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Updated almost 2 years ago, 01/14/2023
Housing crash deniers ???
Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions.
However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.
Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct.
#1 Market Trends & Data Contributor
The trouble in the world is always there but that's not the root cause of today's world problems.
Today's world problem is just because the Dollar is reaching a new high every day.
Every other country and institution started to collapse.
The rest that you described is not really relevant at this Dollar thing.
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
At what percentage drop is it not considered an "adjustment"??? 20% over 18 months still an adjustment? 50% over 2 years? I don't think anyone will care about the semantics of it when housing drops 20-30%
I think James keeps saying there's no crash because his market is really doing well, all recently sold houses are still reaching an all-time high, I checked the latest house sold in Zillow from 3550 Fremont Ave S, Minneapolis, MN 55408 to 5726 Bryant Ave S they all have good price and no price adjustment.
Since nobody is really buying "national" home price is argument is making sense as well.
The next test would be Dec this year, is the market going to have 'full market crash' or continue 'partial price adjustment' like today ??
50% over 2 years is not a "crash". Yes, it's a lot of change, still, it's not a crash.
Think of it in terms of a automobile, what is a "crash"? It's a sudden, massive change, generally from unforeseen factors. A deer runs out, "holly-hell", you hit the brakes, "POW" the car is massively changed, to the lessor, in the blink of an eye. We call that a "crash".
The term "crash" is exactly that, a massive change in a sudden event. The word is what the word is, again, nobody get's to reassign the English language.
A 50% change in home prices over 2 years is generally a market re-pricing. And let's be honest, any notion of such actually happening is ridiculous to say the least, because were talking a change to material and labor costs that have very literally never happened in the entire history of the U.S.. Feel free to dig into the data and find me a time that median wages went backwards 50%.
A market Adjustment is, generally speaking, pricing adjustments in the range of up to 10%. These occur over a duration of time, measured in months. As I have said countless times, there WILL BE market specific adjustments in greater and lessor deviations. SF bay is a great example, that place is primed for a much larger deviation in changes BUT ALSO look at there run-up as well, it was equally much more. AND as I have noted, the difference from replacement cost has the largest cap when we remove land factor, keeping replacement on the structure itself, thus being able to view the value factor of the land alone.
Land is where the greatest adjustments will be seen, not in structures.
So, in markets where overall sales values are closer aligned to the utilitarian factor of replacement cost of unit, such as Ohio, of an Iowa for example, lessor adjustments will come. You take your CA homes, where we see some of the biggest gaps in this factor nationally speaking, yup, expect the bigger deviations.
Also, watch for "insulated" markets to be, well, "insulated". For example certain neighborhoods in D.C., investors in those areas will know exactly what I am speaking about here.
The midwest is famous in intuitional investing circles as "good ole reliable" and I don't see any change to this standing. Pricing generally more closely follows the utilitarian cost points vs perceptual thus, muting such big swings.
Again..... again, again, again...... The conversation is one of MARKET WIDE, as in NATIONAL Real Estate market "crash". So I speak specifically to a National median/average etc.. and On that National line, no, NO 20%+ "crash" of Real Estate. I don't know how I can get more clear and defined. Yes, 100%, there will be market specific variances, there always is. yes, some village in Alaska might rocket 90%, some area in L.A. could drop 90%, again for the countless times these are market specific variances, we are talking a NATIONAL number/%.
I for long time have been calling out CA as having a significant time of pain soon coming. The net outflow of persons from CA is substantial, it is. And stage is set for major infrastructure issue that could really spur an even more rapid exodus. That outflow could spur a net unit glut of properties and THAT, a unit GLUT, that is a key necessity to get rapidly descending R.E. prices because it facilitates prices going SUB replacement cost value.
It's really hard, I dare say impossible, to get a collapse/crash of real estate when there is not enough real estate. If Johnny has 10 apples, and 20 people want apples, how low will the price of Johnnys apples go? Yeah, kind of elementary. And guess what, just because 10 of the 20 can't afford what Johnny is charging, it does not matter because Johnny only has 10 apples, he only cares what 10 can pay. Johnny doe snot need 20 buyers, just 10.
