Originally posted by @Jay Hinrichs:
Originally posted by @Huy N.:
With the amount of money the government is pumping into the economy, we might see stagflation instead of a depression or recession. Just my two cents. I was putting offers in for a client of mine for a flooded home in Houston and we are still getting outbid with more than 15 offers over asking price on a listing.
The difference I see in this vs 2008 is that seems like all the investors - both big and small, have prepared in advance and have capital ready to deploy.
I'm sure that there are plenty of people that overextended when the market is good. There might be a small window of opportunity to catch some good deal before the thing gets back to normal.
Stack it up in the bank and keep watching the market I would say. worst case if there is nothing to buy, we will end up with more cash in the bank anyway haha
Bp members have been predicting waiting for the crash, the bubble, what ever you want to call it for about 5 years now.
I think just like 08 crash credit markets are getting very very tight and the first to go is INVESTOR credit.. so if you dont have some decent cash or can pay cash.. a good fico and 30k in the bank is not going to get you anything is my prediction if this continues or gets worse.
I agree with this. It's like the old Clint Eastwood line "Deserves got nothing to do with it," except now it 's "Logic's got nothing to do with it" or "The market's got nothing to do with it."
When prices were going up, people said, "This is divorced from income, it can't happen, people won't and can't continue to buy at these prices, the market won't allow it" but it kept going up. Now prices will go down and people think "Well, logically, others will swoop in and buy houses, making a killing. No way 'this sucker goes down.'" But it will. Investors won't buy for awhile and people will marginal credit/cash won't be able to buy. A few people with more income than sense will buy but that won't be enough.
The bottom line, in our crazy system, logic... and even traditional market forces got nothing to do with it. It's access to credit and cash. The system is a bit rigged. If you have no cash, and credit dries up, you can't buy houses. When you need credit, it isn't there.
Basically, during the appreciation cycle, credit becomes increasingly easier to get, especially near the end, as it keeps taking a 'greater fool' to keep the mania going. Then at some point the music stops. Which is where we are now.
Now the price will go down, and banks won't lend because they don't want to get stuck with the house/buybacks/losses. So it is actually protecting some people who would jump and buy early, since their lending partner (the bank) is not going to participate. When the bottom is hit and it seems as it prices will start to inch up, lending will loosen, and the mania will begin again.
