Hold onto your butts 03:32 - Jun 12 with 5387 views | Joey_Joe_Joe_Junior | Here comes the correction. Anyone who has been following the markets closely knows that when the Feds turned the tap off things were going to get interesting. I have been very curious about the US housing market thoughoutt the craziness. I think we could be in for another 2008 in some respects. Although the global financial systems are not at as much risk compared to the ridiculousness of the sub prime days, peoples property values certainly are. Not sure if same could be said for the UK but it but starting to already see some similarities, happening faster than many people thought. I wouldn't call it a bubble but it's not been far off. It was far too easy to borrow money in an unstable world. Every man and his dog decided to leave the city in 2020, interest rates went to 0.5% and the sunbelt boomed with work from home workers. I predicted at the time it was unsubstainable. I suspect people championing work from home might be singing a different tune in a few years when they see how replaceable they are but that's another topic. They will be the first to sell their houses when interest rates spike, inflation hits home and the 401k they took out for that downpayment without penalty now has tax due on it. I don't think people will default but I do think a lot will try and get out of their loans quickly. I am sure it as been similar in the UK but houses were not lasting an hour on the market, the basic supply and demand during the pandemic was insane. However, there is really interesting data especially over here right now spells out big trouble. - Home prices are higher relative to income wages than 2007 in many markets - Austin/Phoenix and many other places could see a 40% correction coming - The feds actually purchased $3 trillion in mortgage backed securities during quantitive easing All this combined with inflation huge COL increase means very interesting times ahead. Those who waited it out to buy during covid will be the smart ones. I think people lives during the pandemic were so turned upside down they lost a sense of reality. People seemed convinced they will be able to work in the middle of nowhere forever on New York wages. It just doesn't work like that. Having quite a few friends who lost their jobs and done the 'real estate" thing over the last year they all seem a bit worried. Obviously the US market rather affects the global markets so let's all hope the best I guess. Are we seeing similar patterns in the UK? [Post edited 12 Jun 2022 3:45]
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Hold onto your butts on 05:42 - Jun 12 with 3349 views | WeWereZombies | You don't think that fifty per cent plus increases in the cost of fuel for a car will prolong the attraction of working from home then? Especially when there is a shortage of staff and employers will do whatever is necessary to keep the cost of labour down, people will be looking for an extra few thousand a year in pay if they are expected to come into the office every day. | |
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Hold onto your butts on 07:10 - Jun 12 with 3246 views | solomon |
Hold onto your butts on 05:42 - Jun 12 by WeWereZombies | You don't think that fifty per cent plus increases in the cost of fuel for a car will prolong the attraction of working from home then? Especially when there is a shortage of staff and employers will do whatever is necessary to keep the cost of labour down, people will be looking for an extra few thousand a year in pay if they are expected to come into the office every day. |
And also factoring in environmental targets people will need to be able to get to work without jeopardising that. | | | |
Hold onto your butts on 08:01 - Jun 12 with 3140 views | wrightsrightglove | To me it seems like the big difference between 2008 and the current situation is the level of LTV is very different. I don’t think we’ve seen 90%+ LTV mortgages available to the vast majority of the population during the pandemic compared to the 100% mortgages that were being thrown around pre-2008 and so this should insulate people somewhat and avoid negative equity for most. There will definitely be a levelling out but I can’t see a massive drop and I feel that with the current amount of work vacancies about, people are going to be pretty secure in their jobs. I can see a massive slow down in house prices and probably a 5-10% drop from peak prices a month or two ago but I think most people will be in a decent position to sit tight and ride it out. Certainly people are going to have to tighten their belts with regards to the COL and I would be far far more fearful for those in rentals / those relying on government support than home owners. | | | |
Hold onto your butts on 08:37 - Jun 12 with 3018 views | Simonds92 | We are clearly going in to recession, thats been relatively obvious for a long time. No idea how you think this will impact people working from home. It allows companies to recruit potentially better candidates from across the country, reduces overheads etc. What benefit would working in an office have to the companies? | | | |
Hold onto your butts on 08:39 - Jun 12 with 3006 views | StokieBlue |
Hold onto your butts on 05:42 - Jun 12 by WeWereZombies | You don't think that fifty per cent plus increases in the cost of fuel for a car will prolong the attraction of working from home then? Especially when there is a shortage of staff and employers will do whatever is necessary to keep the cost of labour down, people will be looking for an extra few thousand a year in pay if they are expected to come into the office every day. |
