6 Years Later, Do We Still Love This Rooftop Deck? 1647 N. Sedgwick in Old Town

1647 n Sedgwick

This vintage 2-bedroom at 1647 N. Sedgwick in Old Town just came on the market in September 2014.

If it looks familiar to some of you old timers, that’s because it is. We last chattered about it back in the “innocent” times, in June 2008.

See our very interesting prior chatter here.

At the beginning of the summer of 2008, the financial markets had not experienced the collapse of Lehman Brothers or of the stock market.

And the housing market was still pretty “hot.”

Some of you called this unit your “dream” home in 2008.

This top floor unit in a 3-unit vintage building has tall ceilings and original wood moldings along with a wood burning fireplace in the living room.

If you look at the pictures in the 2008 chatter, you can see that the kitchen cabinets have been painted white and there are now quartz counter tops and stainless steel appliances.

I can’t tell exactly what they did in the bathroom but that’s at least a new vanity and lighting.

This unit has two outdoor spaces, a deck off the back and a private rooftop deck with city views.

It has all the other features that buyers look for, including central air, washer/dryer in the unit and rare (at least for Old Town) garage parking.

People who went to the open house for this unit in 2008 reported that it was swarming with people.

The agent at that time posted this comment:

“I was the listing agent for this property. We received 5 offers within the first week, accepted the best. However, the buyer got cold feet and walked. We reactivated the listing on the MLS, but immediately returned to the other 4 offers and accepted one within a few days. The property sold for near the asking price with five offers on the table. It was without a doubt, a fantastic property and it was a joy to represent.”

There was also a spirited discussion in the old chatter about who could afford this $420,000 unit (i.e. who even had a down payment).

Inventory levels in Lincoln Park were discussed – with Steve Heitman actually saying :

“Let’s not forget that 95% financing is still available. My guess is that the credit markets will loosen in the next 6 months.”

Homedelete wagered that this unit would again sell at the 1999 price (which was $300,000).

G said inventory wasn’t dropping due to sales saying:

“This is the typical bubble after-effect where the sellers insist on chasing the market down, thus making it somewhat sticky.”

Ah…memories.

Having sold in a week in a bidding war in 2008, this unit has returned 6 years later priced just $13,000 above the 2008 purchase price, at $425,000.

It’s currently been on the market for 11 days.

30-year fixed mortgage rate when it went under contract in June 2008 = 6.3%

30-year fixed mortgage rate right now = 4.1%

What will happen with this unit this go around?

Gregory Desmond at Berkshire Hathaway KoenigRubloff now has the listing. See the pictures here.

Unit #3: 2 bedrooms, 1 bath, no square footage listed

  • Sold in October 1997 for $252,000
  • Sold in November 1999 for $300,000
  • Sold in July 2008 after a bidding war for $412,000
  • Listed in September 2014 for $425,000
  • Currently still listed for $425,000
  • Assessments now $173 a month (they were $150 a month in 2008)
  • Taxes now $5996 (they were $3916 in 2008)
  • Central Air
  • Washer/Dryer in the unit
  • Garage parking included
  • Bedroom #1: 14×9
  • Bedroom #2: 12×9
  • Private rooftop deck: 27×16

 

 

58 Responses to “6 Years Later, Do We Still Love This Rooftop Deck? 1647 N. Sedgwick in Old Town”

  1. I love seeing properties that we’ve chattered about years ago come back on the market. This one was VERY popular in 2008.

    You’d think that it would be again. Right?

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  2. “Homedelete wagered that this unit would again sell at the 1999 price”

    In real $$ terms, it’s listed right at the ’99 price. So he’s kinda right.

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  3. Bobbo lovin this place hah

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  4. hilarious Steve Heitman quote: “My guess is that the credit markets will loosen in the next 6 months.”

    He’s like Bill Murray in Caddyshack: “I’d keep playing. I don’t think the heavy stuff’s gonna come down for quite a while.”

    http://www.youtube.com/watch?v=8A3M-d_eIqo

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  5. “hilarious Steve Heitman quote: “My guess is that the credit markets will loosen in the next 6 months.””