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
At what percentage drop is it not considered an "adjustment"??? 20% over 18 months still an adjustment? 50% over 2 years? I don't think anyone will care about the semantics of it when housing drops 20-30%
I think James keeps saying there's no crash because his market is really doing well, all recently sold houses are still reaching an all-time high, I checked the latest house sold in Zillow from 3550 Fremont Ave S, Minneapolis, MN 55408 to 5726 Bryant Ave S they all have good price and no price adjustment.
Since nobody is really buying "national" home price is argument is making sense as well.
The next test would be Dec this year, is the market going to have 'full market crash' or continue 'partial price adjustment' like today ??
50% over 2 years is not a "crash". Yes, it's a lot of change, still, it's not a crash.
Think of it in terms of a automobile, what is a "crash"? It's a sudden, massive change, generally from unforeseen factors. A deer runs out, "holly-hell", you hit the brakes, "POW" the car is massively changed, to the lessor, in the blink of an eye. We call that a "crash".
The term "crash" is exactly that, a massive change in a sudden event. The word is what the word is, again, nobody get's to reassign the English language.
A 50% change in home prices over 2 years is generally a market re-pricing. And let's be honest, any notion of such actually happening is ridiculous to say the least, because were talking a change to material and labor costs that have very literally never happened in the entire history of the U.S.. Feel free to dig into the data and find me a time that median wages went backwards 50%.
A market Adjustment is, generally speaking, pricing adjustments in the range of up to 10%. These occur over a duration of time, measured in months. As I have said countless times, there WILL BE market specific adjustments in greater and lessor deviations. SF bay is a great example, that place is primed for a much larger deviation in changes BUT ALSO look at there run-up as well, it was equally much more. AND as I have noted, the difference from replacement cost has the largest cap when we remove land factor, keeping replacement on the structure itself, thus being able to view the value factor of the land alone.
Land is where the greatest adjustments will be seen, not in structures.
So, in markets where overall sales values are closer aligned to the utilitarian factor of replacement cost of unit, such as Ohio, of an Iowa for example, lessor adjustments will come. You take your CA homes, where we see some of the biggest gaps in this factor nationally speaking, yup, expect the bigger deviations.
Also, watch for "insulated" markets to be, well, "insulated". For example certain neighborhoods in D.C., investors in those areas will know exactly what I am speaking about here.
The midwest is famous in intuitional investing circles as "good ole reliable" and I don't see any change to this standing. Pricing generally more closely follows the utilitarian cost points vs perceptual thus, muting such big swings.
Again..... again, again, again...... The conversation is one of MARKET WIDE, as in NATIONAL Real Estate market "crash". So I speak specifically to a National median/average etc.. and On that National line, no, NO 20%+ "crash" of Real Estate. I don't know how I can get more clear and defined. Yes, 100%, there will be market specific variances, there always is. yes, some village in Alaska might rocket 90%, some area in L.A. could drop 90%, again for the countless times these are market specific variances, we are talking a NATIONAL number/%.
I for long time have been calling out CA as having a significant time of pain soon coming. The net outflow of persons from CA is substantial, it is. And stage is set for major infrastructure issue that could really spur an even more rapid exodus. That outflow could spur a net unit glut of properties and THAT, a unit GLUT, that is a key necessity to get rapidly descending R.E. prices because it facilitates prices going SUB replacement cost value.
It's really hard, I dare say impossible, to get a collapse/crash of real estate when there is not enough real estate. If Johnny has 10 apples, and 20 people want apples, how low will the price of Johnnys apples go? Yeah, kind of elementary. And guess what, just because 10 of the 20 can't afford what Johnny is charging, it does not matter because Johnny only has 10 apples, he only cares what 10 can pay. Johnny doe snot need 20 buyers, just 10.
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
At what percentage drop is it not considered an "adjustment"??? 20% over 18 months still an adjustment? 50% over 2 years? I don't think anyone will care about the semantics of it when housing drops 20-30%
I think James keeps saying there's no crash because his market is really doing well, all recently sold houses are still reaching an all-time high, I checked the latest house sold in Zillow from 3550 Fremont Ave S, Minneapolis, MN 55408 to 5726 Bryant Ave S they all have good price and no price adjustment.
Since nobody is really buying "national" home price is argument is making sense as well.
The next test would be Dec this year, is the market going to have 'full market crash' or continue 'partial price adjustment' like today ??