I think his point was more around people being perceived as more replaceable if they WFH. If someone is never in the office then depending on their role and skillset it might be possible to just move that role to a cheaper country or location. Thus far there doesn't seem to be any evidence of that and hopefully it won't be the case but some do see it as a logical extension of full WFH. Obviously doesn't apply to hybrid working which seems the best solution to me and seems to be working very well for many, including myself. SB | |
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Hold onto your butts on 08:55 - Jun 12 with 2951 views | J2BLUE | Haha, you can tell who was doing well before the pandemic playing by the old rules as they are falling over themselves to tell us it can't go on despite the fact it can and quite clearly should. Maybe your line of work is different but many industries have suddenly realised they can have remote workers and everything goes on as normal. Let's ignore the benefits to people's lives, how it's better for the planet and how it made no difference in most industries and let's get everyone back to the office to support the local cafe and so middle managers can lord it over people. | |
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Hold onto your butts on 08:56 - Jun 12 with 2941 views | Guthrum | I thought you were referring to a shortage of gardening water. | |
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Hold onto your butts on 09:01 - Jun 12 with 2905 views | BanksterDebtSlave | "The feds actually purchased $3 trillion in mortgage backed securities during quantitive easing." Not to worry, the public will cover any losses and the banks have the crap off their hands now so we all win. | |
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Hold onto your butts on 09:35 - Jun 12 with 2783 views | fab_lover | I'm not sure one can really compare the US to the UK housing market. The UK is (obv) a fraction of the size of the US. They're not making any more land, there's still an incredible demand. You'd expect London to be the canary in the coal mine, hit with the triple whammy of WFH / Brexit / Russian sanctions, but so far that's not happening, which is somewhat amazing. It's still (beyond all common sense) an "aspiration" location for the rich to have a property. With average house prices an incredible 8.5 times average wages, one wonders how long it can go on, but I said that about the housing market 20 years ago. I think at the lower end of the market - first time properties - demand will never cease. What will change is Generation X, who can't generally afford to retire on the same standards as the Boomers. I'd imagine a lot of Boomer inheritances will skip a generation and be used by Gen X to assist their kids onto the housing ladder, with Gen X much less likely to retire to relatively large properties in the countryside, as they are going to have to work for much longer. | | | |
Hold onto your butts on 10:49 - Jun 12 with 2634 views | PrideOfTheEast |
Hold onto your butts on 08:01 - Jun 12 by wrightsrightglove | To me it seems like the big difference between 2008 and the current situation is the level of LTV is very different. I don’t think we’ve seen 90%+ LTV mortgages available to the vast majority of the population during the pandemic compared to the 100% mortgages that were being thrown around pre-2008 and so this should insulate people somewhat and avoid negative equity for most. There will definitely be a levelling out but I can’t see a massive drop and I feel that with the current amount of work vacancies about, people are going to be pretty secure in their jobs. I can see a massive slow down in house prices and probably a 5-10% drop from peak prices a month or two ago but I think most people will be in a decent position to sit tight and ride it out. Certainly people are going to have to tighten their belts with regards to the COL and I would be far far more fearful for those in rentals / those relying on government support than home owners. |
Aren’t the vast majority on fixed rate mortgage deals here too? That wasn’t the case in 2008 so wonder if that’ll soften the blow to some extent in the short to medium term. Lots of people will have been exiting one mortgage deal for a longer term fix in anticipation presumably, even if that had a short-term penalty. Clearly entering a recession and I’d imagine house prices in the UK will normalise to some extent in some places but I don’t see it in London and most of the South East. Plenty of people who are in the market have probably come out of the pandemic better off and have cash to burn. Debt is also still widely available at good rates. There’s also the massive inheritance that many of those in their thirties/forties now are going to realise in the not too distant future - benefitting from crazy house price increases in the SE in particular. Interesting to watch. I agree that in general home owners will be fine and it’s those trying to rent or relying on social housing that will suffer. | | | |
Hold onto your butts on 10:56 - Jun 12 with 2596 views | DanTheMan |
Hold onto your butts on 09:35 - Jun 12 by fab_lover | I'm not sure one can really compare the US to the UK housing market. The UK is (obv) a fraction of the size of the US. They're not making any more land, there's still an incredible demand. You'd expect London to be the canary in the coal mine, hit with the triple whammy of WFH / Brexit / Russian sanctions, but so far that's not happening, which is somewhat amazing. It's still (beyond all common sense) an "aspiration" location for the rich to have a property. With average house prices an incredible 8.5 times average wages, one wonders how long it can go on, but I said that about the housing market 20 years ago. I think at the lower end of the market - first time properties - demand will never cease. What will change is Generation X, who can't generally afford to retire on the same standards as the Boomers. I'd imagine a lot of Boomer inheritances will skip a generation and be used by Gen X to assist their kids onto the housing ladder, with Gen X much less likely to retire to relatively large properties in the countryside, as they are going to have to work for much longer. |