    It’s funny now- but even in that summer of 2008 not many people were predicting the near complete collapse of the global economy. So I don’t blame Heitman for thinking that credit, which was already as loose as could be at that time, would get even looser. After all, that’s what had been happening for the prior 5 years.

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  6. Great location and sick rooftop deck aside, I still couldn’t get past paying $400k + for a condo with only 1 bathroom.

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  7. looks really dated to me…and not in a good, vintage way. 1 BA is killer. people who buy homes dont want to feel as if they are in a rental.

    not a bad deal at this price but id be surprised at people calling it their “dream home.”

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  8. “1 BA is killer. people who buy homes dont want to feel as if they are in a rental.”

    Apparently no one felt like they were in a rental 6 years ago when there was a bidding war on this unit.

    What has changed?

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  9. 21 days on the market now for this top floor unit. No price reductions yet.

    No bidding wars this time, obviously.

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  10. With mortgage rates over 2% lower than 6 years ago, this unit is actually about $500 a month cheaper than in 2008 if you put down 10%.

    So a mortgage payment around $1850 v. $2350 with a 30-year. That’s cheaper than renting in this neighborhood.

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  11. “With mortgage rates over 2% lower than 6 years ago, this unit is actually about $500 a month cheaper than in 2008 if you put down 10%.”

    Amen. But if housing costs are deflating (like in this instance) or have peaked, why do you think interest rates will soon rise?

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  12. “It’s funny now- but even in that summer of 2008 not many people were predicting the near complete collapse of the global economy.”

    True. But predictions about the future invariably look ridiculous to people in the future looking back at predictions made about the future.

    So, one of us will someday enjoy a good laugh at the other’s expense: I still think 10-year tbonds will touch 1.5% before they touch 3%.

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  13. Mortgage rates for 30 year fixed may go back under 4% again soon. This would probably spur more refinancing activity.

    http://www.cnbc.com/id/102086507

    Thoughts?

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  14. As of Monday for Chicago (before today’s big bond rally) Jumbo 30 years are at 3.75% and FHA’s are at 3.375% Conforming traditional loans are at 4%

    Personally I locked in a 3.375% FHA rate back when ten years were at 1.5%, with the long end of yield curves shrinking you may be able to do better going forward but those with even less than 5% rates can save a bit of money refinancing now.

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  15. “It was without a doubt…a joy to represent.”

    LOL!!! yeah because it sold in a week. Great realtor comment.

    PS Decks where you have to walk up a flight to access them are totally overrated, and underused, esp. in Chicago.

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  16. “Thoughts?”

    Sure. Good news! Imho mortgage rates will decline in the near future. Bad news: the value of hard assets will decline even faster. But don’t listen to me; I’m talking my book.

    “Stock prices have reached what looks like a permanently high plateau.”
    — Irving Fisher, October 1929

    http://en.wikipedia.org/wiki/Irving_Fisher#Stock_market_crash_of_1929

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  17. Hmm. I’d forgotten that 1.5% had already been touched. Since I’m calling for new highs, I’ll raise my bogey and lower my predicted 10-year yield to 1.25

    Paul Kasriel has argued that QE did not lower interest rates, but actually inflated them (along with asset values in general), so the taper implies the opposite: carry trade unwind, strong USD, higher bond prices, lower commodity and equity prices.

    see the last chart in this series:

    http://www.advisorperspectives.com/dshort/updates/Treasury-Yield-Snapshot.php

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  18. “Personally I locked in a 3.375% FHA rate back when ten years were at 1.5%, with the long end of yield curves shrinking you may be able to do better going forward but those with even less than 5% rates can save a bit of money refinancing now.”

    Nearly everyone refinanced who could in 2012. Even all the large banks admit that the refinancing game is over. They’ve laid off thousands of mortgage professionals because the business just isn’t there anymore. Heck, it’s not even there for purchase applications. Wells Fargo purchase apps were down 28% year over year in the third quarter. And they are one of the largest providers of mortgages. Yikes.

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  19. “Paul Kasriel has argued that QE did not lower interest rates.”

    ha! ha! ha! ha! ha! ha! ha! ha!

