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1   anonymous   2017 Jan 1, 7:11pm  

Not bad, Logan. You gave a clear, thorough explanation of your prediction. Thanks for sharing.

2   _   2017 Jan 1, 8:33pm  

It's going to be a very boring year for myself, 90% of the bears simply gave up when Trump got elected, replaced by a few liberals who don't know much about economics. MMT people are always touting recession, they're easy to pick off..

Going to be zzzzz

On another note, if you guys love tropical resorts, I highly recommend JA Manfaru on the Maldives, leaving today from it, but it's the best resort I have ever been

3   _   2017 Jan 1, 9:10pm  

Ironman says

Even better when mommy and daddy pay for it.

Tsk Tsk old man.... At age 41 I have double my parents net worth.... still living off Roberto's line even after all these years

Well since you won't go this is what you're missing out


4   _   2017 Jan 1, 9:32pm  

Facebook live discussion on it... a bit more details...

Since domestic investment will still be light in 2017, I still see GDP 1.9%-2.3% range. If the dollar breaks over 108... you could see manufacturing hit

https://www.facebook.com/Logan.Mohtashami/videos/vb.783163249/10154391735403250/?type=3&theater

World trade is picking up from the lows but a stronger dollar could damp that down, consumption is good enough still

5   Strategist   2017 Jan 2, 7:49am  

You're having too much fun Logan. We're all getting jealous.

6   justme   2017 Jan 2, 12:48pm  

Logan Mohtashami says

At age 41 I have double my parents net worth. (misc gratuitous photos)

Look, Logan went to a hotel with a view. Bullish! Was Tom Vu there with you?

From the linked article:

>>For the past few years I have stayed true to my channel call for the b0nd market ten-year yield to be between 1.60 -3%.

You've been giving yourself an almost 2x range of latitude in your interest rate "prediction". Am I supposed to be impressed?

>>Home prices still have legs to go higher in 2017. This is due more to supply then demand.

You still have not fixed this whopper of a mis-statement? I mean there is the grammar, the logic, the spelling, did I miss anything?

7   _   2017 Jan 2, 3:10pm  

Ironman says

Some day you might wake up

and some day you won't be Ironman

8   _   2017 Jan 2, 3:12pm  

I do have to say, I am proud of you guys for not attaching some doomsday theory in 2017 due to Trump

9   anonymous   2017 Jan 2, 3:59pm  

Logan Mohtashami says

Over investment is always the core root of every recession but I am not sure how much capital investment we have in this cycle or next that would create it in housing and cars..

Wouldn't cheap money (like what we've had for years now) drive over-investment in pretty much anything that can take advantage of it? Investment would seem to be the only thing to drive any sort of return whether it be stock-buybacks, cars, houses, etc.

10   _   2017 Jan 2, 4:04pm  

just any guy says

drive over-investment in pretty much anything that can take advantage of it?

Funny you should ask that... at the conference I am going at the end of the month for the CAR talking about Trump and U.S. economics

One of the things that I want to get across is this very thesis

Low rates doesn't = high velocity in a light demographic patch... and I am going to explain it with this theory that you can't get a booming economy or a major bubble in a light demographic patch because there simply isn't enough prime age labor force growth to drive that demand.

1996-2007 you had decent demographics and we had the tech boom and the housing boom both to bust.. both had massive over investment thesis and unsustainable prices ... here we have had low rates for many years but no traction... this was the reason why all my GDP prediction had 1-2 handle % because we are light demographically thus not needing an over-investment thesis

I talked about that briefly in the article on why the builders did the smart thing on building light in this cycle

11   _   2017 Jan 2, 4:28pm  

Housing is the cost of shelter to your own capacity to own the debt ....that's how I always looked at it ...

I know you guys are investment people... If you wanted to follow a model for that once inventory gets over 6 months annually especially for 18 months, the pricing power is going away, once inventory is much higher than 6 months...depending on that is going on in the cycle that is when you want to buy, if you're looking for an investment, like claims once a high level of inventory months starts to decline that is the real safe time to get in price wise.

12   anonymous   2017 Jan 2, 4:49pm  

Strategist says

Stop with the "what if's" If you dwell too much on the possible negatives, you will never have your own home.

Just buy it.

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

13   _   2017 Jan 2, 5:04pm  

just any guy says

India and China enter their recessions

Foreign buyers make up less than 300K of total sales out of 6,000,000 and some of these people are so high end and have connections to the government that they will have access to park $$$ in CA real estate always, it's not a big number in nominal terms but in place like Irvine CA where I live it's a big portion of the new homes bought in the city.

