Today's housing market in a nutshell...

[caribbean20]

Fed driven economy, pumping trillions into the money supply causes asset inflation. People using the inflated assets to buy other assets, e.g., real estate. For some reason, the government (not partisan, both sides guilty) believe we can stave off recessions forever. Can’t be done. Floating that bloating government debt will cause interest rates to rise, eventually, who knows when?

As the old saying goes, “recessions are when money returns to its rightful owner’s.” I’m just riding this wave like the rest of you, but have plans in place expecting the worst.

 

[Christopher Lucero]

this turned into a very good thread

 

[LargeOrangeFont]

Maybe we should make it just as hard for foreign actors to buy in our country as it is in Mexico?

Would be a novel concept...

 

[LargeOrangeFont]

this turned into a very good thread

We have this exact conversation weekly.

 

[CSmith]

As mentioned earlier I think people are way more invested in items now then they were in 05 Era. Granted I was still living at home and didn't quite grasp what was going on and the stress my parents went through, but I can tell you this. In the last 6 months. I have sold my house, my truck, my rzr, and my in laws sold there boat. Every single item sold was cash buyers. Where is the cash coming from? Right now in havasu it is cheaper to pay my mortgage than pay rent on anything available. I don't see people walking away from, or getting rid of items if they are taking a loss if they are paid for free and clear.

 

[Your ad here]

As mentioned earlier I think people are way more invested in items now then they were in 05 Era. Granted I was still living at home and didn't quite grasp what was going on and the stress my parents went through, but I can tell you this. In the last 6 months. I have sold my house, my truck, my rzr, and my in laws sold there boat. Every single item sold was cash buyers. Where is the cash coming from? Right now in havasu it is cheaper to pay my mortgage than pay rent on anything available. I don't see people walking away from, or getting rid of items if they are taking a loss if they are paid for free and clear.

Lot of money made in the market over the past year. I made enough to pay cash for a <$20k boat. I'm ahead now than I was in January of 2020 and have a boat. Pretty good for a <$50k/yr. salary.

 

[HotRod82]

The definition of a strong economy is changing, that is the new standard. Everyone is pumping trillions into their economies. If we weren't pumping in trillions we would not be the strongest economy on earth.

This level of deficit spending and QE schemes have not been around long enough to be considered "standards" lol. This is completely uncharted territory. Where are we now? Around 107% debt to GDP last I read?
Yellen believes as long as we are the reserve currency we can borrow and print as much as we like. She better be right eh?

 

[LargeOrangeFont]

This level of deficit spending and QE schemes have not been around long enough to be considered "standards" lol. This is completely uncharted territory. Where are we now? Around 107% debt to GDP last I read?
Yellen believes as long as we are the reserve currency we can borrow and print as much as we like. She better be right eh?

Wars will take place to make sure we are the reserve currency. As long as we have the biggest guns we can print as much money as we want. As long as the US remains the best investment in town, she’s largely right.
I don’t have all the answers, but standard economic theory has been out the window for awhile now.

 

[Big B Hova]

My house is in escrow as we speak..no idea where we're going. Gonna crash at my moms and wait it out till end of year and see if biden fucks it all up

 

[LargeOrangeFont]

My house is in escrow as we speak..no idea where we're going. Gonna crash at my moms and wait it out till end of year and see if biden fucks it all up

He won’t that soon.

 

[Big B Hova]

He won’t that soon.

Fucker can't even walk up stairs

 

[Bobby V]

Fucker can't even walk up stairs

Wait until you get older. I’m 60 and might need to sell my 2 story and buy a 1 story to avoid the stairs..lol

 

[BRONCOBOY]

I am seriously thinking of selling my home in Temecula with 800K in equity and buying a lot at a Rv resort. Just wondering how long to wait this out until it all goes south so I can jump back in. May be a gamble worth taking !

 

[just_floatin]

 

[DrunkenSailor]

I am seriously thinking of selling my home in Temecula with 800K in equity and buying a lot at a Rv resort. Just wondering how long to wait this out until it all goes south so I can jump back in. May be a gamble worth taking !

I'm having the same argument with myself.

 

[GRADS]

I've seen my house go from $185K in 2000 to $475K in 2005 to $200K in 2010 to $650K now...I'm in it for the long haul.

 

[Big B Hova]

Biden threatening to double capital gains tax sent crypto markets into sell off mode last few days. Hopefully same affect on house prices

 

[Christopher Lucero]

I've seen my house go from $185K in 2000 to $475K in 2005 to $200K in 2010 to $650K now...I'm in it for the long haul.

congratulations. that's pretty good return for a house...around 5%. Your policy to stay put is well advised when you are not a RE investor. It seems a self preservation tactic to secure food and shelter first, then to consider speculative investment.
For RE investors, rent DOES provide some pretty attractive returns...especially with complaint well behaved renters, of which I have known many. (Americans are generally good honest people)
but I am conflicted. 5% RE returns are above typical (1-3%) but not very impressive compared to alternatives.
Almost every equity market returns WAY more than that. so as an investment, RE is secure, but illiquid and maintenance intensive and have much higher costs to trade.

standard economic theory

Alright! Are we going to discuss MMT?