    I could laugh for DAYS over this statement alone.

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  20. “Mortgage rates for 30 year fixed may go back under 4% again soon. This would probably spur more refinancing activity.”

    They’re already under 4% everywhere. See my other comment about refinances. They won’t pick up unless the rates go under what they went to when they were at a record low in 2012. Everyone who can refinance already did.

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  21. “Bad news: the value of hard assets will decline even faster.”

    But aren’t stock prices supposed to correlate with earnings? And earnings are at all time record highs right now and still growing (at least for now.)

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  22. Who to believe?

    Ten year at 2.04% (Wow!!!!- this is signaling recession)

    OR

    Unemployment for those with college degrees at 2.9%
    CSX had another record quarter yesterday- sees “momentum” and more of the same in 2015
    Peak or near peak housing prices in most major cities
    Plunging gasoline prices- is a tax cut for every American

    Who will be right??? Because someone is going to get it very wrong.

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  23. Wait a minute- the 10-year has just plunged to 1.98%. Panic buying of treasuries.

    Why the panic???

    These are such fascinating times.

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  24. “Ten year at 2.04%”

    I guess we’re not “firmly above 3%” anymore?

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  25. ^lol chuk

    “See my other comment about refinances. They won’t pick up unless the rates go under what they went to when they were at a record low in 2012. Everyone who can refinance already did.”

    thats not true because not everyone times the bottom that well, and also not everyone had as much home equity then as they did now so possibly they could not refinance then.

    2% 10yr rates don’t forcast a recession necessarily, there’s way more to it than that.

    The main thing is that the ECB’s negative interest rate policy is backfiring on them and causing deflation. The dollar is skyrocketing against the euro (which I thought would happen a long time ago) and will continue for a while until they get their shit going again.

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  26. “Plunging gasoline prices- is a tax cut for every American”

    Oil price drop rapidly affects supply right now. $75/bbl oil = massive cut in US production.

    “thats not true because not everyone times the bottom that well, and also not everyone had as much home equity then as they did now so possibly they could not refinance then.”

    True, but–that’s still a much smaller pool. But highly doubtful I’d refi again–3.25% 30 fixed–barring very strange ciurcumstances.

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  27. If you recall, Sabrina used to say that low rates in 2012 didn’t help most people refi, because they were all underwater and couldn’t refi. All of those people should now have much more equity. So, if what Sabrina said was true (and as always, that’s a big if), then there should be a whole new pool of people that can refi now. And if there isn’t, then what she said back in 2012 was wrong.

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  28. “Everyone who can refinance already did.”

    False.

    I did not refinance in 2012 because I couldn’t get an appraisal that wouldn’t have resulted in me writing a 5 figure check at closing to do so. Now property values are up and I am 2 years further into my mortgage so refinancing is an actual option… especially if mortgage rates drop further.

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  29. They are dropping now for sure, give your mtg broker a call next monday and see how low rates are

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  30. A buddy just rate locked a 10 year jumbo at 3.125%.

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  31. Do mortgage rates lag the 10 year yield changes by about 3 days? If so, what will 30 year fixed be on Monday? 3.5%? Anyone who bought in August 2013 at 4.5% will be thinking about refinancing now.

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  32. “Anyone who bought in August 2013 at 4.5% will be thinking about refinancing now.”

    Yes- the small group of people who have bought in the last year will likely try and refinance if they can. We’ll see what happens in the weekly numbers next week.

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  33. “If you recall, Sabrina used to say that low rates in 2012 didn’t help most people refi, because they were all underwater and couldn’t refi.”

    Sorry Chuk. I never said this. I don’t even recall talking about refinancing mortgages ever on this site because I don’t give a damn about it. It doesn’t impact sales other than people who are locked in super low mortgage rates will never move because their housing will be super expensive when rates go up. Heck- when rates went up just 1% a year ago- everyone was priced out.

    I’m really not sure why the homebuilders said today that foot traffic “fell off a cliff” at their housing developments after Labor Day.

    What has changed?

    Rates were coming down a bit even before the panic buying this week. Why is everyone so scared to buy a house suddenly? Why is the housing market dead as a doornail or the day before Christmas? Why is everyone reducing their price suddenly (and in large amounts) when inventories remain low?

