Author Topic: Will we get a RE crash?  (Read 9980 times)

waltworks

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Will we get a RE crash?
« on: March 15, 2020, 02:41:41 PM »
House in my neighborhood that I would expect to list/sell for around a million bucks just went up for $795k.

Now, I haven't walked through this place, but I know the location and neighborhood well and it's not obviously trashed or defective.

Will we see a housing crash?

-W

maizefolk

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Re: Will we get a RE crash?
« Reply #1 on: March 15, 2020, 02:49:36 PM »
If the government swoops in and does some sort of a mortgage/rent payment holiday like Italy, I don't think we'll see prices drop that much.

If no action is taken, my guess is that by this summer there will be enough people furloughed or out of work who cannot make mortgage or rent payments that real estate will drop down as folks are forced to sell.

alcon835

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Re: Will we get a RE crash?
« Reply #2 on: March 15, 2020, 03:19:30 PM »
A RE crash feels pretty unlikely. Housing prices may drop some in the short-term as folks hold onto their money instead of buying a house. And if this turns into a full blown recession, then overall home values will drop for a bit. But I don't think we should expect anything similar to 2008. Folks aren't going bankrupt because of COVID-19, they're just cutting back spending.

maizefolk

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Re: Will we get a RE crash?
« Reply #3 on: March 15, 2020, 03:55:11 PM »
Folks aren't going bankrupt because of COVID-19, they're just cutting back spending.

Agreed that this is the case so far. But I think that is because so far companies have largely kept employees on, even as offices and retail stores close down. If this continues, at some point they will no longer be able to do so and we'll start seeing large scale layoffs or furloughs.

That's when we would start seeing a lot of bankruptcies among the ~40% of americans who cannot absorb even a $400 unexpected expense.

waltworks

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Re: Will we get a RE crash?
« Reply #4 on: March 15, 2020, 04:27:01 PM »
It's an interesting question to ponder - how much economic harm are we collectively willing to tolerate in order to save lives?

I mean, we can and do put a value on human life. As heartless as it sounds, I think I'd take a million mostly elderly deaths over a great depression 2 (which might well actually result in MORE deaths than that).

If everyone simultaneously cuts back their spending by some significant amount and that's sustained over any meaningful period of time, 25% of the country will be out of a job. Those people won't be paying rent or mortgages anymore. That will be a hell of a hit for the RE market if it happens, and I would not be surprised to see a 2008 style crash in that scenario.

-W

maisymouser

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Re: Will we get a RE crash?
« Reply #5 on: March 15, 2020, 04:31:56 PM »
My partner and I were just talking about this. PTF.

I was initially thinking, if COVID actually kills a lot of older people, properties may open up relatively rapidly.

dividendman

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Re: Will we get a RE crash?
« Reply #6 on: March 15, 2020, 05:12:38 PM »
I'm hoping for a bit of a crash as well, who knows if it'll happen though.

Telecaster

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Re: Will we get a RE crash?
« Reply #7 on: March 15, 2020, 05:22:56 PM »
I think we probably will.  You need a job and income to get a mortgage.

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #8 on: March 15, 2020, 06:27:59 PM »
A crash would be good in the long run for investors. Buy up all the properties and rent them out and then instead of having people pay off their own mortgages, they'll be paying off your rent instead.

Papa bear

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Re: Will we get a RE crash?
« Reply #9 on: March 15, 2020, 06:51:27 PM »
House in my neighborhood that I would expect to list/sell for around a million bucks just went up for $795k.

Now, I haven't walked through this place, but I know the location and neighborhood well and it's not obviously trashed or defective.

Will we see a housing crash?

-W

Youíre supposed to be the one telling us!

I havenít seen any price changes in areas I keep an eye on for listings or sales yet.

Though I do see a downward pressure on rents in the very short term.  Iím already hearing about tenants who may not be able to make a months rent due to service, restaurant, and retail jobs slowing or being shut down.  There are also local moratoriums on evictions during this time period, so recourse for the landlord is pretty slim right now.

Going to be a rough few months I think.  Weíll see if that actually plays out for real estate prices. 




