My local Honda dealership has 7 civics total
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Used Car Market In Turmoil As Prices Collapse And Demand Wanes
- Thread starter GON
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To be fair, you live in an area with some of the most expensive real estate in the country and a ton of wealthy retirees and snowbirds to compete for available properties.
The Pearl is 88% occupied, by the way.
I don't know about that.. friends live near Hendersonville NC...
yeah, I get that... I have no idea on the occupancy, I just know they pay a guy to stand in the street and twirl a sign offering free rent for 2 months.
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I have 4 local dealers, and within 200 miles, there are thousands at discount. South east is where its at. Lots of supply, not enough people.
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Then you should be the first one to know that what goes up must come down.
Suburb of Asheville, NC (wink).
Everything is higher up in that general area. Go a little east to Rutherfordton and the used car prices plummet. Same to the west of Asheville.
Asheville is a popular city now and a lot of people are moving to it, and driving up prices on everything.
A relative of mine just recently moved out of Asheville due to the crime he was seeing.
How many things really go back down? And if so, down to what?
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Will new vehicles sale for 1970 prices again? How much was a brand new car in 1970?
On the surface, it would appear that many prospective buyers couldn't afford a new car this year. In the fall of 1970, the average new car only cost $3,430.
How about housing? 1970: As mortgage rates head higher, becoming a first-time homeowner will get tougher. But current owners have fewer worries. In the 1970s, the median home price rose from $23,000 to $55,700, an average annual gain of 9.9%—and a reminder of the wealth-building potential of homeownership.
Yeah, and minimum wage was $1.45 an hour. So?How many things really go back down? And if so, down to what?
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Will new vehicles sale for 1970 prices again? How much was a brand new car in 1970?
On the surface, it would appear that many prospective buyers couldn't afford a new car this year. In the fall of 1970, the average new car only cost $3,430.
How about housing? 1970: As mortgage rates head higher, becoming a first-time homeowner will get tougher. But current owners have fewer worries. In the 1970s, the median home price rose from $23,000 to $55,700, an average annual gain of 9.9%—and a reminder of the wealth-building potential of homeownership.
Inflation has been steady for the intervening 50+ years, with big spikes in the 1970s, and recently.
Nobody said we are going back to the 1970s, but corrections can, and will, happen in markets. The housing bubble in 2007, for example.
I know, it's a doggy-dog world.
Have you read J.D. Vance's Hillbilly Elegy?
He enlisted in the Marines as an undisciplined young man who had been raised in a chaotic environment.
He set out to buy a costly sports car, but was given a talking to by a concerned NCO, who taught him some basic economics and common sense. He wound up, I think, with an affordable and reliable used Accord.
He did a couple of tours in Afghanistan, did (I think) Law at an Ivy League school (Yale?), and is now a senator.
Obviously he was intelligent, but it took a good NCO to put him on the right track.
SO, then you would have to apply VTEC's "it will all come back down" premise to wages, too. Can't cherry pick one data point or metric and ignore the others.
I rarely agree with VTEC’s economic observations. Correction is one thing. Going back to 1970 prices would follow a collapse.
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What people fail to understand is that there is a difference between "real wages" and expected wages per inflation.
Most of the time, if not all of the time, wages start matching inflation YEARS after it has already happened and removed billions in wealth. For example even now, unless a company is desperate to hire or being pushed by unions, no one is raising wages, but rather making job cuts. Inflation should mean that everything goes up a certain percentage, but that is just not reality, wages numerically stay stagnant.
Here is the data if someone is interested
Average hourly earnings yoy : https://ycharts.com/indicators/us_average_hourly_earnings_yoy
REAL hourly earnings yoy : https://ycharts.com/indicators/us_real_average_hourly_earnings_yoy
As you can see, it just does not correlate to match inflation, not even by a FULL PERCENTAGE POINT.
According to the FED we peaked in median weekly earnings DURING COVID when we were writing unlimited checks to people:
Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over
Graph and download economic data for Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over (LES1252881600Q) from Q1 1979 to Q4 2023 about full-time, salaries, workers, earnings, 16 years +, wages, median, real, employment, and USA.
fred.stlouisfed.org
Eggs for example have gone up 4 or 5 fold, while wages have gone up a few percentage points AT BEST.
Thus, yes, I am not saying that prices will go down to 1970's level, but the correction will match what people can actually afford using their real wage, and not some arbitrary number calculated based on completely manipulated and forged CPI and Inflation numbers.
If there is a house near me right now for 300K it will be 100-150K once the correction happens. Astro, I used to live in VB and bought my first home there for 91K. Sold it for 350K just 8 years later, between 1999 and 2007. You tell me, did wages go up proportionally up to that correction? Blame the correction on Lehman bro's all you want, but it would have happened regardless simply because it would have been unsustainable. Per inflation numbers the house should have been worth ONLY 115K. You know what that house is worth TODAY at peak? 370k. As you can see, there was a massive correction in 08/09 and then it took a whopping 14 years for it to recover, and now, that is actually a realistic price, because we have had not 14 years, but 14 + 8 years for wages to go up and prop up the price of that house. But even then! Per inflation, it should only be worth 170K!!!
Cars will crash, so will houses, and we start this charade all over again. Its just that each and every cycle the peak is HIGHER and 0 is still 0. So the rise and fall (amplitude) is more severe.
The hilarious thing, is that the internet exists, calculators exist, this information is freely available, 99.9% of people CHOSE to live in their made up matrix of everything always being fine, but its just not the case. The circle of life goes round, and now its just the turn of property. No such thing as an everlasting empire and "always up" infinite prosperity (especially in a global economy based on the US literally buying up everything other countries produce).
