Everything is so expensive! (just a vent)

[NYCgrrl]

My husband paid for expedited service for his passport renewal. It's been a month at this point since they've received it and it's "Processing" at this time. What would that 3rd party service do for the extra charge? Is it them doing expedited or something?

Once upon a time 3rd party expedition really was faster. The Passport Agency’s pandemic time frame has changed everything and made the business a mess. Since the PA is listing the status as “Processing” you are still good to receive your husband’s passport within the listed schedule of 4-6 weeks. Used to be I could get my passport renewed in less than a week and gladly paid for the service. Now, forget about it as there is no way I’m paying the government fees for renewal and expedition PLUS the brokers’ fee and still waiting 4 to 6 weeks. In fact I’ll probably just pay for the renewal minus the expedited fee and wait the 10 to 12 weeks.

 

[Mackenzie Click-Mickelson]

Once upon a time 3rd party expedition really was faster. The Passport Agency’s pandemic time frame has changed everything and made the business a mess. Since the PA is listing the status as “Processing” you are still good to receive your husband’s passport within the listed schedule of 4-6 weeks. Used to be I could get my passport renewed in less than a week and gladly paid for the service. Now, forget about it as there is no way I’m paying the government fees for renewal and expedition PLUS the brokers’ fee and still waiting 4 to 6 weeks. In fact I’ll probably just pay for the renewal minus the expedited fee and wait the 10 to 12 weeks.

Ahh okay thanks for that information didn't realize 3rd party sped up the process like that in the past. I agree about waiting at this point. His expires in October and the only reason he wanted expedited is in the off chance we go international soon (which we are trying to see about a beach vacation) he wanted that option. Ordinarily we wouldn't pay it. When I got my passport with my name change in May 2018 it was like 2 1/2 weeks normal service and about the same when I first applied for a passport in February 2013 (with the quoted time I believe 4-6 weeks back then for normal service). No way could you really get that now. My sister-in-law got into a bind because she's supposed to go to Costa Rica in like 2 months but her passport had already expired, we warned her about the long processing times. She was going to do it last year when it was expiring but at that time they were telling people to hold off unless they were actively going somewhere to help the waiting times for those really needing it. Hopefully she receives hers in time, she paid for expeditated but I don't know when she sent it off.

 

[dvcgirl67]

holy crap. I can rent a whole house for less than 1800 here. A nice one.

Yup...everything is nuts, including rents in my area. We have a two story home...also with a nice attic that my husband uses for home office. Still it's about 1,600 sq ft...3 bedroom/2 bath. We could easily get $4,000 a month if we rented it out.

 

[soarin_over_nyc]

Unfortunately the side effect of the stimulus and quantitative easing will be increasing prices.
Nearly every person in the USA got tax free $3,200 stimulus.
Small businesses got 2.5 months of payroll expenses for every employee through the PPP loan.
Every unemployed person got extra $600/week (now $300/week) in compensation.
The FED is keeping interest rates at near zero percent, and printing $120 billion per month out of thin air and lending it to corporations.

 

[jsmith]

Nearly every person in the USA got tax free $3,200 stimulus.
Small businesses got 2.5 months of payroll expenses for every employee through the PPP loan.
Every unemployed person got extra $600/week (now $300/week) in compensation.

No nearly every person did not. Nearly every person in the US with a gross adjusted income under 75K or couples under 150K who filed a tax return in 2019 got tax free stimulus-significantly less than half of every person.
Every unemployed person who filed and kept current their claim got extra compensation. Again less than half of 'every unemployed person'

 

[DisneyJamieCA]

Unfortunately the side effect of the stimulus and quantitative easing will be increasing prices.
Nearly every person in the USA got tax free $3,200 stimulus.
Small businesses got 2.5 months of payroll expenses for every employee through the PPP loan.
Every unemployed person got extra $600/week (now $300/week) in compensation.
The FED is keeping interest rates at near zero percent, and printing $120 billion per month out of thin air and lending it to corporations.

This isn’t true. Not “nearly every person” got the stimulus. Nor did every small business get a PPP loan. It’s also over simplifying it.

 

[dclpluto]

Unfortunately the side effect of the stimulus and quantitative easing will be increasing prices.
Nearly every person in the USA got tax free $3,200 stimulus.
Small businesses got 2.5 months of payroll expenses for every employee through the PPP loan.
Every unemployed person got extra $600/week (now $300/week) in compensation.
The FED is keeping interest rates at near zero percent, and printing $120 billion per month out of thin air and lending it to corporations.

if I was single I wouldn’t of got the full amount of the stimulus. I’m just a factory worker. People I work with didn’t get the full amount. We are just factory workers lots and lots of better jobs around. So no of course it’s not true what you wrote.