14   anonymous   2017 Jan 2, 5:09pm  

Logan Mohtashami says

Foreign buyers make up less than 300K of total sales out of 6,000,000 and some of these people are so high end and have connections to the government that they will have access to park $$$ in CA real estate always, it's not a big number in nominal terms but in place like Irvine CA where I live it's a big portion of the new homes bought in the city.

Good to know.

15   Strategist   2017 Jan 2, 5:09pm  

just any guy says

Strategist says

Stop with the "what if's" If you dwell too much on the possible negatives, you will never have your own home.


Just buy it.

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

You have saved up $200K for a down payment. I'm pretty sure you could have purchased a home 4 years ago at a bargain price but did not. This is a classic case of "paralysis by analysis" You will drive your wife crazy.
Please pass on this message to your wife:
Dear Mrs. Just Any Guy,
Make hubby buy you your dream home. Everyone deserves one.
All the best
Strategist

16   anonymous   2017 Jan 2, 5:12pm  

Strategist says

I'm pretty sure you could have purchased a home 4 years ago at a bargain price but did not.

False. We didn't live in San Diego 4 years ago. Because of not knowing where my job would have ended up, I never felt stable enough to buy a home. There were a few times I could've bought right when I moved somewhere, but I would've lost money because of having to pick up and move.

17   anonymous   2017 Jan 2, 5:13pm  

Strategist says

Please pass on this message to your wife:

Dear Mrs. Just Any Guy,

Make hubby buy you your dream home. Everyone deserves one.

All the best

Strategist

You sound like a realtor.

18   Strategist   2017 Jan 2, 5:16pm  

just any guy says

Strategist says

Please pass on this message to your wife:

Dear Mrs. Just Any Guy,

Make hubby buy you your dream home. Everyone deserves one.

All the best

Strategist

You sound like a realtor.

I'm not a realtor.
I do know we are in the middle of a severe shortage of homes. Prices can only go up in that scenario.

19   anonymous   2017 Jan 2, 5:17pm  

Strategist says

I do know we are in the middle of a severe shortage of homes.

True, but that could easily mean we've peaked. This could be the absolute worst time to buy.

20   Strategist   2017 Jan 2, 5:20pm  

just any guy says

Strategist says

I do know we are in the middle of a severe shortage of homes.

True, but that could easily mean we've peaked. This could be the absolute worst time to buy.

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

21   anonymous   2017 Jan 2, 5:22pm  

Strategist says

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

That assumes no job loss recession, which I fear is just around the corner given many factors. We're due for one, but I could easily be wrong. The crystal ball I bought on Amazon isn't working.

22   Strategist   2017 Jan 2, 5:25pm  

just any guy says

Strategist says

Not possible in the middle of a shortage. They have to build like crazy for several years to cure the shortage.

That assumes no job loss recession, which I fear is just around the corner given many factors. We're due for one, but I could easily be wrong. The crystal ball I bought on Amazon isn't working.

No one has a crystal ball. It does not exist. You have to take a long term approach, and do what's right for your family.

23   anonymous   2017 Jan 2, 5:38pm  

Strategist says

No one has a crystal ball. It does not exist. You have to take a long term approach, and do what's right for your family.

I know. The concern I always have is I'm not a doctor or a dentist where I'm more in control of whether I want to move or not, or with what happens to my job. Considering that my company could get sold at some point, I have to think about contingencies if I have to move. Finding work at my level ain't easy in San Diego like it is in the Bay Area or NYC.

So, I'd like to buy when there's at least rental parity in the event I can't sell to break even. However, we're not at rental parity right now. I'd be $800 in the hole every month if I bought a $900K house WITH 20% down. So, performing some analysis helps in determining what plan B or C might be if/when the shit hits the fan.

24   anonymous   2017 Jan 2, 5:49pm  

just any guy says

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

the more important question is "where" you should buy, not when.

what areas are you looking at?

25   _   2017 Jan 2, 5:51pm  

Cost of shelter to your own capacity to own the debt... that is the main thing to look at for a home, not the investment side of the equation

26   anonymous   2017 Jan 2, 6:22pm  

landtof says

just any guy says

Timing can be everything in a place like San Diego or the Bay Area. I know many people, including family, who lost their life savings in the last recession, so you'll have to forgive me if I seem to over-analyze the decision to buy a $900K home.

the more important question is "where" you should buy, not when.

what areas are you looking at?