Likewise, I had to visit my local Honda dealership last week for parts and the only new vehicles on the lot were 5 Ridgelines and 2 CR-Vs. Not a single Accord or Civic to be found.
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Here is my location looking at only accords, CRV's and civics (the rest is either bulky big garbage or tiny econoboxes that take 12 seconds to reach 60, but there are technically 600+ in my area if you look at all vehicles.) I live in the middle of nowhere too.
Prices "coming down" is a misnomer, but reasonable pricing would look (to me) like a straight line from 1970 to 2023, adjusted for the desired 3% rate of inflation. The "Rule of 72" (an approximation, I know) would result in prices doubling every 24 years.
So, the $3500 car in 1970 would have cost $7000 in 1994, and $14,000 in 2019.
But it's hard to compare apples to apples.
That 1970 car would have typically had: a thirsty and polluting carbureted engine, often worn out by100,000 miles; separate lap and shoulder belts up front, and lap belts only in the back; no air bags; skinny bias-ply tires on small steel wheels; at best, a fan blowing air on the rear window instead of a rear defroster grid; no rear stabilizer bar; no intermittent wipers; likely no AC; and an AM radio. Plus, they ran on leaded gas, so the debate was whether to change spark plugs twice a year or every 10,000 miles.
So, new cars are much safer, have many more creature comforts, and are much more economical to run.
So what's that worth? Is a modern car worth twice as much as a 1970 on the basis of the added value?
So let's double that $14,000 to $28,000 - or triple it to $42,000.
All that to say, it's hard to say what new cars should cost.
As long as there is no collusion among manufacturers, then the market will decide. If people are still buying new cars, then I guess they're not priced unreasonably.
GON
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Today's current housing prices are not based on fraud, but based on (1)change in the value of the USD, (2) more demand than housing available, (3) private equity funds as a new, very powerful competitor for single family homes.
If a correction on housing happens it will be because of total collapse of the USD. And if that happens, housing may actually rise, not fall.
Of note, if one holds a currency like the Kuwaiti Dinar, then yes us housing prices will have a significant decrease. But if one is holding USD, then a collapse of the USD will actually cause housing prices to significantly rise
There was no correction to housing begin in 2008. Fraud primarily based on bond brokers were the reason for the rise on housing prices during the period leading up to 2008. When fraud is the reason for the rise, stating the housing market corrected is erroneous.What people fail to understand is that there is a difference between "real wages" and expected wages per inflation.
Most of the time, if not all of the time, wages start matching inflation YEARS after it has already happened and removed billions in wealth. For example even now, unless a company is desperate to hire or being pushed by unions, no one is raising wages, but rather making job cuts. Inflation should mean that everything goes up a certain percentage, but that is just not reality, wages numerically stay stagnant.
Here is the data if someone is interested
Average hourly earnings yoy : https://ycharts.com/indicators/us_average_hourly_earnings_yoy
REAL hourly earnings yoy : https://ycharts.com/indicators/us_real_average_hourly_earnings_yoy
As you can see, it just does not correlate to match inflation, not even by a FULL PERCENTAGE POINT.
According to the FED we peaked in median weekly earnings DURING COVID when we were writing unlimited checks to people:
But this still has not even come close to matching inflation of real goods and services.Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over
Graph and download economic data for Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over (LES1252881600Q) from Q1 1979 to Q4 2023 about full-time, salaries, workers, earnings, 16 years +, wages, median, real, employment, and USA.fred.stlouisfed.org
Eggs for example have gone up 4 or 5 fold, while wages have gone up a few percentage points AT BEST.
Thus, yes, I am not saying that prices will go down to 1970's level, but the correction will match what people can actually afford using their real wage, and not some arbitrary number calculated based on completely manipulated and forged CPI and Inflation numbers.
If there is a house near me right now for 300K it will be 100-150K once the correction happens. Astro, I used to live in VB and bought my first home there for 91K. Sold it for 350K just 8 years later, between 1999 and 2007. You tell me, did wages go up proportionally up to that correction? Blame the correction on Lehman bro's all you want, but it would have happened regardless simply because it would have been unsustainable. Per inflation numbers the house should have been worth ONLY 115K. You know what that house is worth TODAY at peak? 370k. As you can see, there was a massive correction in 08/09 and then it took a whopping 14 years for it to recover, and now, that is actually a realistic price, because we have had not 14 years, but 14 + 8 years for wages to go up and prop up the price of that house. But even then! Per inflation, it should only be worth 170K!!!
Cars will crash, so will houses, and we start this charade all over again. Its just that each and every cycle the peak is HIGHER and 0 is still 0. So the rise and fall (amplitude) is more severe.
The hilarious thing, is that the internet exists, calculators exist, this information is freely available, 99.9% of people CHOSE to live in their made up matrix of everything always being fine, but its just not the case. The circle of life goes round, and now its just the turn of property. No such thing as an everlasting empire and "always up" infinite prosperity (especially in a global economy based on the US literally buying up everything other countries produce).there
Today's current housing prices are not based on fraud, but based on (1)change in the value of the USD, (2) more demand than housing available, (3) private equity funds as a new, very powerful competitor for single family homes.
If a correction on housing happens it will be because of total collapse of the USD. And if that happens, housing may actually rise, not fall.
Of note, if one holds a currency like the Kuwaiti Dinar, then yes us housing prices will have a significant decrease. But if one is holding USD, then a collapse of the USD will actually cause housing prices to significantly rise
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This is funny because its not people buying the cars, but banks. Everything is being bought on credit, and thus, the bubble.
Banks will finance anything they can right now at stupid high interest to rake in every shred of profit, then dump all the repo'd cars on the market and finance that. In the end, they don't lose.
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