50% over 2 years is not a "crash". Yes, it's a lot of change, still, it's not a crash.
Think of it in terms of a automobile, what is a "crash"? It's a sudden, massive change, generally from unforeseen factors. A deer runs out, "holly-hell", you hit the brakes, "POW" the car is massively changed, to the lessor, in the blink of an eye. We call that a "crash".
The term "crash" is exactly that, a massive change in a sudden event. The word is what the word is, again, nobody get's to reassign the English language.
A 50% change in home prices over 2 years is generally a market re-pricing. And let's be honest, any notion of such actually happening is ridiculous to say the least, because were talking a change to material and labor costs that have very literally never happened in the entire history of the U.S.. Feel free to dig into the data and find me a time that median wages went backwards 50%.
A market Adjustment is, generally speaking, pricing adjustments in the range of up to 10%. These occur over a duration of time, measured in months. As I have said countless times, there WILL BE market specific adjustments in greater and lessor deviations. SF bay is a great example, that place is primed for a much larger deviation in changes BUT ALSO look at there run-up as well, it was equally much more. AND as I have noted, the difference from replacement cost has the largest cap when we remove land factor, keeping replacement on the structure itself, thus being able to view the value factor of the land alone.
Land is where the greatest adjustments will be seen, not in structures.
So, in markets where overall sales values are closer aligned to the utilitarian factor of replacement cost of unit, such as Ohio, of an Iowa for example, lessor adjustments will come. You take your CA homes, where we see some of the biggest gaps in this factor nationally speaking, yup, expect the bigger deviations.
Also, watch for "insulated" markets to be, well, "insulated". For example certain neighborhoods in D.C., investors in those areas will know exactly what I am speaking about here.
The midwest is famous in intuitional investing circles as "good ole reliable" and I don't see any change to this standing. Pricing generally more closely follows the utilitarian cost points vs perceptual thus, muting such big swings.
Again..... again, again, again...... The conversation is one of MARKET WIDE, as in NATIONAL Real Estate market "crash". So I speak specifically to a National median/average etc.. and On that National line, no, NO 20%+ "crash" of Real Estate. I don't know how I can get more clear and defined. Yes, 100%, there will be market specific variances, there always is. yes, some village in Alaska might rocket 90%, some area in L.A. could drop 90%, again for the countless times these are market specific variances, we are talking a NATIONAL number/%.
I for long time have been calling out CA as having a significant time of pain soon coming. The net outflow of persons from CA is substantial, it is. And stage is set for major infrastructure issue that could really spur an even more rapid exodus. That outflow could spur a net unit glut of properties and THAT, a unit GLUT, that is a key necessity to get rapidly descending R.E. prices because it facilitates prices going SUB replacement cost value.
It's really hard, I dare say impossible, to get a collapse/crash of real estate when there is not enough real estate. If Johnny has 10 apples, and 20 people want apples, how low will the price of Johnnys apples go? Yeah, kind of elementary. And guess what, just because 10 of the 20 can't afford what Johnny is charging, it does not matter because Johnny only has 10 apples, he only cares what 10 can pay. Johnny doe snot need 20 buyers, just 10.
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
It’s a little different now though. People back then had teaser rates that adjusted them to a higher mortgage payment that they couldn’t afford. Folks now have the fixed low payment, they can “afford” to lose 20-30 percent in home value. Sure they may not like being negative equity, but they still need a place to live and payment is all that matters. Highly leveraged investors though, will be impacted.
#1 Market Trends & Data Contributor
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
Today the Fed chairman stating if they keep the rate high, inflation would be 2% by end of 2023. That's their theory.
We really don't know what would happen since this is happening for the first time in history.
There're just too many unknown unlike 2008 which is specific to real estate only, this time it's way bigger than just local real estate.
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
At what percentage drop is it not considered an "adjustment"??? 20% over 18 months still an adjustment? 50% over 2 years? I don't think anyone will care about the semantics of it when housing drops 20-30%
I think James keeps saying there's no crash because his market is really doing well, all recently sold houses are still reaching an all-time high, I checked the latest house sold in Zillow from 3550 Fremont Ave S, Minneapolis, MN 55408 to 5726 Bryant Ave S they all have good price and no price adjustment.
Since nobody is really buying "national" home price is argument is making sense as well.
