The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: kenmoremmm on January 05, 2021, 03:56:43 PM
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i'm thinking that by summer 2021, the RE market will see serious corrections as forebearances and evictions expose the delayed pain and suffering of the economy.
thoughts?
top is in.
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Could be. But rates are so darn low and aren't supposed to climb. And seems like there is enough demand that supply would have to really shoot up for a correction to happen. I'd like to buy another property so a nice correction would be ok with me - but I don't see that happening. If forbearances end and that starts to have a big impact I think Biden would feel obligated to say sorry and extend forbearance. Same with evictions, I have an easier time seeing government paying rent than government letting many many people get evicted.
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If all of these evictions and foreclosures come to fruition, then there's a large part of society that all need to find new housing at the same time. But they'll all have recent evictions/foreclosures on their record, so who will rent to them? It seems like Government/Fed policy has changed fundamentally since 2008 and they're more than happy to backstop just about everything now, so I see a bunch of government money bailing out somebody before this really gets bad for millions of people.
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Why do you Americans always think there is gonna be a real estate crash all the time?
I've been here 8 years and I've never really understood that mindset.
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Why do you Americans always think there is gonna be a real estate crash all the time?
I've been here 8 years and I've never really understood that mindset.
I think a lot of posters here were either "coming of age" or just beginning their careers/investing during the housing crisis of 2008-2009. Historically speaking, housing prices in the US haven't seen much of a decrease in times of economic struggle, but the largest decrease in housing prices in the last 50-60 years was during the most recent major recession (not including 2020). So the only exposure that a lot of people here have to home prices dropping was probably also the largest one in memory (shaded areas indicate recessions):
(https://fred.stlouisfed.org/graph/fredgraph.png?width=880&height=440&id=MSPUS)
With the Fed changing their policies since the last major recession, and keeping interest rates at historic lows, I'm not expecting much of a drop. A flattening is about the most that I'm expecting personally.