Are we going to face another financial crisis?

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The dip in home builder's stock is probably more of a re-positioning than a sign of doom and gloom. Not to say that caution shouldn't be exercised but rather careful what you consider the indications.The big boys gobbled up lots of property on the cheap over the last couple years and some of those assets are being let go. Some contracts are being abandoned and obviously that creates some fines and losses. That said, the general approach was stick a toe in many markets and see which one pops off then run with it. So, to some degree it seems like they are shedding those markets where they don't see good growth over the long term. On the flip side, those markets where they did do well have started to slow and so the impact of those lower cost market entries on their margins is wearing or has worn off. I say "slow" but really I mean, the fire sale inventory is used or mostly used. So they are returning, in those markets, to a pre-crisis land price which brings downward margins. Obviously weather patterns play into the game the big boy builders play to as well. I don't dissect their portfolios but with some of the recent extreme weather, turning attention to those markets that have had those types of events, which also means tapping into insurance claims to re-build, is a way to deploy product that has a higher rate of absorption. So do you want to play the urban sprawl game or go build where a couple thousand homeowners were displaced? Probably the latter. The other influencing agent somewhere in the background is the rate hike. While the impact of the hike was not all that loud, there is one there and it will be a slow grind on consumption of product as borrowing costs start to inch up. Is there a downward trajectory? Hard to say just yet going into one of the slowest parts of the year. It is probably more flat than a decline per se. Certainly keep an eye on it but I don't think it signifies bad things to come in the near term necessarily.

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Just my two cents but when the RE market is extremely competitive and multi offer situations are the normal... it is time to sit it out. Wait until those folks go to foreclosure and scoop them up. If you are buying right and limit your variables you will weather any market, limit your leverage, be careful of financing with variable interest, and ensure you have a 10/20% cushion built into your monthly cash flow on a rental investment. Long term RE investors have the safest money in the investment arena IMO. Good luck to those of you who are in the stock market gambling game...

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I also follow the financial markets. Stock market does look very weak right now and a down turn seems likely. I think this is mostly a function of stock valuations peaking. There are so many "unicorns" out there right now and PE values are historically high. Given that we are entering into a period of global macro economic uncertainty and tightening monetary policy here in the states, its no surprise stocks are declining. Reflecting the stock market, the valuations in the RE market in SF have also began to become unjustifiable to some. Perhaps RE in our market will follow stocks or they will show more resilience (which in my opinion it will). Some RE asset classes will be hit harder than others (im thinking luxury condo units primarily).If there is one think I've learnt is that there is no predicting. Only continuous evaluation. We have to wait and see the evolution of this market from a micro AND macro perspective. There are so many cascading effects to consider,.There is so much more to talk about this topic that it is hard to convey through typing. I really enjoy economics could talk about this stuff for days.

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I don't know if anyone is from Dallas in here but our RE market is unbelievable right now with houses selling in 1-2 days and for 10-30k more than asking. It is definitely a seller's market. I've been looking to invest in Dallas but the more I look into it the more I see a mini bubble of supply and demand. There are so many companies moving and building in north Dallas that it's caused a huge increase in demand but not enough supply. We recently bought a house in Frisco (north of Dallas) that was on the market for almost 50k more than it really was. We got someone out there to really access it and value it and they dropped the price by 50k because the couldn't argue with the accessor on why they posted it so high. We got lucky on that one. It's insanely competitive down here. I'm also invested in the stock market and agree that I feel something is in the back lurking and might not be good. Only time will tell and I agree that constant evaluation of the markets is necessary to stay on top.I hope everyone on here has a savings fund ready to load up on RE and stocks if we hit another low :)

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2016 has been the worse start in the HISTORY of the stock market. Something is brewing behind the scenes. I have spoken to a few realtors and they have agreed that we are in a "mini" bubble. Property values in Miami have risen to 2008 levels. They are unsustainable. A no frills 3/2, 2000 sq ft SFH sells for $300,000 plus, but wages have not kept up with the cost of housing. I have contacts in L.A, San Fran, Dallas, Atlanta, NC and Orlando and they are shocked at how expensive real estate has gotten. The big money in the real estate market was made if bought in 2012 and held. Right now, a 10% profit on a flip is average. I believe that we are going to see another wave of foreclosures and short sales in the next year or two. I love buying when things are on sale. Gold and oil are going to make a lot of people rich in 2-3 years. Be ready to load the boat on the next real estate sell off!

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There are always TOPS and Bottoms and Middles in the financial cycles. It's been that way for 150 years. The key is to establish and adhere to financially sound fundamentals that will see you through an portion of the cycles as they move. Nothing new here.

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A change in the market direction would be refreshing. I think the Miami market will lag the stock market and (hopefully) we will see the signs with time to make moves. I'm holding shorts on sp500, lets see how the rest of the year plays out. It will be an exciting ride !

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Amen Brother. I'm not knocking investing in R.E. I will buy any property that is priced right. The problem is that the pickings are few in between. I would love to buy homes 10-20% less then they are now. Btw, the DOW Futures are down over 250 points. Looks like the market may have another sell off Monday.

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It's coming, we all know that. When is the question! Hopefully we learned enough from 2008 to not be stuck high and dry again. I'm working on learning ways to make extra cash for when housing drops off. I think it will be severe within 5 years. Been literally gambling with stocks that I learned from myinvestco.com

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I know pickings are very slim in Atlanta