distress sale.

Very true, but if you have things that lose value such as stock, real estate, land, businesses, etc... It makes it a bit hard to keep out of the 'distress', to say nothing of the loss of capital and money...

 

[Reddogs]

No other generation will have the wealth the baby boomers did.

Their prime purchasing years happened to be when interest rates were high, but asset prices were low. They bought homes at a low cost, but had a 15% mortgage. In the 80's when interest rates dropped, they refinanced their their primary home down to a point they paid it off quicker than the 30 year norm. Then they started to buy second homes and time shares.

The current generation has the exact opposite. High asset prices but low financing. They will never be able to use interest rate movement to their benefit, nor will they ever have cheap asset prices. The dynamic is totally different.

Yes, much like Germany did in their 'little bout of inflation'... When hyperinflation drove Germans to use money as kindling

 

[IndyJay]

Very true, but if you have things that lose value such as stock, real estate, land, businesses, etc... It makes it a bit hard to keep out of the 'distress', to say nothing of the loss of capital and money...

The things you mention always rebound in value. You don't lose anything until you sell.
Hint: Buy low, sell high!

 

[Snobdds]

The things you mention always rebound in value. You don't lose anything until you sell.
Hint: Buy low, sell high!

The past decade was...buy high and finance low.

I don't know if there is a one to one correlation on buy low and sell high...but we will find out soon enough.

 

[Cahaba Valley Farm]

The current generation has the exact opposite. High asset prices but low financing. They will never be able to use interest rate movement to their benefit, nor will they ever have cheap asset prices. The dynamic is totally different.

Interesting, never thought about it like that

 

[Reddogs]

The things you mention always rebound in value. You don't lose anything until you sell.
Hint: Buy low, sell high!

Well, in the last big recession, things went south overnight before you could sell. Its not as easy as that...

 

[lman]

It seems like recently wages have gone up so much that they would need to go back down before prices would be able to go down much. From my experience it seems rare for wages to go down. When workers at McDonalds are making $20/hr, it seems it would be hard to bring prices back to what they were a couple of years ago.

 

[Torvy]

It seems like recently wages have gone up so much that they would need to go back down before prices would be able to go down much. From my experience it seems rare for wages to go down. When workers at McDonalds are making $20/hr, it seems it would be hard to bring prices back to what they were a couple of years ago.

One of many reasons this inflation has legs. Everyone up the salary food chain will want/need similar increases.

Holding cash is downright idiotic in an inflationary cycle. Put money in assets that tend to gain value over time...mostly real estate. By the time house prices collapse, of they do, the inflation will be stabilized or we will have bigger issues.

 

[Bill Guenthner]

Well, in the last big recession, things went south overnight before you could sell. Its not as easy as that...

You’re missing the point. People who don’t owe money and have a pile of cash in the bank aren’t selling in a downturn, they are buying up the properties of the people who have mortgages that they can no longer pay. People who pay cash can wait to sell when markets are up. I used to work for an older guy who during the depression in the 1930s bought every house on his block from the bank for 10 cents on the dollar when the local employer closed down.