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Laserjet3051

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Re: Will we get a RE crash?
« Reply #10 on: March 15, 2020, 08:32:38 PM »
insanely low inventory in my LCOL area (relative to high demand) has been buoying valuations here quite efficiently.  Not seeing any significant drops. In fact, the competition for properties is fierce, I consider myself lucky to have had an offer accepted, though being in escrow during these times is unsettling.

waltworks

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Re: Will we get a RE crash?
« Reply #11 on: March 15, 2020, 09:43:10 PM »
I think there are probably 2 necessary conditions to avoid a big RE crash:
-Massive intervention to keep unemployed people from ending up unable to pay rent/mortgage.
-Relative return to normal life in <6 months.

Remember all the people who post here who want to keep their $400k house that rents for $1600/mo? There are lots of them, and if they lose their job the same time their tenant does...

To be clear, I'm not predicting this. I'm hopeful we'll see a couple weeks of major disruptions at most and then things will get going again.

-W

tyrannostache

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Re: Will we get a RE crash?
« Reply #12 on: March 16, 2020, 12:27:02 PM »
This is all making me super nervous. We were getting ready to sell our primary residence and move to a new town with a higher COL (necessary move for spouse's work). We were planning on putting our house on the market at the end of April, renting in the new town starting in June, and start shopping for a new home once we're moved in to a rental. Not sure how any of this is going to affect our timeline.

 


teltic

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Re: Will we get a RE crash?
« Reply #13 on: March 16, 2020, 04:21:57 PM »
@waltworks ! Walt!   I believe you live in Utah right?  Me too...

I'm just a young buck (29) wanting to get into real estate (I've stared at RE for 5 years now).  Teach me your ways...

I've some how managed to not buy a house while all my friends have now bought one...  The $400k houses that rent for $1600 is 100% accurate.

When do you buy in?

For now; I'll continue to punch myself in the face and buy stocks. But dammit I want to start building my real estate empire.


Papa bear

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Re: Will we get a RE crash?
« Reply #14 on: March 16, 2020, 04:51:52 PM »
@waltworks ! Walt!   I believe you live in Utah right?  Me too...

I'm just a young buck (29) wanting to get into real estate (I've stared at RE for 5 years now).  Teach me your ways...

I've some how managed to not buy a house while all my friends have now bought one...  The $400k houses that rent for $1600 is 100% accurate.

When do you buy in?

For now; I'll continue to punch myself in the face and buy stocks. But dammit I want to start building my real estate empire.
When houses get back to the 1% rule.  Or you can buy a place that doesnít meet the rule currently, but with rehab, will meet or exceed the rule. 

Thatís when you look at it.  Iíve had cash sitting on the sidelines for 1.5 years because there was nothing for me to buy.  But that stock market finally looks intriguing =)


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ender

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Re: Will we get a RE crash?
« Reply #15 on: March 16, 2020, 04:56:38 PM »
Prolly, we're closing at the end of the month and the timing would be about as perfectly bad as it could be if there was a crash now...

alcon835

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Re: Will we get a RE crash?
« Reply #16 on: March 16, 2020, 05:37:49 PM »
This is all making me super nervous. We were getting ready to sell our primary residence and move to a new town with a higher COL (necessary move for spouse's work). We were planning on putting our house on the market at the end of April, renting in the new town starting in June, and start shopping for a new home once we're moved in to a rental. Not sure how any of this is going to affect our timeline.

@tyrannostache I don't think the housing market is going to get hit as hard as you might think. How long did you originally expect your house to be on the market?

Wrenchturner

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Re: Will we get a RE crash?
« Reply #17 on: March 16, 2020, 06:02:26 PM »
I think there are probably 2 necessary conditions to avoid a big RE crash:
-Massive intervention to keep unemployed people from ending up unable to pay rent/mortgage.
-Relative return to normal life in <6 months.

Remember all the people who post here who want to keep their $400k house that rents for $1600/mo? There are lots of them, and if they lose their job the same time their tenant does...

To be clear, I'm not predicting this. I'm hopeful we'll see a couple weeks of major disruptions at most and then things will get going again.

-W

That's an interesting idea.  I think we're going to see some type of helicopter money at least here in Canada to support mortgagors and renters.  But will it be enough to support the questionable cash-flow rentals that many have bought as secondary properties?  Employment insurance in Canada maxes out at $54k per year paid out to recipients.

Duke03

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Re: Will we get a RE crash?
« Reply #18 on: March 16, 2020, 07:56:38 PM »
I think there are probably 2 necessary conditions to avoid a big RE crash:
-Massive intervention to keep unemployed people from ending up unable to pay rent/mortgage.
-Relative return to normal life in <6 months.