 

[MillauFr]

This isn’t true. Not “nearly every person” got the stimulus. Nor did every small business get a PPP loan. It’s also over simplifying it.

Agreed. I didn't get a cent and nor should I.

 

[dvcgirl67]

Unfortunately the side effect of the stimulus and quantitative easing will be increasing prices.
Nearly every person in the USA got tax free $3,200 stimulus.
Small businesses got 2.5 months of payroll expenses for every employee through the PPP loan.
Every unemployed person got extra $600/week (now $300/week) in compensation.
The FED is keeping interest rates at near zero percent, and printing $120 billion per month out of thin air and lending it to corporations.

Well, not every person got $3,200....we didn't, and we shouldn't have gotten it. But yes, the estimate is that Americans have saved somewhere between 1.5 and 2.5 Trillion dollars during pandemic. That money is already flooding back into the economy and will fuel not just the U.S. recovery, but help to fuel the global recovery as well. But these funds aren't the sole reason for rising prices. As we've discussed there have been major supply issues, supply chain dislocations/bottlenecks and employer shortages in certain sectors. The Federal Reserve Chairman said that they believe a lot of these issues will resolve as the economy continues to ramp up and full reopen. He also said that there are some unknowns and that there may be unexpected issues down the road that may need to be addressed. He rightly pointed out that we are living in unprecedented times....the world essentially shut down their economies, and now we're finding out that re-opening comes with quite a few bumps along the way. There's no template for what we're going through.

And while we will see bumps, we're already starting to see some issues begin to iron themselves out. Commodities prices have peaked and have begun to fall. Lumber is down 22% from its peak. Corn was down 14% this week. Now, those headlines won't be as big as the ones from a few weeks ago when those items were peaking...like...."Cost to build a home goes through the roof!!!". Also, the price for used cars also seems to have peaked. If you have a used car to spare, unload it now....because we're not likely to ever see used car prices to go up again in our lifetimes. Unless we're hit by another pandemic...meteor....etc. .

The challenge for the Fed is to not let their foot off the gas too soon...or too quickly. We all know that an unexpected rate hike or even a big taper on the quantitative easing could cause a huge drop in the markets...which they are also trying to avoid. So, lots to watch, and yes, we are going to see some inflation in the short term...next one to two years, but so far it seems like that's all it's going to be. We've grown accustomed to an incredibly low interest rate environment....held there by the Fed since the Great Recession. The Fed is telling us that it's going to stay that low for at least another 18 months. So, I think that all of the talk of spiraling inflation is just manufactured outrage....pumped out by a media machine that retains ratings by riling up their viewers.

 

[Christine]

Agreed. I didn't get a cent and nor should I.

Same here...got nothing and most people I know got nothing. We live in a high COL area. Salaries are high...but so is everything else. Stimulus money rules don't care about what you pay out to live.

 

[Alicefan]

I work for a large-volume home builder and this is a total nightmare. Really just beyond anything anybody could have ever imagined. We've got over 100 houses to be built and delivered between now and August and about 150 more under contract for construction before the end of the year - all of them sold 6 months or more ago at prices that no longer support the input costs. We have taken the unprecedented (and unthinkable) measure of cancelling all conditional sales currently in the works and completely halting any further sales until we can get our feet back under us.

Suppliers are just flat-out breaching contract delivery dates and price quotes or cancelling them altogether and there's literally no other sources to turn to. The gravest situation of all is the desperate shortage of plumbing components (ABS pipe and acrylic tubs and shower bases) resulting from a North American resin shortage caused by the Texas ice storms this spring. We can't build houses without bathrooms and it's literally IMPOSSIBLE to get a delivery day for tubs and showers. We had staff members spend an entire day last week trying to on-line shop for plumbing parts at Lowe's and Home Depot; even acquiring a few retail ones would help but nope - not a single one in the entire city. I have no clue where this insane ride will end.

This is exactly what my contractor friend told me. He said they are quoting prices to build a house and before they can get it built the cost of materials goes up and they have to eat the cost.

 

[snappy]

This is exactly what my contractor friend told me. He said they are quoting prices to build a house and before they can get it built the cost of materials goes up and they have to eat the cost.

This exact scenario played out in south Louisiana after hurricane Katrina and not solely in New Orleans. We were personally impacted by it.

 

[Mackenzie Click-Mickelson]

And our car shopping escapades continue.