 

[farmo83]

If the capital gains increase goes through I predict a rush to rush to real estate. Well see what happens

 

[Christopher Lucero]

I am seriously thinking of selling my home in Temecula with 800K in equity and buying a lot at a Rv resort. Just wondering how long to wait this out until it all goes south so I can jump back in. May be a gamble worth taking !

may be. I have one friend (but only one) who correctly timed the 2008 downturn, sold high and traded up (~2yrs later) at a massive discount. (be careful about capital gains limitations on primary homes) good luck!

<by contrast, I have an ex girlfriend from long ago who had built a RE empire/fortune and she and hubbie were ruined by the 2008 thing, so be darn careful>

 

[Christopher Lucero]

A key indictor to keep an eye on no matter what box you checked on the ballot.
View attachment 994974

contextomy.
6 yr chart below.

 

[LargeOrangeFont]

I am seriously thinking of selling my home in Temecula with 800K in equity and buying a lot at a Rv resort. Just wondering how long to wait this out until it all goes south so I can jump back in. May be a gamble worth taking !

Since people seem to think this is all a repeat of 06, to have timed it perfectly then would have meant selling in 2006 and buying in 2011. That is 5 years in an RV park.

 

[calkid]

Yep, it's the frenzy.
The world is very short on people that actually think things through.
Plant an apple tree.
View attachment 994849

 

[just_floatin]

While home prices continue to soar, selling for a huge profit is not a bad idea. Having said that, where do you park the money to continue to earn equity at the same rate of return. Below is a pretty good article from subject matter experts in the industry for those researching timing the market to sell before a proverbial housing rebalance. I tend to agree with the statement below. When this will occur, no clue. Hindsight is 20/20 and 2500% + growth is not sustainable. That is my opinion.

“Robert Dietz, chief economist at the National Association of Home Builders. “When home prices are growing faster than incomes, ultimately that is an unsustainable trend.”

Is the U.S. housing market heading for a crash? Here’s what the experts say

Searches for the phrase, 'When is the housing market going to crash?' are up 2,450% over the past month.

www.marketwatch.com

 

[LargeOrangeFont]

While home prices continue to soar, selling for a huge profit is not a bad idea. Having said that, where do you park the money to continue to earn equity at the same rate of return. Below is a pretty good article from subject matter experts in the industry for those researching timing the market to sell before a proverbial housing rebalance. I tend to agree with the statement below. When this will occur, no clue. Hindsight is 20/20 and 2500% + growth is not sustainable. That is my opinion.

“Robert Dietz, chief economist at the National Association of Home Builders. “When home prices are growing faster than incomes, ultimately that is an unsustainable trend.”

Is the U.S. housing market heading for a crash? Here’s what the experts say

Searches for the phrase, 'When is the housing market going to crash?' are up 2,450% over the past month.

www.marketwatch.com

From your article -

“We’re not going to see a crash in the housing market, but we are expecting some cooling on the really unsustainable growth rates that we saw, particularly in 2020,”

Also the article states that homes on average are only overvalued by 5.5%.

That not a recipe for a “crash”. What it means is that you will basically be treading water at best by trying to time the market.

If you sell and sit around for 2+ years waiting for the market to drop 10% you just lost money. Unless you parked the money in some other money making investment, that will likely also dip when housing dips.

 

[pronstar]

Record low inventory.
Record low(-ish) interest rates.
Record number of people looking for homes.

Supply and demand is a thing.

This has nothing to do with 2006...or Trump policies LMAO


Sent from my iPhone using Tapatalk Pro

 

[LargeOrangeFont]

Record low inventory.
Record low(-ish) interest rates.
Record number of people looking for homes.

Supply and demand is a thing.

This has nothing to do with 2006...or Trump policies LMAO


Sent from my iPhone using Tapatalk Pro

It's just like 2006!!! Only one of those things was true in 06.

 

[Xtrmwakeboarder]

IMO it won't be like the last crash for a while. There needs to be a trigger where the middle class loses their jobs, not the servers, busboys, cashiers, etc. that don't have houses anyways.

When you have the middle-class living paycheck to paycheck because their mortgages on their over-priced houses wipe out the majority of their income, all it takes is a little push. Banks aren't repoing cars, loans are aplenty, people are scrambling for toys, everything has outpaced income. People as a whole are stupid and don't learn. The real issue is nobody is saving for a rainy day, and there is always one on the horizon.

 

[LargeOrangeFont]

IMO it won't be like the last crash for a while. There needs to be a trigger where the middle class loses their jobs, not the servers, busboys, cashiers, etc. that don't have houses anyways.

When you have the middle-class living paycheck to paycheck because their mortgages on their over-priced houses wipe out the majority of their income, all it takes is a little push. Banks aren't repoing cars, loans are aplenty, people are scrambling for toys, everything has outpaced income. People are a whole are stupid and don't learn. The real issue is nobody is saving for a rainy day, and there is always one on the horizon.

People don't learn because there are 0 consequences for being stupid. And very likely if someone bought in 2018/2019 or before, their mortgage is cheaper than renting a similar house... which is why inventory is low.

People in suburban areas are not moving (low inventories). People in densely populated cities are moving out of them fighting over the low suburban inventories.