Remember all the people who post here who want to keep their $400k house that rents for $1600/mo? There are lots of them, and if they lose their job the same time their tenant does...

To be clear, I'm not predicting this. I'm hopeful we'll see a couple weeks of major disruptions at most and then things will get going again.

-W





I agree with everything you say, but I think you are being way to generous on the under 6 month time line.  If this goes on for longer than 6 weeks I think any hope at a quick turn around is all but lost.  I think the second you see a Dow Jones under 20k watch out....  I personally think we will bottom out in the Dow range of 14k-16k. 
« Last Edit: March 16, 2020, 08:06:44 PM by Duke03 »

tyrannostache

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Re: Will we get a RE crash?
« Reply #19 on: March 17, 2020, 01:35:07 PM »
This is all making me super nervous. We were getting ready to sell our primary residence and move to a new town with a higher COL (necessary move for spouse's work). We were planning on putting our house on the market at the end of April, renting in the new town starting in June, and start shopping for a new home once we're moved in to a rental. Not sure how any of this is going to affect our timeline.

@tyrannostache I don't think the housing market is going to get hit as hard as you might think. How long did you originally expect your house to be on the market?

I hope you're right!

Inventory in our price range and neighborhood is really low, so homes have been going FAST. We were originally expecting to be fielding offers within a week and scheduling to close within 60 days of listing. Tentatively, we're going to stick to our timeline of hitting the market on May 1. We can always re-evaluate in April if need be.

waltworks

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Re: Will we get a RE crash?
« Reply #20 on: March 17, 2020, 02:52:22 PM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

Telecaster

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Re: Will we get a RE crash?
« Reply #21 on: March 17, 2020, 03:41:04 PM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing. 

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #22 on: March 17, 2020, 06:37:56 PM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.

That would be an amazing investment environment in the long term.

waltworks

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Re: Will we get a RE crash?
« Reply #23 on: March 17, 2020, 07:27:01 PM »
LOL. 25% off would not be "amazing".

Great recession was 75% off, if you looked in the right markets.

I'm just saying...

-W

marble_faun

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Re: Will we get a RE crash?
« Reply #24 on: March 17, 2020, 07:28:10 PM »
I'm following this with interest!

We had been hoping to buy a house this spring or summer. 

It's been a little weird.

We wanted to get in on the current low interest rates. But so did everyone else, so there's tons of demand, and the banks aren't actually lowering rates as much as you might think.  And systems seem swamped -- it was hard to even get through to the Equifax web site today.

Once we are pre-approved for a mortgage, we will want to check out houses, including in a rural area a few hours away from here.  But should we be traveling?  Riding around with a realtor, going into strangers' homes? What would be best from an etiquette and public health standpoint?

If the market is stalled now, should we wait a couple of months when there are more houses available? Will the prices be lower?

Our current landlord wants to know by May whether we will be staying or leaving. So I'd like to have the future figured out by then, but we might have to say yea or nay without really knowing our next step.

There's just so much uncertainty and strangeness about the whole process now.

One thing I am REALLY grateful for is the fact that we kept our down-payment nest egg out of the stock market.

Chris Pascale

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Re: Will we get a RE crash?
« Reply #25 on: March 17, 2020, 10:31:47 PM »
Some signs lead to a possible RE slump/crash. Buddy of mine in the UK said he spent the last year trying to buy a home, but there were frequently multiple bids, and even homes in bad states were getting offers of above the listing price.

I found it to be that way in 2007 when I was buying my first home in North Carolina.

Additionally, I've heard that consumer lending on cards from retail establishments is higher now than in 2007.

Telecaster

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Re: Will we get a RE crash?
« Reply #26 on: March 18, 2020, 12:09:53 AM »

That would be an amazing investment environment in the long term.

If prices come down.  People don't like to sell for a loss and real estate prices are sticky.  In 2009 there was blood in the water.   We're not at that point yet, but our government's policy of lies and disinformation might get us there sooner than later.

ender

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Re: Will we get a RE crash?
« Reply #27 on: March 18, 2020, 08:41:29 PM »

That would be an amazing investment environment in the long term.

If prices come down.  People don't like to sell for a loss and real estate prices are sticky.  In 2009 there was blood in the water.   We're not at that point yet, but our government's policy of lies and disinformation might get us there sooner than later.

Forclosure rate in 2019 was also a fraction what it was in 2008-2010 too.