Something I only learned about the other day with regards to the US housing market is just how crazy some of their zoning laws are. Massive parts of the US are only allowed to build detached housing. No semis, no flats, only detached family housing. And then you end up with these massive suburbs with nothing in them and no local transport. | |
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Hold onto your butts on 11:32 - Jun 12 with 2495 views | Darth_Koont |
Hold onto your butts on 08:55 - Jun 12 by J2BLUE | Haha, you can tell who was doing well before the pandemic playing by the old rules as they are falling over themselves to tell us it can't go on despite the fact it can and quite clearly should. Maybe your line of work is different but many industries have suddenly realised they can have remote workers and everything goes on as normal. Let's ignore the benefits to people's lives, how it's better for the planet and how it made no difference in most industries and let's get everyone back to the office to support the local cafe and so middle managers can lord it over people. |
Indeed. The welcome shift away from centralized, purely office-based work also risks the commercial and residential portfolios people have amassed. Better for people and society vs. better for money and influence? There can only be one winner. This is where the politicians will come in to get people back into the office. The civil service is just the first cohort they can whip back to work. | |
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Hold onto your butts on 15:40 - Jun 12 with 2210 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 08:37 - Jun 12 by Simonds92 | We are clearly going in to recession, thats been relatively obvious for a long time. No idea how you think this will impact people working from home. It allows companies to recruit potentially better candidates from across the country, reduces overheads etc. What benefit would working in an office have to the companies? |
Across the world* Have you seen what’s happening in the tech sector already? It’s slightly different in the US because of how vast the country is but you can’t pay someone the same wage in Tulsa as San Francisco, this isn’t going to end well for many. | | | |
Hold onto your butts on 15:46 - Jun 12 with 2195 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 10:49 - Jun 12 by PrideOfTheEast | Aren’t the vast majority on fixed rate mortgage deals here too? That wasn’t the case in 2008 so wonder if that’ll soften the blow to some extent in the short to medium term. Lots of people will have been exiting one mortgage deal for a longer term fix in anticipation presumably, even if that had a short-term penalty. Clearly entering a recession and I’d imagine house prices in the UK will normalise to some extent in some places but I don’t see it in London and most of the South East. Plenty of people who are in the market have probably come out of the pandemic better off and have cash to burn. Debt is also still widely available at good rates. There’s also the massive inheritance that many of those in their thirties/forties now are going to realise in the not too distant future - benefitting from crazy house price increases in the SE in particular. Interesting to watch. I agree that in general home owners will be fine and it’s those trying to rent or relying on social housing that will suffer. |
Different market but everyone renting here is very much holding on at the moment after seeing what has been happening in the last 3 months. People paid ridiculous money at very low interest rates in 2020/21 with a big under supply. Many will be fine to ride it out but there is a huge correction coming for those who brought recently. The local labor market will start to become important again. https://fortune.com/2022/05/27/housing-market-correction-peak-mark-zandi-moodys- [Post edited 12 Jun 2022 15:53]
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Hold onto your butts on 16:27 - Jun 12 with 2124 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 05:42 - Jun 12 by WeWereZombies | You don't think that fifty per cent plus increases in the cost of fuel for a car will prolong the attraction of working from home then? Especially when there is a shortage of staff and employers will do whatever is necessary to keep the cost of labour down, people will be looking for an extra few thousand a year in pay if they are expected to come into the office every day. |
If your job can be done from anywhere, it can be done from ANYWHERE. | | | |
Hold onto your butts on 16:30 - Jun 12 with 2104 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 08:55 - Jun 12 by J2BLUE | Haha, you can tell who was doing well before the pandemic playing by the old rules as they are falling over themselves to tell us it can't go on despite the fact it can and quite clearly should. Maybe your line of work is different but many industries have suddenly realised they can have remote workers and everything goes on as normal. Let's ignore the benefits to people's lives, how it's better for the planet and how it made no difference in most industries and let's get everyone back to the office to support the local cafe and so middle managers can lord it over people. |
You’ll see. | | | |
Hold onto your butts on 16:31 - Jun 12 with 2090 views | You_Bloo_Right |
Hold onto your butts on 16:27 - Jun 12 by Joey_Joe_Joe_Junior | If your job can be done from anywhere, it can be done from ANYWHERE. |
Which the IT sector in this and other European countries learnt some time ago. | |