We had wanted to look at a Palisade several weeks ago but they had just sold their last one several hours prior. Got a call today that they got one in but we couldn't make it til this afternoon because my husband had a project bid due by noon. Appointment set for 3:30pm. They sent us a video of the car at least to show us the features. We knew they had a few appointments and if no one had bought it we could still look at it and test drive it. Whelp several hours later it's gone, sold, taken off the lot *sigh* This particular car like the Telluride isn't coming into our area in great enough numbers. These cars go from the boat (whenever it actually gets in) to the lot and then sold almost immediately or have been sold before they even get off the boat. I mean we're still not in a hurry for a car but yeah.

At this point if a car we look at is still on the lot days later it makes me not want to buy from that particular dealership lol. Like we got a call from one of the 2 or 3 Mitsubishi dealers that the exact 2022 Outlander we looked at was still available 9 days later...given that no other dealership (and we've looked at enough and enough cars) had this situation makes me wonder if something is up with that particular dealership who is like the only one we've seen have more inventory.

 

[dvcgirl67]

And our car shopping escapades continue.

We had wanted to look at a Palisade several weeks ago but they had just sold their last one several hours prior. Got a call today that they got one in but we couldn't make it til this afternoon because my husband had a project bid due by noon. Appointment set for 3:30pm. They sent us a video of the car at least to show us the features. We knew they had a few appointments and if no one had bought it we could still look at it and test drive it. Whelp several hours later it's gone, sold, taken off the lot *sigh* This particular car like the Telluride isn't coming into our area in great enough numbers. These cars go from the boat (whenever it actually gets in) to the lot and then sold almost immediately or have been sold before they even get off the boat. I mean we're still not in a hurry for a car but yeah.

At this point if a car we look at is still on the lot days later it makes me not want to buy from that particular dealership lol. Like we got a call from one of the 2 or 3 Mitsubishi dealers that the exact 2022 Outlander we looked at was still available 9 days later...given that no other dealership (and we've looked at enough and enough cars) had this situation makes me wonder if something is up with that particular dealership who is like the only one we've seen have more inventory.

The car market really seems like the housing market at this point. Nuts. I was listening to a financial podcast the other day. A caller said that his auto dealer called him and offered to buy back his pick-up truck. I think he said he paid 42K for it a year ago and they offered him 41.5K. And so clearly they believed they'd get much more it than what they originally sold it for, just one year ago.

Anyone who is looking at buying a car or a house right now....if you can wait a bit.....wait. These prices are going to come down. Cars sooner than homes, simply because the supply is easier/faster to rebuild.

The housing market is more complicated because it's going to take time to build as many new units as we need, and so in the short term this buying frenzy will continue. I read an article in the WSJ yesterday about lots of people simply being priced out of this market....many because they can't come up with a 20% downpayment. A realtor was quoted saying that buyers with FHA and VA homes are having a tough time even getting their offers looked at by buyers. Typically those loans are taken out by first-time homebuyers who put less money down. In April, *half* of all existing home sales had 20% down. And a full 25% of all buyers in April paid cash. The realtor also said that 50% of her buyers are getting cash gifts from families for these purchases. So...Mom and Dad are ponying up the dough in a lot of cases.

Another big issue in this high flying housing market, is that prices are rising so fast that appraisals are coming in lower than the final bid. And so in that case, the buyer needs to come up with even more cash to seal the deal. Here's the example given in that article...."For example, a buyer who plans to put 20% down on a $500,000 purchase expects to pay $100,000. But if the home is appraised at $450,000, the cash payment goes up to $140,000—the sum of the $50,000 shortfall plus a $90,000 down payment."

The good news here is that banks are being much tougher in underwriting these loans and so we're not likely to see a crash in the wider economy. In the housing bubble the preceded the Great Recession.....there were way, way too many zero down loans and so when prices started to fall, buyers were immediately underwater....and it just got worse from there. In this case, when prices fall (and they will)....the banks are protected. The buyers will feel the pain, but it sounds like in many cases...it's really Mom and Dad who will ultimately be the ones who lose some cash.

 

[NYCgrrl]

The car market really seems like the housing market at this point. Nuts. I was listening to a financial podcast the other day. A caller said that his auto dealer called him and offered to buy back his pick-up truck. I think he said he paid 42K for it a year ago and they offered him 41.5K. And so clearly they believed they'd get much more it than what they originally sold it for, just one year ago.

Anyone who is looking at buying a car or a house right now....if you can wait a bit.....wait. These prices are going to come down. Cars sooner than homes, simply because the supply is easier/faster to rebuild.