Certainly that could go up but it will need to go up 5x or so for it to be as high as it was in those years.

MountainTown

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Re: Will we get a RE crash?
« Reply #28 on: March 18, 2020, 11:10:57 PM »
We just backed out of a contract. I had been wondering if I should for a week or so because a house we went under contract with that advertised as "renovated" turned out to not be so renovated in the structural sense. The seller was willing to come down substantially in this last week--I think because they saw things turning for the market. Ultimately I decided that due to definite $20k in structural repairs(would almost be covered by lower bid), mold issues, electrical issues, and possible asbestos...I decided to back out.

Ultimately I think I just decided this wasn't what I went into the contract thinking...I have never wanted a house like this. I just thought it was different. It's hard when you go under contract, you do feel obligated...so I keep exploring and exploring but finally I had to throw up my hands and say I didn't want this.

All that being said, the shakiness in the market gave me a little confidence to back out. Honestly we really need a house now as our family is increasing. I only have about 1-2 months before it gets real for the due date. So I'm a little scared/little hopeful that there could be some slight deals. Not asking for much...it's just been way over inflated recently to the point where the above problems were totally acceptable if in a decent location.


spartana

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Re: Will we get a RE crash?
« Reply #29 on: March 20, 2020, 12:35:13 AM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working. 

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #30 on: March 20, 2020, 12:57:13 AM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

In which case, we will have another generation of FIREd people riding off the recovery, same as post-2008.

ender

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Re: Will we get a RE crash?
« Reply #31 on: March 20, 2020, 06:35:53 AM »
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

imo it depends on how long this economic activity stays at a halt.

If it's a month? I'm less convinced. But if it's a year like this? It's going to get really ugly.

former player

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Re: Will we get a RE crash?
« Reply #32 on: March 20, 2020, 07:05:54 AM »
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

imo it depends on how long this economic activity stays at a halt.

If it's a month? I'm less convinced. But if it's a year like this? It's going to get really ugly.
And to add to the gloom: the recovery will only last until the next coronavirus comes along and does the same thing again.

spartana

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Re: Will we get a RE crash?
« Reply #33 on: March 20, 2020, 09:25:07 AM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

In which case, we will have another generation of FIREd people riding off the recovery, same as post-2008.
Yeah like the Japanese. Or all those lucky folks post 1930.  Most of the people I know didn't fully recover from the housing, stock market, and job market decline post 2008. Or if they did it took almost a decade. A lot is going to depend on the age someone is too. If you are talking to a bunch of people who were in their 40s in 2008 and lost their job, house and investments and eventually recovered, they may be harder hit now in their 50s the second time around depending on how things go.

RE here in the smoking hot coastal SoCal area is flat now despite extremely low interest rates and a lot of cash-rich investors/developers (many from China). So its highly likely housing prices will fall soon once people start losing jobs and savings. That great for buyers who can get loans or pay cash but is going to suck for those who want to sell or can't make their payments due to job loss. Plus with the new rule that you can't evict a tenent or homeowner for non-payment during the crisis, I doubt banks are going to be as willing to lend to new buyers.

ETA on another thread someone from China said things are starting to normalize a bit and people are going back to work and school will restart in April so maybe this will all be short lived and you buyers should lock in those super low interest rates asap. I planned to rent my house in June and move in with BF but will wait and see.
« Last Edit: March 20, 2020, 11:00:33 AM by spartana »

Linea_Norway

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Re: Will we get a RE crash?
« Reply #34 on: March 20, 2020, 11:51:51 AM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

In which case, we will have another generation of FIREd people riding off the recovery, same as post-2008.
Yeah like the Japanese. Or all those lucky folks post 1930.  Most of the people I know didn't fully recover from the housing, stock market, and job market decline post 2008. Or if they did it took almost a decade. A lot is going to depend on the age someone is too. If you are talking to a bunch of people who were in their 40s in 2008 and lost their job, house and investments and eventually recovered, they may be harder hit now in their 50s the second time around depending on how things go.

RE here in the smoking hot coastal SoCal area is flat now despite extremely low interest rates and a lot of cash-rich investors/developers (many from China). So its highly likely housing prices will fall soon once people start losing jobs and savings. That great for buyers who can get loans or pay cash but is going to suck for those who want to sell or can't make their payments due to job loss. Plus with the new rule that you can't evict a tenent or homeowner for non-payment during the crisis, I doubt banks are going to be as willing to lend to new buyers.