The next test would be Dec this year, is the market going to have 'full market crash' or continue 'partial price adjustment' like today ??
50% over 2 years is not a "crash". Yes, it's a lot of change, still, it's not a crash.
Think of it in terms of a automobile, what is a "crash"? It's a sudden, massive change, generally from unforeseen factors. A deer runs out, "holly-hell", you hit the brakes, "POW" the car is massively changed, to the lessor, in the blink of an eye. We call that a "crash".
The term "crash" is exactly that, a massive change in a sudden event. The word is what the word is, again, nobody get's to reassign the English language.
A 50% change in home prices over 2 years is generally a market re-pricing. And let's be honest, any notion of such actually happening is ridiculous to say the least, because were talking a change to material and labor costs that have very literally never happened in the entire history of the U.S.. Feel free to dig into the data and find me a time that median wages went backwards 50%.
A market Adjustment is, generally speaking, pricing adjustments in the range of up to 10%. These occur over a duration of time, measured in months. As I have said countless times, there WILL BE market specific adjustments in greater and lessor deviations. SF bay is a great example, that place is primed for a much larger deviation in changes BUT ALSO look at there run-up as well, it was equally much more. AND as I have noted, the difference from replacement cost has the largest cap when we remove land factor, keeping replacement on the structure itself, thus being able to view the value factor of the land alone.
Land is where the greatest adjustments will be seen, not in structures.
So, in markets where overall sales values are closer aligned to the utilitarian factor of replacement cost of unit, such as Ohio, of an Iowa for example, lessor adjustments will come. You take your CA homes, where we see some of the biggest gaps in this factor nationally speaking, yup, expect the bigger deviations.
Also, watch for "insulated" markets to be, well, "insulated". For example certain neighborhoods in D.C., investors in those areas will know exactly what I am speaking about here.
The midwest is famous in intuitional investing circles as "good ole reliable" and I don't see any change to this standing. Pricing generally more closely follows the utilitarian cost points vs perceptual thus, muting such big swings.
Again..... again, again, again...... The conversation is one of MARKET WIDE, as in NATIONAL Real Estate market "crash". So I speak specifically to a National median/average etc.. and On that National line, no, NO 20%+ "crash" of Real Estate. I don't know how I can get more clear and defined. Yes, 100%, there will be market specific variances, there always is. yes, some village in Alaska might rocket 90%, some area in L.A. could drop 90%, again for the countless times these are market specific variances, we are talking a NATIONAL number/%.
I for long time have been calling out CA as having a significant time of pain soon coming. The net outflow of persons from CA is substantial, it is. And stage is set for major infrastructure issue that could really spur an even more rapid exodus. That outflow could spur a net unit glut of properties and THAT, a unit GLUT, that is a key necessity to get rapidly descending R.E. prices because it facilitates prices going SUB replacement cost value.
It's really hard, I dare say impossible, to get a collapse/crash of real estate when there is not enough real estate. If Johnny has 10 apples, and 20 people want apples, how low will the price of Johnnys apples go? Yeah, kind of elementary. And guess what, just because 10 of the 20 can't afford what Johnny is charging, it does not matter because Johnny only has 10 apples, he only cares what 10 can pay. Johnny doe snot need 20 buyers, just 10.
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
It’s a little different now though. People back then had teaser rates that adjusted them to a higher mortgage payment that they couldn’t afford. Folks now have the fixed low payment, they can “afford” to lose 20-30 percent in home value. Sure they may not like being negative equity, but they still need a place to live and payment is all that matters. Highly leveraged investors though, will be impacted.
NOw I'm confused your arguing for 30% down but then making the argument myself and @James Hamling have been making that the rates and the fact they have a good payment will keep them in the home. Which is sort of the point - we will likely get market stagnation and far less deals.
Now as to highly leveraged investors - they should only hurt if they have been flipping them and/or intended to. Rents going to stay high if not go higher so cash flow should improve. Frankly I just raised my rates about 30% now granted rates were about 3 years old (had good tennants in a long term lease). Given where rates are at and the cost of these properties I could easily see raising 10% next year and likely still rent in an hour like they did this year (or tennants stay). I'll have look at the macro situation and my w2 funds my investments (or has so to speak) so I'm in a bit different scenario but I don't see a downturn in my cashflow at all. If I were flipping these quickly yes.
