In fact I just sold my house in SF Bay Area last month for $500k above listing price, all cash no contingencies. We are now renting in hopes that the market cools down but we are worried that this housing mania won’t stop and we will get priced out of the market. But for 500k above list, I couldn’t say no.
This is pretty much the gist of the article. People are worried about holding cash right now because they think it’s losing value. We’ve got trillions more about to be injected. All assets are priced high because of it.
If you can get a low interest mortgage right now you’re in a good spot.
inflation makes buying stuff on credit more attractive, especially when you can get it with really low interest rates which everyone expect to rise sooner than later
Priced in, in what? Assets prices? That would make for, inst-ainflation, I guess...
In any case, the thing is that cannot be priced into the rates of loans, because the same factor that will contribute to a rising inflation (increasing the monetary mass faster than real economic productivity) makes the loans very cheap by definition.
I for sure would get into all the long term fixed low rate debt I can handle to acquire assets that I think will not depreciate as fast
Only in retrospect, if inflation was unexpected. But if it was unexpected you couldn't have taken advantage of it, because, by definition, you weren't expecting it.
I don't see how the expectation change anything. Either inflation dilute the monetary value of your debt quicker than your asset depreciation or it doesn't.
So, any scenario were you bet (correctly) that inflation will rise at a higher rate than a fixed interest rate is very attractive
List price is meaningless. When I was looking at Bay Area houses plenty of realtor set the listing price intentionally low to drum up interest and a potential bidding war.
It’s like the house that went for $1M over list. Sold at $2.1M, just like the other comps in the neighborhood. The list price was $1M below comp.