ETA on another thread someone from China said things are starting to normalize a bit and people are going back to work and school will restart in April so maybe this will all be short lived and you buyers should lock in those super low interest rates asap. I planned to rent my house in June and move in with BF but will wait and see.

I understood that China is now getting infected from abroad. Things might turn into shutdown there again.

Paper Chaser

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Re: Will we get a RE crash?
« Reply #35 on: March 20, 2020, 11:59:26 AM »

RE here in the smoking hot coastal SoCal area is flat now despite extremely low interest rates and a lot of cash-rich investors/developers (many from China). So its highly likely housing prices will fall soon once people start losing jobs and savings. That great for buyers who can get loans or pay cash but is going to suck for those who want to sell or can't make their payments due to job loss. Plus with the new rule that you can't evict a tenent or homeowner for non-payment during the crisis, I doubt banks are going to be as willing to lend to new buyers.

If you can't evict or foreclose, then would there be anybody that needs to sell due to job loss, etc? Seems like the motivation to sell for financial hardship reasons pretty much disappears if you know you can't be evicted or foreclosed on.

That being said, I think the initial plan from the Feds only calls for protection of FHA and or HUD loans.

spartana

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Re: Will we get a RE crash?
« Reply #36 on: March 20, 2020, 12:24:05 PM »

RE here in the smoking hot coastal SoCal area is flat now despite extremely low interest rates and a lot of cash-rich investors/developers (many from China). So its highly likely housing prices will fall soon once people start losing jobs and savings. That great for buyers who can get loans or pay cash but is going to suck for those who want to sell or can't make their payments due to job loss. Plus with the new rule that you can't evict a tenent or homeowner for non-payment during the crisis, I doubt banks are going to be as willing to lend to new buyers.

If you can't evict or foreclose, then would there be anybody that needs to sell due to job loss, etc? Seems like the motivation to sell for financial hardship reasons pretty much disappears if you know you can't be evicted or foreclosed on.

That being said, I think the initial plan from the Feds only calls for protection of FHA and or HUD loans.
That's true. Even if you lost your jobs and savings/investments and your house value declines and it's underwater by 50%, there is no reason to sell, and the banks can't foreclose or force a short sale due to lack of payment, so may end up being the opposite of the great recession housing-wise - no one's selling so no one can buy regardless if the prices tank or interest rates go to zero.

Of course that could put a huge load on lenders and banks (and private landlords) who may fold 2008-style and further push the economy down. Anyone remember the bank runs in 2008? Hmmm...my mattress is looking good ;-). Seriously I don't think this will happen and things will likely just correct a bit.
« Last Edit: March 20, 2020, 12:27:53 PM by spartana »

spartana

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Re: Will we get a RE crash?
« Reply #37 on: March 20, 2020, 01:04:58 PM »
Also just heard the stop of evictions and foreclosures is just until the end of April which wouldn't be very impactful to anyone. Is that true? I had previously heard it was until the emergency was over - which could be months or longer - and then then the tenant or mortgagee had 6 months to pay it all back. Maybe that's just in certain areas of Calif.
 

Freedomin5

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Re: Will we get a RE crash?
« Reply #38 on: March 20, 2020, 02:30:23 PM »
My realtor friends, for what it's worth, say the market has completely frozen. No buyers, no new listings, no action at all.

That could be temporary, obviously. People are pretty freaked out.

My almost never right crystal ball says we're in for a solid 25% haircut on RE nationwide, though.

-W

I have a realtor friend (singular) who says the same thing.
I have a realtor friend who said the same thing too. But I'm leaning more towards a 2008 drop. Maybe more. Maybe much more. I just can't see how the housing market at its high level is sustainable when the US is shut down and no one is working.

In which case, we will have another generation of FIREd people riding off the recovery, same as post-2008.
Yeah like the Japanese. Or all those lucky folks post 1930.  Most of the people I know didn't fully recover from the housing, stock market, and job market decline post 2008. Or if they did it took almost a decade. A lot is going to depend on the age someone is too. If you are talking to a bunch of people who were in their 40s in 2008 and lost their job, house and investments and eventually recovered, they may be harder hit now in their 50s the second time around depending on how things go.

