The Glut Cometh

[Tinhack]

Lumber sales also can be a harbinger of what's to come in the next 6-18 months.
That doesn't necessarily mean the sky is falling though, anything as hot as the housing and retail markets have been in the last 2 years has to cool off sometime.

Except around here. A new development went in just down the road from me at the start of Covid. 3/4ac. lots started at $84,600 and went to $125,000 for 1.2ac lots. The homes going in there practically cover the entire lot. Homes and prices like that were unheard of in this rural community. The building has continued all through the Covid crisis and still going strong. I seriously doubt you'll see prices returning to a pre-covid level. The Feds just raised interest rates by another .75%. Don't be looking for bargains any time soon. The only thing that will cool this now is a war with China or Russia.

 

[shooterdon]

The increase in interest rates will dial down prices and home sales. It will also affect construction activity. And if, as I expect, wage increases lag, people will have less buying power as inflation continues. Look for more companies laying off workers as well.

Not a pretty looking future for most.

But it may be a very good thing for Americans. Most are not living in the real world and suffering is an excellent wake up call. I hope not to see $50k cars lined up at the food bank some day. I stopped giving to the food bank when that happened.

 

[jyoutz]

The housing market is regional. Looking at it nationally in a country as large as the US tends to hide causes and is more click bait than anything else. There will be overlap, but the effects will be less in areas with a better core economy.

True, but the wood products industry tends to do a national outlook with regional breakdowns. Lumber is sold across regions.

 

[tacticalturnip]

I hope not to see $50k cars lined up at the food bank some day. I stopped giving to the food bank when that happened.

$50k seems nothing more than the high-end of average vehicle prices. I was at a RAM dealer the other day and the brand new version of my '18 half-ton was $60k, and it's just a mid-range pickup. It was a bit painful.

 

[ultrarunner]

For 20 years I drove the $800 Plymouth I bought in high school...

My one new car ever was 30k...

The food bank pictures here with late model high end cars are cause for reflection...

But then I managed Section 8 rentals and several if the tenants only buy new cars... so it is possible to qualify for assistance and still buy brand new vehicles.

 

[MossRoad]

I don’t doubt what people see at their own locations. I know different areas have different issues.

Mostly what we see at our food bank are pretty hard used cars. The few that are newer looking are people that are picking up orders to deliver to others who can’t drive themselves for various reasons.

 

[ultrarunner]

On a related note one of my friends owns a carwash with detail services.

It is a good size operation so much so the local police spoke to him about traffic obstruction due to the high volume of customers...

Even during pandemic he had good business when allowed to be open.

The last 6 weeks he reports business down 60% and those coming in are opting for basic service...

Of course home sales here are languishing from just 90 days ago with price reductions the norm... and inventory up.

 

[5030]

decided I'd just hold onto my old GMC pickup.

Smart move for now. Last off lease buggy I bought was a 14 Ford Focus SE Hatch with a 5 speed and I bought it for 10 cash with 22K actual miles from a Ford dealer (had the balance of the factory warranty left which I extended an extra 3 years because of all the electronics). Never had any issues with it. Still have it, excellent car and it gets 40 mpg too. Sticker was 24K btw. They also had an off lease RS Focus that I almost got instead but my wife said no. She knows I have a lead foot and would probably lose my license with the RS which is a supercar in econobox clothing.

Bought my wife a Suburban the same way, Loaded LTZ and gave 16 for it with 62K miles on it. They retail for 80+ today.

Now is not the time to peruse the used-off lease market but it will come back around in time so long as this current wacko administration don't do another Obama 'cash for clunkers' deal.

 

[cqaigy2]

I don’t doubt what people see at their own locations. I know different areas have different issues.

Mostly what we see at our food bank are pretty hard used cars. The few that are newer looking are people that are picking up orders to deliver to others who can’t drive themselves for various reasons.

I'd characterize our food banks to look similar. If i saw nice cars there and people that owned or were paying on them, at the food bank, i'd probably take a dim view until i actually thought about how a newly unemployed family might look. I wouldn't expect them to sell their nice vehicle that they may need to get employment, for a lose, just because i looked sideways at them at the food bank.

 

[5030]

I stopped giving to the food bank when that happened.

So did we actually. When you see some supposedly 'up against it' people in line in their Escalade with the ac running while waiting for a handout, it really sours your 'give for charity' attitude.

I don't make any charitable contributions anymore. Charity begins (and stays) at home in my opinion and that includes political donations to various candidates who pander for money constantly. They all go in the round file, via the shredder.

I do donate to the Heritage Foundation and I do receive the Imprimis news letter. Don't have an issue with them or Hillsdale College either.

My wife and I are charitable people but it appears that a lot of people are abusing that so we quit.