The housing market tanked WAAAAY more than expected....

NCHawk5

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You're not typical.
🤷‍♂️ niece needed a place to live for college. Was sort of why the hell not scenario that ended up being a massive cash advantage- but with inflation as it is, the realized gain isn’t as good as it appears.
 

luvmyhawks

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So crashing the real estate market cheapens food, gas, and everyday necessities? Just trying to understand how this works?

I don’t think we need an all out crash in the real estate market, but a moderation and maybe a little drop in valuation is certainly needed. Let’s hope we don’t get a full blown real estate crash. That would present great risk to the overall economy. As of right now, it appears we are in a more normal real estate market, not a complete meltdown.

Im not sure it would really change food and gas. That is why the fed separates core and headline inflation. Core excludes gas and food and is the portion they feel they have more price control in. Shelter accounts for over 30% of the core number. Moderation/drop in this portion and we will naturally see that number come down, eventually. Also, as the demand falls for housing, so to does the demand for building supplies and household goods. Eventually, the supply will catch up and we will continue to see those costs come down, hopefully.
 
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NCHawk5

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I don’t think we need an all out crash in the real estate market, but a moderation and maybe a little drop in valuation is certainly needed. Let’s hope we don’t get a full blown real estate crash. That would present great risk to the overall economy. As of right now, it appears we are in a more normal real estate market, not a complete meltdown.

Im not sure it would really change food and gas. That is why the fed separates core and headline inflation. Core excludes gas and food and is the portion they feel they have more price control in. Shelter accounts for over 30% of the core number. Moderation/drop in this portion and we will naturally see that number come down, eventually. Also, as the demand falls for housing, so to does the demand for building supplies and household goods. Eventually, the supply will catch up and we will continue to see those costs come down, hopefully.
How would that create risk? It won’t happen anyway because you can’t build new houses cheap right now. But damn near everyone is paying a negative real interest rate on their homes. Banks are scrambling right now, and it’s fun to watch them squirm (I despise banks almost as much as politicians).
 

luvmyhawks

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How would that create risk? It won’t happen anyway because you can’t build new houses cheap right now. But damn near everyone is paying a negative real interest rate on their homes. Banks are scrambling right now, and it’s fun to watch them squirm (I despise banks almost as much as politicians).

You certainly won’t hear me disagree with you on the banks. Too big to fail, right.

With the balance sheet the federal reserve is currently carrying and the amount of debt our government is running, I’m not sure we could handle another 08-09 type of real estate meltdown.
 
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NCHawk5

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You certainly won’t hear me disagree with you on the banks. Too big to fail, right.

With the balance sheet the federal reserve is currently carrying and the amount of debt our government is running, I’m not sure we could handle another 08-09 type of real estate meltdown.
I just don’t see it as that big of an issue. Prices will fall, sure. However the inflation we are experiencing (coupled with wage growth that doesn’t match, but is higher than interest rates) will save us from a collapse. This isn’t ‘08, this is ‘79. Lots of adjustments going on in business right now because almost no one has experienced this crap before.
 

Hawgk

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Covid is the major driver of inflation. The first two Covid relief packages were needed because of the lockdowns. The 3rd, was not needed, IMO. Things were open and people were going back to work.

So if you want to blame Biden for any of this, maybe adding 1.9 trillion when it wasn’t really needed. But even that’s a bit of a stretch.

Once we locked down, the supply shortage we’re seeing now was inevitable.

I don’t blame Trump for this either. I will say all of the Covid relief packages were too broad. People like me did not need those checks. Congress could have been more surgical with these.
I agree with pretty much everything here, except Biden wanted to spend even more than he did while downplaying the obvious inflationary risks. He needs to own his portion of the blame.
 

luvmyhawks

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I just don’t see it as that big of an issue. Prices will fall, sure. However the inflation we are experiencing (coupled with wage growth that doesn’t match, but is higher than interest rates) will save us from a collapse. This isn’t ‘08, this is ‘79. Lots of adjustments going on in business right now because almost no one has experienced this crap before.

oh, I concur we aren’t anywhere near the 08-09 situation. I am actually pretty hopeful we get a nice correction in real estate so I can take advantage.
 

NCHawk5

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oh, I concur we aren’t anywhere near the 08-09 situation. I am actually pretty hopeful we get a nice correction in real estate so I can take advantage.
It’s possible to find advantageous situations, but multi family properties are beyond overpriced at the moment. That’s where the money is, and people are paying premiums on it like we’ve never seen. I may have to sit on my latest acquisition (which sucks because it’s a huge house that I don’t want/need and will have to eat utilities)
 

MitchLL

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I don't know if OP was alive in 2008/09, but corrections in the real estate market are not some new phenomenon.
 

The Tradition

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Confused by OP. You wanted to keep seeing prices appreciate by 15-20%? That’s unsustainable. Not really difficult to understand.

Economists had predicted a 4% decline (it was 10%). Sales were down 31% year over year.

This marks the lowest level on the pending sales index since June 2010


You're not alarmed by the severity of this pullback?
 

StormHawk42

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Economists had predicted a 4% decline (it was 10%). Sales were down 31% year over year.

This marks the lowest level on the pending sales index since June 2010


You're not alarmed by the severity of this pullback?
No. It’s been majorly overpriced since 2020. It needed a heat check.

The underlying fixed mortgages at 3% are way more stable than the ARM’s and subprimes of ‘07-‘08.

The high interest rates suck for people looking but if you’re going to be in your house for >3 years, your house value will be fine.
 

Bank of Hawk

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Simple economics here: what one could get approved for a loan, may no longer be the case due to interest rates. So those looking will have to look for lesser house than before or wait it out until prices go down.
 

franklinman

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Omg, who has been pushing this for months now? I’ll give you a hint: me. Biden threw gasoline all over this problem, then acts like it didn’t happen. He’s a moron. Dems are morons. And it wasn’t bipartisan.
LMFAO, clown.
 

Kelsers

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Economists had predicted a 4% decline (it was 10%). Sales were down 31% year over year.

This marks the lowest level on the pending sales index since June 2010


You're not alarmed by the severity of this pullback?
No
 

franklinman

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Economists had predicted a 4% decline (it was 10%). Sales were down 31% year over year.

This marks the lowest level on the pending sales index since June 2010


You're not alarmed by the severity of this pullback?
Hell no, you should have been around in the 70s, when i bought my 1st house, 15.5 % and that was with a nice down payment.
 
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funksouljon

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Hell no, you should have been around in the 70s, when i bought my 1st house, 15.5 % and that was with a nice down payment.


Don't worry, its well documented he has no sense of history, or it repeating. Everything is a surprise to him.


jack-in-the-box-buddy.gif
 
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