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Hold onto your butts on 16:44 - Jun 12 with 2041 views | J2BLUE |
Again, it seems people like you can't argue against the benefits it brings and are arguing purely in your own self interest. Good luck. | |
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Hold onto your butts on 17:03 - Jun 12 with 1981 views | WeWereZombies |
Hold onto your butts on 16:27 - Jun 12 by Joey_Joe_Joe_Junior | If your job can be done from anywhere, it can be done from ANYWHERE. |
But not necessarily by just anyone... | |
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Hold onto your butts on 17:04 - Jun 12 with 1983 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 16:44 - Jun 12 by J2BLUE | Again, it seems people like you can't argue against the benefits it brings and are arguing purely in your own self interest. Good luck. |
I work in hybrid model myself and certainly see the benefits but people that hide behind their laptops all year will have difficulty in the long run, certainly when it comes to a number of aspects, such as career progression. The market and major cities can’t operate with a 100% virtual environment for a number of reasons. Those championing may regret it in 5 years. I will acknowledge that those that live in smaller markets may be less affected in terms of wages etc anyway. [Post edited 12 Jun 2022 17:05]
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Hold onto your butts on 17:14 - Jun 12 with 1948 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 17:03 - Jun 12 by WeWereZombies | But not necessarily by just anyone... |
A lot of companies already sponsor developers etc from India to come over to work in jobs at at slightly lower rates. I guess now they don’t have to worry about visas costs and petitions if that’s the route everyone wants to go. Maybe because I’ve moved around a fair bit for work but the idea of never moving to a new exciting city for a job seems rather boring an uninteresting. Messing with the complexities of the labor/ housing market at the same time. Not exactly helping the local economy either after the last few years. While I completely get everyone has different priorities in life and work life balance is very important, the idea of never being with colleagues and getting into a routine is all bit dull to me. Not to mention the amount of talent that work their way through the ranks because of being recognized in an in person environment. Harder to stand out from behind your screen. We have had interns that are at VP level now. [Post edited 12 Jun 2022 17:15]
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Hold onto your butts on 17:16 - Jun 12 with 1935 views | J2BLUE |
Hold onto your butts on 17:14 - Jun 12 by Joey_Joe_Joe_Junior | A lot of companies already sponsor developers etc from India to come over to work in jobs at at slightly lower rates. I guess now they don’t have to worry about visas costs and petitions if that’s the route everyone wants to go. Maybe because I’ve moved around a fair bit for work but the idea of never moving to a new exciting city for a job seems rather boring an uninteresting. Messing with the complexities of the labor/ housing market at the same time. Not exactly helping the local economy either after the last few years. While I completely get everyone has different priorities in life and work life balance is very important, the idea of never being with colleagues and getting into a routine is all bit dull to me. Not to mention the amount of talent that work their way through the ranks because of being recognized in an in person environment. Harder to stand out from behind your screen. We have had interns that are at VP level now. [Post edited 12 Jun 2022 17:15]
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So it's your personal preference. That is fine. It almost always is when people start it can't go on. | |
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Hold onto your butts on 17:26 - Jun 12 with 1892 views | Joey_Joe_Joe_Junior |
Hold onto your butts on 17:16 - Jun 12 by J2BLUE | So it's your personal preference. That is fine. It almost always is when people start it can't go on. |
I’ve highlighted a lot of other macro factors as well, or did you miss those? I’m all for anyone doing whatever they prefer but I do think people we’ll see some consequences down the road. | | | |
Hold onto your butts on 17:32 - Jun 12 with 1856 views | WeWereZombies |
Hold onto your butts on 17:14 - Jun 12 by Joey_Joe_Joe_Junior | A lot of companies already sponsor developers etc from India to come over to work in jobs at at slightly lower rates. I guess now they don’t have to worry about visas costs and petitions if that’s the route everyone wants to go. Maybe because I’ve moved around a fair bit for work but the idea of never moving to a new exciting city for a job seems rather boring an uninteresting. Messing with the complexities of the labor/ housing market at the same time. Not exactly helping the local economy either after the last few years. While I completely get everyone has different priorities in life and work life balance is very important, the idea of never being with colleagues and getting into a routine is all bit dull to me. Not to mention the amount of talent that work their way through the ranks because of being recognized in an in person environment. Harder to stand out from behind your screen. We have had interns that are at VP level now. [Post edited 12 Jun 2022 17:15]
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But there is also the cubicle environment for many who travel into work, a soulless existence bounded by three demountable partitions with little interaction with colleagues. if you never have much to do with your fellow employees surely you are better off working from home? | |
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