Quote from @Carlos Ptriawan:
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
Today the Fed chairman stating if they keep the rate high, inflation would be 2% by end of 2023. That's their theory.
We really don't know what would happen since this is happening for the first time in history.
There're just too many unknown unlike 2008 which is specific to real estate only, this time it's way bigger than just local real estate.
@Carlos Ptriawan - I had a crazy busy day work wise so lagging behind a lot of the news. Context wise just in that comment it sounds like they are backing off October basis points increase and will let it just ride at the current level? That's sort of what I was hoping for. I'll take that as a positive but I'll have to find the full interview/statement
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
At what percentage drop is it not considered an "adjustment"??? 20% over 18 months still an adjustment? 50% over 2 years? I don't think anyone will care about the semantics of it when housing drops 20-30%
I think James keeps saying there's no crash because his market is really doing well, all recently sold houses are still reaching an all-time high, I checked the latest house sold in Zillow from 3550 Fremont Ave S, Minneapolis, MN 55408 to 5726 Bryant Ave S they all have good price and no price adjustment.
Since nobody is really buying "national" home price is argument is making sense as well.
The next test would be Dec this year, is the market going to have 'full market crash' or continue 'partial price adjustment' like today ??
50% over 2 years is not a "crash". Yes, it's a lot of change, still, it's not a crash.
Think of it in terms of a automobile, what is a "crash"? It's a sudden, massive change, generally from unforeseen factors. A deer runs out, "holly-hell", you hit the brakes, "POW" the car is massively changed, to the lessor, in the blink of an eye. We call that a "crash".
The term "crash" is exactly that, a massive change in a sudden event. The word is what the word is, again, nobody get's to reassign the English language.
A 50% change in home prices over 2 years is generally a market re-pricing. And let's be honest, any notion of such actually happening is ridiculous to say the least, because were talking a change to material and labor costs that have very literally never happened in the entire history of the U.S.. Feel free to dig into the data and find me a time that median wages went backwards 50%.
A market Adjustment is, generally speaking, pricing adjustments in the range of up to 10%. These occur over a duration of time, measured in months. As I have said countless times, there WILL BE market specific adjustments in greater and lessor deviations. SF bay is a great example, that place is primed for a much larger deviation in changes BUT ALSO look at there run-up as well, it was equally much more. AND as I have noted, the difference from replacement cost has the largest cap when we remove land factor, keeping replacement on the structure itself, thus being able to view the value factor of the land alone.
Land is where the greatest adjustments will be seen, not in structures.
So, in markets where overall sales values are closer aligned to the utilitarian factor of replacement cost of unit, such as Ohio, of an Iowa for example, lessor adjustments will come. You take your CA homes, where we see some of the biggest gaps in this factor nationally speaking, yup, expect the bigger deviations.
Also, watch for "insulated" markets to be, well, "insulated". For example certain neighborhoods in D.C., investors in those areas will know exactly what I am speaking about here.
The midwest is famous in intuitional investing circles as "good ole reliable" and I don't see any change to this standing. Pricing generally more closely follows the utilitarian cost points vs perceptual thus, muting such big swings.
Again..... again, again, again...... The conversation is one of MARKET WIDE, as in NATIONAL Real Estate market "crash". So I speak specifically to a National median/average etc.. and On that National line, no, NO 20%+ "crash" of Real Estate. I don't know how I can get more clear and defined. Yes, 100%, there will be market specific variances, there always is. yes, some village in Alaska might rocket 90%, some area in L.A. could drop 90%, again for the countless times these are market specific variances, we are talking a NATIONAL number/%.
I for long time have been calling out CA as having a significant time of pain soon coming. The net outflow of persons from CA is substantial, it is. And stage is set for major infrastructure issue that could really spur an even more rapid exodus. That outflow could spur a net unit glut of properties and THAT, a unit GLUT, that is a key necessity to get rapidly descending R.E. prices because it facilitates prices going SUB replacement cost value.
It's really hard, I dare say impossible, to get a collapse/crash of real estate when there is not enough real estate. If Johnny has 10 apples, and 20 people want apples, how low will the price of Johnnys apples go? Yeah, kind of elementary. And guess what, just because 10 of the 20 can't afford what Johnny is charging, it does not matter because Johnny only has 10 apples, he only cares what 10 can pay. Johnny doe snot need 20 buyers, just 10.