The housing market is more complicated because it's going to take time to build as many new units as we need, and so in the short term this buying frenzy will continue. I read an article in the WSJ yesterday about lots of people simply being priced out of this market....many because they can't come up with a 20% downpayment. A realtor was quoted saying that buyers with FHA and VA homes are having a tough time even getting their offers looked at by buyers. Typically those loans are taken out by first-time homebuyers who put less money down. In April, *half* of all existing home sales had 20% down. And a full 25% of all buyers in April paid cash. The realtor also said that 50% of her buyers are getting cash gifts from families for these purchases. So...Mom and Dad are ponying up the dough in a lot of cases.

Another big issue in this high flying housing market, is that prices are rising so fast that appraisals are coming in lower than the final bid. And so in that case, the buyer needs to come up with even more cash to seal the deal. Here's the example given in that article...."For example, a buyer who plans to put 20% down on a $500,000 purchase expects to pay $100,000. But if the home is appraised at $450,000, the cash payment goes up to $140,000—the sum of the $50,000 shortfall plus a $90,000 down payment."

The good news here is that banks are being much tougher in underwriting these loans and so we're not likely to see a crash in the wider economy. In the housing bubble the preceded the Great Recession.....there were way, way too many zero down loans and so when prices started to fall, buyers were immediately underwater....and it just got worse from there. In this case, when prices fall (and they will)....the banks are protected. The buyers will feel the pain, but it sounds like in many cases...it's really Mom and Dad who will ultimately be the ones who lose some cash.

Depends on your region; real estate prices in NYC are going back up as predicted and expected by many. Interestingly, it’s now cheaper to rent than buy but I expect that to not hold for the long term. IMO, parents who follow the market well will not lose.

 

[dclpluto]

The car market really seems like the housing market at this point. Nuts. I was listening to a financial podcast the other day. A caller said that his auto dealer called him and offered to buy back his pick-up truck. I think he said he paid 42K for it a year ago and they offered him 41.5K. And so clearly they believed they'd get much more it than what they originally sold it for, just one year ago.

Anyone who is looking at buying a car or a house right now....if you can wait a bit.....wait. These prices are going to come down. Cars sooner than homes, simply because the supply is easier/faster to rebuild.

The housing market is more complicated because it's going to take time to build as many new units as we need, and so in the short term this buying frenzy will continue. I read an article in the WSJ yesterday about lots of people simply being priced out of this market....many because they can't come up with a 20% downpayment. A realtor was quoted saying that buyers with FHA and VA homes are having a tough time even getting their offers looked at by buyers. Typically those loans are taken out by first-time homebuyers who put less money down. In April, *half* of all existing home sales had 20% down. And a full 25% of all buyers in April paid cash. The realtor also said that 50% of her buyers are getting cash gifts from families for these purchases. So...Mom and Dad are ponying up the dough in a lot of cases.

Another big issue in this high flying housing market, is that prices are rising so fast that appraisals are coming in lower than the final bid. And so in that case, the buyer needs to come up with even more cash to seal the deal. Here's the example given in that article...."For example, a buyer who plans to put 20% down on a $500,000 purchase expects to pay $100,000. But if the home is appraised at $450,000, the cash payment goes up to $140,000—the sum of the $50,000 shortfall plus a $90,000 down payment."

The good news here is that banks are being much tougher in underwriting these loans and so we're not likely to see a crash in the wider economy. In the housing bubble the preceded the Great Recession.....there were way, way too many zero down loans and so when prices started to fall, buyers were immediately underwater....and it just got worse from there. In this case, when prices fall (and they will)....the banks are protected. The buyers will feel the pain, but it sounds like in many cases...it's really Mom and Dad who will ultimately be the ones who lose some cash.

it’s a good thing that banks wised up. In the past many people couldn’t afford the home loan they got. When I got my home. I had a va loan. I didn’t put down one penny for the loan. I didn’t get a big house. I got one that I knew I could afford. Got it paid off when I was 39. People asked me you got your house paid off so quickly why don’t you upgrade and get a bigger house. Nope I like having a house I can easily afford. Even better since it’s paid off. Another thing I recommend is for people to get a new house. You should have very few expenses while you are paying off your house. The only expense I had while I had a mortgage was a water heater and a water pump. Both not costing much.Did the water heater myself. People should look at the cost of a new home and a older home and make their decision that is best for them.

 

[NYCgrrl]

it’s a good thing that banks wised up. In the past many people couldn’t afford the home loan they got. When I got my home. I had a va loan. I didn’t put down one penny for the loan. I didn’t get a big house. I got one that I knew I could afford. Got it paid off when I was 39. People asked me you got your house paid off so quickly why don’t you upgrade and get a bigger house. Nope I like having a house I can easily afford. Even better since it’s paid off. Another thing I recommend is for people to get a new house. You should have very few expenses while you are paying off your house. The only expense I had while I had a mortgage was a water heater and a water pump. Both not costing much.Did the water heater myself. People should look at the cost of a new home and a older home and make their decision that is best for them.