Poway Unified School District. Northeast San Diego

27   anonymous   2017 Jan 2, 6:37pm  

Logan Mohtashami says

Cost of shelter to your own capacity to own the debt... that is the main thing to look at for a home, not the investment side of the equation

But who wants to buy an overpriced house just because they can afford it? Although this will become my primary residence, I don't want to drastically overpay for it just because I can. As I said above, there are other things to consider if I lose my job and/or have to move away, and the price I pay relative to the rental income it could earn does play a significant factor.

28   anonymous   2017 Jan 2, 7:24pm  

just any guy says

Poway Unified School District. Northeast San Diego

wouldn't say that's a rental hotbed, but good for resale. if you have family, just focus on the best place for them and others who are in the market will think the same when/if you need to sell it.

there are some highlights within that area - some zips are definitely better than others. however, the new developments have insane bond debt and mello roos. not really worth it.

29   anonymous   2017 Jan 2, 7:38pm  

landtof says

just any guy says

Poway Unified School District. Northeast San Diego

wouldn't say that's a rental hotbed, but good for resale. if you have family, just focus on the best place for them and others who are in the market will think the same when/if you need to sell it.

there are some highlights within that area - some zips are definitely better than others. however, the new developments have insane bond debt and mello roos. not really worth it.

Yea, the resale area is great. However, prices have run up to insane levels...for example, houses selling for $900K today sold 5 years ago for $650K. I'm definitely avoiding the areas like 4s Ranch and Carmel Valley where there are new developments with ridiculous HOA and Mello Roos.

30   Dan8267   2017 Jan 2, 9:06pm  

I predict an anal lube shortage as the petting zoo near Call It Crazy is restocked with sheep and goats.

31   _   2017 Jan 3, 4:16pm  

Back from the Trip and I see the Buddies are at it again

Homeowners with the lowest total net worth have the highest share of their net worth stored in their home!

32   anonymous   2017 Jan 3, 4:24pm  

Logan Mohtashami says

Homeowners with the lowest total net worth have the highest share of their net worth stored in their home!

ok?

33   anonymous   2017 Jan 3, 4:28pm  

High net worth individuals have 1/3 - 1/2 of their net worth stored in their home?

Yikes

34   _   2017 Jan 3, 4:33pm  

SubOink says

ok?

Head economist of zillow and Freddie Mac right now.. all three of us are having a live twitter chat on this showing our charts on this

So, to keep it simple

Low down payment borrower, doesn't have the liquid assets to put a big down payment down, probably doesn't have much in a 401K plan or stocks in general, saving rates $$ isn't much.. so there one forced savings is in their home

Chart is August of last year

http://libertystreeteconomics.newyorkfed.org/2016/08/which-households-have-negative-wealth.html

35   Philistine   2017 Jan 3, 5:16pm  

Logan Mohtashami says

saving rates $$ isn't much.. so there one forced savings is in their home

Again: "Ok?"

Nobody would disagree. You're telling us the sky is blue.

Why does it matter?

36   Strategist   2017 Jan 3, 5:18pm  

Logan Mohtashami says

Hey, did they strip search you?

37   Strategist   2017 Jan 3, 6:12pm  

errc says

High net worth individuals have 1/3 - 1/2 of their net worth stored in their home?

Yikes

What do you consider as high net worth?

38   justme   2017 Jan 3, 6:20pm  

Logan Mohtashami says

Chart is August of last year ...... so there [their] one forced savings is in their home

Hah, that chart (post 84) is quite revealing. In the negative wealth terciles (meaning 1/3 in each each group), I observe that the people with the most negative wealth are the same ones that have the most housing "assets".

That fact is quite telling, Mr. Mortgage Broker Logan Mohtashami! Forced savings? More like voluntary non-savings and debt, my friend.

ADDENDUM:

I think I need to explain this. Among people who have negative net worth (personal equity, if you will), the tercile (1/3) that has the most negative net worth is also the same one that own the most expensive/valuable housing assets. While this fact does not imply that it is the houses that is the cause of having negative equity, one observation must be true: Among people with negative equity, the 1/3 subset that has the most negative equity also owns the most expensive housing.

I think this observation is quite telling: The personal mindsets and personal actions that cause negative equity is the same as the ones that cause people to buy the most expensive houses. I find that to be a very interesting observation.

39   justme   2017 Jan 3, 6:30pm  

Debt of a salesman....did anyone coin that phrase before?

40   _   2017 Jan 3, 6:47pm  

Ironman says

-

Now there's a normal looking guy that you should listen to for important financial advice.... NOT...

Which loony bin did he escape from?

Forget that photo, this is the photo from Mexico last August, now how did I get let into the country

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