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
It’s a little different now though. People back then had teaser rates that adjusted them to a higher mortgage payment that they couldn’t afford. Folks now have the fixed low payment, they can “afford” to lose 20-30 percent in home value. Sure they may not like being negative equity, but they still need a place to live and payment is all that matters. Highly leveraged investors though, will be impacted.
NOw I'm confused your arguing for 30% down but then making the argument myself and @James Hamling have been making that the rates and the fact they have a good payment will keep them in the home. Which is sort of the point - we will likely get market stagnation and far less deals.
Now as to highly leveraged investors - they should only hurt if they have been flipping them and/or intended to. Rents going to stay high if not go higher so cash flow should improve. Frankly I just raised my rates about 30% now granted rates were about 3 years old (had good tennants in a long term lease). Given where rates are at and the cost of these properties I could easily see raising 10% next year and likely still rent in an hour like they did this year (or tennants stay). I'll have look at the macro situation and my w2 funds my investments (or has so to speak) so I'm in a bit different scenario but I don't see a downturn in my cashflow at all. If I were flipping these quickly yes.
Quote from @Carlos Ptriawan:
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
Today the Fed chairman stating if they keep the rate high, inflation would be 2% by end of 2023. That's their theory.
We really don't know what would happen since this is happening for the first time in history.
There're just too many unknown unlike 2008 which is specific to real estate only, this time it's way bigger than just local real estate.
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
30% nationally would be above 08. Unless we crash the global economy I don't see that happening but time will tell.
Today the Fed chairman stating if they keep the rate high, inflation would be 2% by end of 2023. That's their theory.
We really don't know what would happen since this is happening for the first time in history.
There're just too many unknown unlike 2008 which is specific to real estate only, this time it's way bigger than just local real estate.
https://www.marketwatch.com/st...
Open ended but makes me think they are trying to allow for the option to back off an October rate hike. Personally I think 30 day pause make sense. Revisit it in November. See how the economy shook up globally.
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#1 Real Estate Agent Contributor
- Real Estate Broker
- Minneapolis, MN
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing. Too many have this "collapse" mindset, as if it's something that happens every 10yrs or so, it's not.
Is rising interest rates on par with the '08' financial system collapse? Or with the 70's?
Read up on @Russell Brazil, that's best direction I can give. Look to those who have seen these tea leaves before, or ones similar to it.
- James Hamling
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing. Too many have this "collapse" mindset, as if it's something that happens every 10yrs or so, it's not.
Is rising interest rates on par with the '08' financial system collapse? Or with the 70's?
Read up on @Russell Brazil, that's best direction I can give. Look to those who have seen these tea leaves before, or ones similar to it.
My thoughts: Folks with low interest 30 year fixed rate loans will have an asset. Many will stay in their houses longer because those rates are irreplaceable. Commercial real estate have shorter term loans and some assets that cannot easily raise rents and occupancy are in trouble when they have to refinance at higher rates: Office buildings. The big crash of 2008 coincided with the freezing of the mortgage credit markets. Watch loan delinquencies, but it is predicted to be less severe this time. In recessions, there generally are some buying opportunities. I will not be buying anything for awhile, but I am prepared.
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#1 Rehabbing & House Flipping Contributor
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- West Valley Phoenix
Quote from @James Hamling:
Yeah, I'd say way off the mark.
But yet, James, I know of a couple of areas that are already at 10+%. Of course this is location specific, but I'm talking San Diego County and parts of Arizona, 2 pretty telling markets, right?
Just consider that you may be being too optimistic....? Not by much, perhaps, but at least a bit, in my estimation..... but what the F do I know right?
Quote from @Bruce Woodruff:
Quote from @James Hamling:
Yeah, I'd say way off the mark.
But yet, James, I know of a couple of areas that are already at 10+%. Of course this is location specific, but I'm talking San Diego County and parts of Arizona, 2 pretty telling markets, right?
Just consider that you may be being too optimistic....? Not by much, perhaps, but at least a bit, in my estimation..... but what the F do I know right?
@Bruce Woodruff ehh according to all the data posted earlier. It’s 10% down from the peak not year over year. Two completely different things.