Good on you to buy a house you can afford! Not sure that buying a new house is the way to go in all marketplaces though. On the east coast older houses are more prevalent and frequently better built than new ones. I’ve purchased new homes as investments but almost always live in pre war homes as I prefer the solidity of older building techniques.

 

[dvcgirl67]

Depends on your region; real estate prices in NYC are going back up as predicted and expected by many. Interestingly, it’s now cheaper to rent than buy but I expect that to not hold for the long term. IMO, parents who follow the market well will not lose.

Yes, I have read that prices have started to rise in NYC again, but I don't think they are seeing the kind of craziness that is being experienced in some other parts of the country where there are dozens of offers within days, many offers over asking...etc. The trend still seems to be to move out of the cities and to the suburbs with more room/green space etc. Of course, that's not to say this trend will hold. As more workers do begin to commute back to the cities they may find that in a post-covid world...the commute is not so great. I guess time will tell.

 

[dvcgirl67]

Good on you to buy a house you can afford! Not sure that buying a new house is the way to go in all marketplaces though. On the east coast older houses are more prevalent and frequently better built than new ones. I’ve purchased new homes as investments but almost always live in pre war homes as I prefer the solidity of older building techniques.

Totally agree! Our first house was a McMansion that we built....it was the largest house we owned at 4,000 sq. ft. It was a nice enough house, but it just had zero character. Thankfully we built it in 2000, and sold it in 2004 for twice what we paid for it....during the housing bubble insanity at that time. That allowed us to pay cash for a house we bought in Orlando...got out of there as prices were beginning to fall, with about 100 grand profit. Bought our existing house in NJ in 2007...when prices were beginning to fall, but had further to go. As a result...it took a long time for the house value to return to what we paid for it. It's the smallest house we've ever owned, but it was built in 1915 and remodeled inside before we bought it. The previous owners left the character....and it's by far our favorite home. Even though the value is now 30-35% over what we paid for it.....it really doesn't matter to us. We have no mortgage and would never pull equity out of it for any reason.

Overall, the house that you live in isn't really a great investment over time. Sure, the value goes up, but the only way to capitalize on that investment wisely is to sell and downsize or move to an area with a lower cost of living. We just think of our house now as a property we can rent out if we decide to move around and rent in our early retirement years. A home's other financial purpose would be to provide capital for us to move to an assisted living facility or senior living environment.....hopefully *way* down the road.

 

[dvcgirl67]

I agree with everything you said, but there is an 800-lb gorilla in the room that nobody is talking about.

Congress is talking about passing another $6 TRILLION "stimulus" bill by using budget reconciliation. That is in addition to the +/- $1 Trillion infrastructure bill they are currently working on. That would almost equal the amounts of all stimulus during the pandemic, and clearly much of the $6T bill is unnecessary. If they pass that, it will cause serious inflation and potentially serious harm to the economy.

I agree that most of the current inflationary pressures will work themselves out, but if Congress passes that monster all bets are off.

Well, that trillion dollar in infrastructure that is currently being negotiated....and it started out as a two trillion dollar infrastructure deal. Even using reconciliation....this latest deal will be under one trillion. And all of this spending literally hinges on roughly two to six individuals....depending on which way the wind is blowing. And don't forget...the last congress added 8 trillion to the national debt, four of that before Covid, through reconciliation....and that was never getting paid for through an increase in GDP...and therefore revenue. GDP never got north of 2.9% pre-pandemic. That money went to massive corporate tax cuts....very little went to the average American. We had "historic" GDP growth in 2020....but that tends to happen when you shut everything down....and then open it back up .

But I won't argue over throwing money into an economy that has seriously supply issues and seemingly loads of cheap money sloshing around already. I've seen that movie before...didn't end well. From everything I'm reading, the Fed isn't quite convinced that we're good to go on the growth side of things, thus continuing their 120 Billion a month spending spree. I suspect that the rest of that 6 trillion in planned spending would be half of that if they were extremely lucky. And even then, it will hinge greatly on whether the inflation we're seeing now is transitory, or if it does really impact the average American's bottom line beyond say, six months to a year from now...which is just when the mid-terms will be heating up. As not only the Fed Chair said....but also several other members.....they truly don't know where the economy will be two years from now. We're all a part of this grand global experiment of opening up the world after mostly shutting it down for some period of time. I can't help but think of that great quote from Samuel L. Jackson in Jurassic Park...."Hold onto your butts".... .