    It’s a conundrum. I don’t understand falling sales when housing inventory, and now even rates, are this low.

    The economy is humming along. That’s not it. Jobless claims dropped AGAIN.

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  34. “Plunging gasoline prices- is a tax cut for every American”

    anon(tfo)- I don’t see an argument against what I said. Lower gasoline prices is a massive tax cut for EVERY American. It will show up in airline tickets, in food prices, in clothing prices, in shipments from FedEx, in cash in the wallet and on and on and on. Instead of spending $300 a month to fill up, people will spend $200 and feel SO MUCH BETTER. It’s HUGE. Better than getting rid of the payroll tax.

    And as far as “massive cut in US production” goes- it has to go below $58 a barrel before the shale doesn’t make any sense. It’s nowhere near that level.

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  35. “thats not true because not everyone times the bottom that well, and also not everyone had as much home equity then as they did now so possibly they could not refinance then.”

    The big banks have all said “refinancing is over.” It’s done. Gone. Nada. See ya. They’ve known it for 18 months. That’s why they laid off everyone. The business just isn’t there.

    Sure- there’s some people who will be able to do it. But it’s not a big number and it’s not a big deal.

    Sorry to be the one to tell you the news. Wells Fargo isn’t rubbing its hands together thinking its hit the jackpot.

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  36. “I guess we’re not “firmly above 3%” anymore?”

    Obviously we’re not. I’ll gladly be with the 67 other PhD economists who in January of this year gave, on average, a prediction that the 10-year would be at 3.44% by the end of this year.

    Yes- in “normal” situations- that’s what it would be at.

    But the 10-year is signaling that it’s not normal. Something is very, very wrong. A ten-year at this level (without Fed support- which it is currently withdrawing) would signal recession.

    Right now, however, there are absolutely NO signs of recession in the U.S. economy. It’s the best economy in 15 years. Do bond investors know something the rest of us don’t? Will we be in a recession by next summer?

    If so- no one is buying a house then anyway. Sales will fall even further than they are right now (and they’ve fallen a LOT.) I still don’t get it. Where are all the buyers at these magical rates?

    The Fed cannot figure it out either.

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  37. I also still think the lack of a down payment by the 20 and 30-somethings is what is really hurting.

    It takes a long time to save up $40,000 to $80,000 to buy in the GZ. And there’s no easy way around it unless the Bank of Mommy and Daddy give it to you.

    I still think prices are just too high (even at these low rates) and most buyers are priced out. That’s why we’re seeing all the price cuts across the GZ now. The sellers have to get realistic or they may not be able to sell until next February. Their window is closing quickly. They really only have about 3 or maybe 4 weeks in which to sell before the holiday slowdown is upon us.

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  38. This unit just reduced $6,000 to $419,000.

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  39. “I’ll gladly be with the 67 other PhD economists who in January of this year gave, on average, a prediction that the 10-year would be at 3.44% by the end of this year.”

    In other words: you were wrong. Again.

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  40. “If you recall, Sabrina used to say that low rates in 2012 didn’t help most people refi, because they were all underwater and couldn’t refi.”

    “Sorry Chuk. I never said this.”

    Surely you jest.

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  41. “I also still think the lack of a down payment by the 20 and 30-somethings is what is really hurting.”

    FHA is still around but not every unit qualifies for that, condos are especially difficult to get FHA for since the great recession many people are renting out their units and that is screwing up the rental rate requirement.

    Kids these days have no clue how to save at all though, hell most adults I know that live downtown still don’t. Its hard when your job probably doesn’t pay you what you’re worth, you have to get a grad degree and take out a bunch of student loan debt to make enough money to live in the GZ these days.

    Not to mention they want it ALL and they want it NOW. Going to start calling this the Veruca Salt generation of kids. GET OFF MY LAWN!

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  42. “it has to go below $58 a barrel before the shale doesn’t make any sense.”

    Really? 90%+ of the north american oil shale and tar sands production is profitable at $59 bbl?