Anyway the fed has to break global economy or the Florida market has to fall out the west the west is. Otherwise not enough homes to hit that median change like most are describing.
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing.
I don't understand the rationale behind comments like this. Why in the world would we try to pretend that the conditions 50-100 years ago are the same as we're seeing today? And why would we pretend that these historic events and the economical environment back then are somehow analogous to what's to come in current times?
America right now, and our economical conditions show very few similarities to the America of the 40s, 50s, 60s, 70s, 80s, and 90s. We are in unchartered territory. To think that we know what's coming next because "x" happened a century or a half-century ago is nonsensical.
We just exited a global pandemic, the stock market is in free fall (Dow closed the worst September in 20 years), we've printed so much money that the dollar is on the brink of collapse, we just exited a time of true historically low mortgage rates which created a massive housing bubble, hyper-inflation is raging out of control which has caused the fed to raise the interest rate through the roof, and mortgage rates have more than doubled in the last few months.
What we're seeing now has never happened before in the history of our country. Nothing that happened 50 or a 100 years ago is an indicator of what's going to happen next.
And of course we should learn from the past and our history. But we should also learn to know when we're seeing something that we haven't encountered before.
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Of course I'm talking about a drop from the recent peak.....that's the loss we're talking about here....
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing.
I don't understand the rationale behind comments like this. Why in the world would we try to pretend that the conditions 50-100 years ago are the same as we're seeing today? And why would we pretend that these historic events and the economical environment back then are somehow analogous to what's to come in current times?
America and our economical conditions show very few similarities to the America of the 40s, 50s, 60s, 70s, 80s, and 90s. We are in unchartered territory. To think that we know what's coming next because "x" happened a century or a half-century ago is nonsensical.
We just exited a global pandemic, the stock market is in free fall (Dow closed the worst September in 20 years), we've printed so much money that the dollar is on the brink of collapse, we just exited a time of true historically low mortgage rates which created a massive housing bubble, hyper-inflation is raging out of control which has caused the fed to raise the interest rate through the roof, and mortgage rates have more than doubled in the last few months.
What we're seeing now has never happened before in the history of our country. Nothing that happened 50 or a 100 years ago is an indicator of what's going to happen next.
And of course we should learn from the past and our history. But we should also learn to know when we're seeing something that we haven't seen before.
Quote from @John Carbone:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing.
I don't understand the rationale behind comments like this. Why in the world would we try to pretend that the conditions 50-100 years ago are the same as we're seeing today? And why would we pretend that these historic events and the economical environment back then are somehow analogous to what's to come in current times?
America and our economical conditions show very few similarities to the America of the 40s, 50s, 60s, 70s, 80s, and 90s. We are in unchartered territory. To think that we know what's coming next because "x" happened a century or a half-century ago is nonsensical.
We just exited a global pandemic, the stock market is in free fall (Dow closed the worst September in 20 years), we've printed so much money that the dollar is on the brink of collapse, we just exited a time of true historically low mortgage rates which created a massive housing bubble, hyper-inflation is raging out of control which has caused the fed to raise the interest rate through the roof, and mortgage rates have more than doubled in the last few months.
What we're seeing now has never happened before in the history of our country. Nothing that happened 50 or a 100 years ago is an indicator of what's going to happen next.
And of course we should learn from the past and our history. But we should also learn to know when we're seeing something that we haven't seen before.
Quote from @Greg R.:
Quote from @John Carbone:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Ok so I am saying there will be 20-30 percent drop in national median home values over next 18 months. I never said it was a “crash”, am I way off the mark?
Yeah, I'd say way off the mark.
A 30% drop in median house value, nationally, that's 2008 collapse level. What makes you think that will happen again? You have to go back 75 yrs prior to 2008 for such a thing.
I don't understand the rationale behind comments like this. Why in the world would we try to pretend that the conditions 50-100 years ago are the same as we're seeing today? And why would we pretend that these historic events and the economical environment back then are somehow analogous to what's to come in current times?
America and our economical conditions show very few similarities to the America of the 40s, 50s, 60s, 70s, 80s, and 90s. We are in unchartered territory. To think that we know what's coming next because "x" happened a century or a half-century ago is nonsensical.
