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Prices back down to earth

shovelhd

Autocross Champion
Location
Western MA
The majority of the rate hikes are over with smaller adjustments possible, from what I’ve heard. I’m not an economist so take it with a grain of salt.
I couldn't disagree more. There will be at least 3-4 significant Fed rate hikes in the next year, at least 50 basis points each, and that may not be enough to turn this inflation spiral around and get it back to the pre-pandemic 2% target in a reasonable amount of time. The last time we went through this, 30 year fixed mortgage rates were at 17%, making the Fed rate around 15%. We are nowhere near that now. With higher rates comes decreased demand that drives pricing down. Most people here are smart enough not to leverage the shit out of themselves to buy a car, but I can't say the same for the rest of America. They don't think cost, they think payments.

The market for everything except essentials is definitely softening. Vehicles that are not in high demand like GTI's, for sure. I haven't seen any real price drops for in demand vehicles like Mercedes Sprinter vans, for example.
 

Daks

Autocross Champion
Location
Toronto
Car(s)
GTI PP
I couldn't disagree more. There will be at least 3-4 significant Fed rate hikes in the next year, at least 50 basis points each, and that may not be enough to turn this inflation spiral around and get it back to the pre-pandemic 2% target in a reasonable amount of time. The last time we went through this, 30 year fixed mortgage rates were at 17%, making the Fed rate around 15%. We are nowhere near that now. With higher rates comes decreased demand that drives pricing down. Most people here are smart enough not to leverage the shit out of themselves to buy a car, but I can't say the same for the rest of America. They don't think cost, they think payments.

The market for everything except essentials is definitely softening. Vehicles that are not in high demand like GTI's, for sure. I haven't seen any real price drops for in demand vehicles like Mercedes Sprinter vans, for example.
Can't really compare the present to the past though. House prices are 3X+ to what they used to be. The rate will not be 15%. 4.5-5.5%, yes. This is going to end quicker than most think (just my view). People are already running out of money - pockets tighten - we're out of this by EOY 2023. 2023 will be rough for a lot of people.
 

Superfreak

Drag Racing Champion
Location
Denver
Car(s)
'15 R, '05 Taco,
I couldn't disagree more. There will be at least 3-4 significant Fed rate hikes in the next year, at least 50 basis points each, and that may not be enough to turn this inflation spiral around and get it back to the pre-pandemic 2% target in a reasonable amount of time. The last time we went through this, 30 year fixed mortgage rates were at 17%, making the Fed rate around 15%. We are nowhere near that now. With higher rates comes decreased demand that drives pricing down. Most people here are smart enough not to leverage the shit out of themselves to buy a car, but I can't say the same for the rest of America. They don't think cost, they think payments.

The market for everything except essentials is definitely softening. Vehicles that are not in high demand like GTI's, for sure. I haven't seen any real price drops for in demand vehicles like Mercedes Sprinter vans, for example.
Sure, Sir you sound like you know what you’re talking about. I do hope that we have learned from our past and that the interest rates don’t go sky high. I think we’ve been taught to think in terms of terms of payments, for obvious reasons.

Regarding the car market, yeah I see Golf prices are getting to be more normal, but other cars are very much in demand and I think we’ll see that corrected if we can ever get out of this supply chain situation. Hopefully not more than a year but again, I’m no economist. Thanks for the insight.
 

okMK

Autocross Champion
Location
Alabama
Car(s)
GTI
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MonkeyMD

Autocross Champion
I fully agree, at least not any time soon, if at all. My point was just that a 2017 Sport with 90k miles for $17k is not showing the market is softening lol.

Just feel like people were trying to sell similar cars, maybe with 50k miles for $27k just a few months ago.
 

mrmattolsen

Autocross Champion
Location
Jacksonville, FL
Car(s)
2015 GTI DSG
back in 1938 I paid $12 for a house 😤
 

DrFunkalupicus

Autocross Champion
Location
Topeka
Car(s)
2016 VW GTI S
I feel like I got kind of lucky when I snagged my GTI. In Aug 2020 w/ 31,000 miles, I picked it up for $16,500. Shortly thereafter, the prices shot through the roof.
 

Acadia18

Autocross Champion
Location
Rhode Island
Car(s)
2017 VW Golf R

Very interesting info, especially the last couple of minutes.

Once a month, I sit in a 2hr meeting at work, a forum about consumer credit. And we have a half an hour "economic update" presentation from someone from Moody's Analytics, which is one of the largest financial analysis companies in the country.

I can safely tell you that anybody who trys to predict what will happen is pulling shit out of their ass. You know that scene in South Park where they use a headless chicken to make decisions for the world economy? It's scary how accurate that is.
 
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