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  43. “It takes a long time to save up $40,000 to $80,000 to buy in the GZ. And there’s no easy way around it unless the Bank of Mommy and Daddy give it to you. ”

    That happens a lot more often than you think. You have to understand that GZ of Chicago is one of the premier living/working destinations in the country. There’s A LOT of money here. There’s a lot of money from other places that flows through here. and that affects prices. It’s not an endless stream of income that will make home prices skyrocket (like Hong Kong or manhattan) but it is enough of a buffer that prices in the GZ are $100 to $200 per sq ft higher than the rest of chicagoland. some of that money works its way out to the upper middle class suburbs but even there the PSF is not as high as the GZ. That’s my theory.

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  44. And you know what? there’s nothing wrong with getting money from parents. Noting at all. I learned long ago never to be jealous or envious of what someone else’s parents want to give their children. Good for them. anything to help your child get a leg up in this hyper competitive world.

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  45. Under contract!

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  46. “It takes a long time to save up $40,000 to $80,000 to buy in the GZ. And there’s no easy way around it unless the Bank of Mommy and Daddy give it to you. ”

    Wait a minute! Hold the presses- the government to the rescue AGAIN.

    Soon- you will only need $15,000 to buy your $500,000 2/2 in the GreenZone. Heck, at this rate, you won’t even need the Bank of Mommy and Daddy. They might be able to retire after all. Amazing!

    3% down is back baby. Just in time to make sure “middle class Americans” can get into their dream home. Why should they be deprived simply because they can’t save up a 5% or 10% down payment?

    http://online.wsj.com/articles/fannie-freddie-close-to-agreement-that-could-reduce-lender-penalties-1413561203

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  47. “In other words: you were wrong. Again.”

    Yep- me and all the other learned people in the world were wrong. I was wrong that rates were going to rise this year. I had no idea that the bond market would behave irrationally with the unemployment rate probably finishing the year at around 5.5% and the US economy the hottest in the last 15 years. Who knew that bond investors could be this stupid?

    But then- I guess we should have guessed it. No bull market ends normally. They all end in a spectacular blow off and that’s what’s going to happen to bonds. It’s been in a 30 year bull- soon to end. But when? Clearly it’s not going quietly into the night. Nope. It’s going to have nasty consequences as a result.

    How to protect yourself? Normally when bond yields rise you want to be in stocks. Will that be the play?

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  48. “Yep- me and all the other learned people in the world were wrong.”

    All? Don’t think so…

    The bottom line is, you have been wrong about almost everything since the market crash. You were wrong about new construction. You were wrong about prices rising. You were wrong about rates. You were wrong about rents. You were wrong about “shadow inventory”. It is pretty much the definition of a “bear market genius”.

    Again, there is no crime in being wrong. Just stop pretending you were right.

    “But when?”

    That is the trillion dollar question. Everyone knows that it will end. Timing is EVERYTHING. Knowing something will happen is useless. Knowing when something will happen is everything.

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  49. “You were wrong about new construction.”

    No I wasn’t. I said it would be 10 years until we saw a new construction high rise. It still hasn’t happened yet. Supposedly they’re going to build a new construction high rise in the Gold Coast on State Street (with like 40 luxury units) but I don’t know if they’ve started construction on that yet. That would be the first. I’ll take being off by 3 years and them only building one tower.

    I actually give predictions. I don’t mind being among the best economic minds in this country who also can’t figure it out. We’re all operating in a new environment that has never been experienced in America for 80 years. And with all the Fed distortions ($4.2 trillion! OMG!) there’s going to be impacts that no one could have predicted.

    What do you do Chuk? You’re just an old gas bag who likes to come on here and say “Sabrina- you were wrong.” What are you contributing to the conversation? Absolutely nothing. You don’t even contribute to the discussion about the properties OR market conditions. So why bother?

    Here’s another prediction: Housing prices will be falling over the next 2 years as rates rise but salaries don’t keep up with the difference.

    Thinking about buying that 2/2 for $400k? I hope you’re going to live there a LONG time because in 5 years when you go to sell, the buyer is going to be paying a heck of a lot more for that same property simply because of the rise in rates.