We just exited a global pandemic, the stock market is in free fall (Dow closed the worst September in 20 years), we've printed so much money that the dollar is on the brink of collapse, we just exited a time of true historically low mortgage rates which created a massive housing bubble, hyper-inflation is raging out of control which has caused the fed to raise the interest rate through the roof, and mortgage rates have more than doubled in the last few months.
What we're seeing now has never happened before in the history of our country. Nothing that happened 50 or a 100 years ago is an indicator of what's going to happen next.
And of course we should learn from the past and our history. But we should also learn to know when we're seeing something that we haven't seen before.
I didn’t know this until just a few minutes ago, but housing prices collapsed (there were no buyers)….
“ To protect themselves, banks began calling in some of their loans. When debtors could not meet the demands of their creditors, they were forced to sell their homes and possessions, and with money unavailable even at the legal limit of 12%, prices of real estate and other goods collapsed since there were so few buyers. A full scale panic followed. The panic occurred not only in Rome, but throughout the Empire. If anyone thinks that it is only in recent times that financial markets have been so fully integrated that the failure of the Creditanstalt in 1931 or Lehman in 2008 could precipitate a panic, they clearly have not read their history.”
Quote from @Bruce Woodruff:
Of course I'm talking about a drop from the recent peak.....that's the loss we're talking about here....
Well peak of a single month to the comparing year over year. It’s just sort of pointless. Who looks at the market that way prices are always in fluctuation you need to look at consistency. Which is why as a rule they compare the markets on a 12 month or year over year basis.
Anyway we’ll see where it goes. I don’t see any of them ain we saw in 08. May as well just wait until it rolls at this point if we are going to compare the absolute peak month.
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
And everyone in that town is still going to wake up tomorrow having lived through a “crash” and it won’t matter other than the fact they can’t call up their bank and get a heloc. Their phantom equity disappeared, but life goes on unlike in 2008. Prices dropping on low volume, as I suspected.
Quote from @John Carbone:
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
And everyone in that town is still going to wake up tomorrow having lived through a “crash” and it won’t matter other than the fact they can’t call up their bank and get a heloc. Their phantom equity disappeared, but life goes on unlike in 2008. Prices dropping on low volume, as I suspected.
My concern would be that America is reliant on asset prices for consumer spending. If that goes away we could start having employment issues and the house of cards could start being exposed. Not sure but I think that is a real possibility. If Americans cannot borrow against their inflating assets the entire economy will look and behave much differently. America does not produce much in the way of goods and consumes an awful lot, it just might catch up with us one day.
Quote from @Eric Bilderback:
Quote from @John Carbone:
Quote from @Eric Bilderback:
Just did my monthly report for my trendy little West Coast mountain town. Transaction dropped by 40% this month. Price and Sq ft price both dropped by over 20%. Could be a blip or the collapse of Republic! LOL Probably somewhere in the middle hopefully closer to a blip.
And everyone in that town is still going to wake up tomorrow having lived through a “crash” and it won’t matter other than the fact they can’t call up their bank and get a heloc. Their phantom equity disappeared, but life goes on unlike in 2008. Prices dropping on low volume, as I suspected.
My concern would be that America is reliant on asset prices for consumer spending. If that goes away we could start having employment issues and the house of cards could start being exposed. Not sure but I think that is a real possibility. If Americans cannot borrow against their inflating assets the entire economy will look and behave much differently. America does not produce much in the way of goods and consumes an awful lot, it just might catch up with us one day.
Yes, the capital markets are already pricing in the FED doing a reversal on what they said a few weeks ago, and slowing down the rate hikes, with a projected rate CUT early next year. I figured that would happen, because as you say, our whole economy is based off of inflating asset values. The problem the FED faces, is a credibility one. If they really backtrack so quickly, they risk losing control of inflation and nobody will ever believe them again (not that they should be believed now based on their history.) we could be looking at a 5 percent baseline inflation going forward in years to come if they cave in and cut rates, instead of the 2-3 percent. If we have 5 percent, that means everything doubles every 14 years as opposed to 30 years. The fed really does need to control inflation….I just don’t think they can do it without busting the whole economy, and I think the FED now realizes they are in a huge predicament, either way we end up losing. Although as real estate investors, we prefer them losing control of inflation as opposed to busting the economy if had to choose one or the other.