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  50. Here’s another prediction, as the market quadruple dips next year, the government will again start pushing no money down loans but they’ll have them only for first time homebuyers.

    This will be their way of trying to boost the market. They can’t make rates go any lower, so what else can they do? They can rescue millenials from their poor money habits and student loan repayments by allowing them to buy with 100% financing as long as they have good credit. This then puts it on par with renting.

    The Fed is desperate to keep housing elevated. It’s such a big part of the economy. And the Fed doesn’t have anything left in its arsenal.

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  51. “Yep- me and all the other learned people in the world were wrong.”

    “All? Don’t think so…”

    Yes. 67 out of 67 esteemed PhD economists polled in January of this year by Bloomberg said rates would be much higher- with some predicting 4.5%. That’s ALL, Chuk.

    But they go off of what it SHOULD be as the Fed ends its bond buying program and anticipates raising rates in the next 6 months. The economists are as confused as everyone else (but then, just look at the Fed. That’s all economists too and they have NO idea what’s going on.)

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  52. gringozecarioca on October 20th, 2014 at 9:07 am

    “Normally when bond yields rise you want to be in stocks. Will that be the play?”

    I think the play then will be to be short bonds… and 100% of economists agreeing on anything should be a giant red flag… Funny, a profession that professes to understand markets better than anyone, but yet, of their members, a microscopic few who can make any money in the market. So much wisdom unexploited?

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  53. “Soon- you will only need $15,000 to buy your $500,000 2/2 in the GreenZone.”

    Um since it only will apply to conforming loans, not exactly.

    “Who knew that bond investors could be this stupid?”

    I knew, and I’m not even that smart. I’m sure lots of others figured out that the Euro was going to fail too. No coincidence that when they announced negative interest rates (6/5/14), Treasuries started to rally again, then really start to rally once the market corrected and the talk of a china slowdown and deflationary pressure everywhere along with a strong dollar (which is typically what we have when our economy is the best in 15 years), money POURED into treasuries. When massive bull markets happen in interest rates, typically there is a huge bottoming period. We could have low rates like this for decades! Economists are mostly idiots, just like stock analysts, they have a herd mentality. This is coming from someone who has a degree in economics and works with stocks daily. A “consensus” is a great contrarian indicator most of the time.

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  54. “That’s ALL, Chuk.”

    I didn’t realize there were only 67 learned people in the world.

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  55. “a microscopic few who can make any money in the market”

    A phd in Econ is a marker of risk aversion, so it makes sense.

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  56. “I don’t mind being among the best economic minds in this country who also can’t figure it out.”

    Ha.

    “What do you do Chuk? You’re just an old gas bag who likes to come on here and say “Sabrina- you were wrong.” What are you contributing to the conversation? ”

    I have contributed way more than you since late 2011. I told everyone to buy in 2012 when you were telling them not to. You and G and all your “knife catchers” comments. Too funny. I told you everyone was going to be wrong about rates while you were declaring them “firmly above 3%”. I even told you what housing would do this year while you were a chicken little crying that the sky was falling again. I’d much rather get a smaller amount of correct advice than an avalanche of terrible advice.

    “You don’t even contribute to the discussion about the properties OR market conditions. So why bother?”

    I contribute to discussions about market conditions. You just don’t like them because you don’t agree with them. I have nothing to add to individual properties because none of the ones you have been posting for the last year are in my category.

    “Here’s another prediction: Housing prices will be falling over the next 2 years as rates rise but salaries don’t keep up with the difference.”

    Even a broken clock is right twice a day.

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  57. El-Erian’s coming around to my view on rates:

    “Mohamed El-Erian said U.S. 10-year yields “can go to 1.25 percent quite easily if we continue to see this combination of more central bank activism and a slowdown in Europe.” Benchmark Treasury 10-year note yields dropped to 1.44 percent. They earlier fell below the all-time low of 1.379 percent reached on July 25, 2012.”

    http://www.bloomberg.com/news/articles/2016-07-01/u-s-30-year-yield-at-record-low-in-el-erian-s-slower-growth-era

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  58. wish I had that guy’s paycheck and access to capital, looking at my comments I could have made a killing over the last couple years :(

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