RE here in the smoking hot coastal SoCal area is flat now despite extremely low interest rates and a lot of cash-rich investors/developers (many from China). So its highly likely housing prices will fall soon once people start losing jobs and savings. That great for buyers who can get loans or pay cash but is going to suck for those who want to sell or can't make their payments due to job loss. Plus with the new rule that you can't evict a tenent or homeowner for non-payment during the crisis, I doubt banks are going to be as willing to lend to new buyers.

ETA on another thread someone from China said things are starting to normalize a bit and people are going back to work and school will restart in April so maybe this will all be short lived and you buyers should lock in those super low interest rates asap. I planned to rent my house in June and move in with BF but will wait and see.

I understood that China is now getting infected from abroad. Things might turn into shutdown there again.

There are a few cases per day, but itís not rampant. They are testing EVERYONE flying into China and making them wait in centralized processing locations until the test results come back before releasing them for mandatory supervised 14-day quarantine. Any imported infections are immediately transported to designated hospitals until the person tests negative. China really really really does not want a second wave.

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #39 on: March 20, 2020, 06:57:58 PM »
Most of the people I know didn't fully recover from the housing, stock market, and job market decline post 2008. Or if they did it took almost a decade.

I'm not talking about the average person - who probably still hasn't recovered from the impact of 2008. I'm talking about MMM folks like us. I couldn't take advantage of 2008 because I was still a student. But my parents certainly benefited. And so did nearly everyone in those "Race to $1m/$2m" threads on these forums (good on them!) They all invested in the past 10-12 years and made a killing and even after this current issue is over they will still be in a decent position.

Now that I'm no longer a student, I hopefully will be in that position in 10-12 years. Sure, then something else will come along and restart the cycle, but you get the idea.

Obviously for those people in their 40s in 2008 who lost their job etc, they would have less chance of a quick recovery. But then, they had their chance in the late 90s and 2000s. These cycles repeat.


FatFI2025

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Re: Will we get a RE crash?
« Reply #40 on: March 22, 2020, 08:28:36 AM »
I don't think there will be a crash like 2008 - 2010 for a few reasons. First, the underwriting standards have remained relatively strong and owners are less likely to be over-leveraged. Second, due to income inequality, owners are more likely to be higher income/white collar and not lose their jobs. Restaurant/retail workers can't afford to buy so they have nothing to distress sell. Lastly, banks learned from 2008 that they don't want to own a bunch of properties, so they will likely lean into forbearance/modification. As another poster said, no reason to firesale a house if you can't get foreclosed on.

ETA: My prediction is that we'll start return to normal in the US around May 15. It will take a while to get everything running at 100%, but not too long. People will be eager to get back to work and make up for lost time/wages.
« Last Edit: March 22, 2020, 08:35:30 AM by FatFI2025 »

ender

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Re: Will we get a RE crash?
« Reply #41 on: March 22, 2020, 11:31:30 AM »
I don't think there will be a crash like 2008 - 2010 for a few reasons. First, the underwriting standards have remained relatively strong and owners are less likely to be over-leveraged. Second, due to income inequality, owners are more likely to be higher income/white collar and not lose their jobs. Restaurant/retail workers can't afford to buy so they have nothing to distress sell. Lastly, banks learned from 2008 that they don't want to own a bunch of properties, so they will likely lean into forbearance/modification. As another poster said, no reason to firesale a house if you can't get foreclosed on.

ETA: My prediction is that we'll start return to normal in the US around May 15. It will take a while to get everything running at 100%, but not too long. People will be eager to get back to work and make up for lost time/wages.

Realistically, this depends entirely on what happens as far as unemployment.

People may not be over-leveraged with their jobs but I'm sure plenty of people do not have enough in savings to cover their mortgage.

marble_faun

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Re: Will we get a RE crash?
« Reply #42 on: March 22, 2020, 02:19:47 PM »
A lot of Airbnb hosts are losing business.  As someone in the market to either rent or buy a place soon (depending on what happens), I have seen some places that look like former Airbnbs coming up as long-term, furnished rentals. 

If this continues, it will be interesting to see what impact it has on urban housing markets, which have been really tight.  Honestly it would be great to have a lot of these lodgings return to local residents.

waltworks

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Re: Will we get a RE crash?
« Reply #43 on: March 22, 2020, 03:13:46 PM »
Yeah, the short term rental folks are screwed. I live at ground zero of that and the discounts being offered are hilarious. Slopeside condo for $30 a night, anyone? Of course, you can't actually ski, and all the restaurants are closed...

There are a lot of people swimming naked in the short term rental game.

-W

spartana

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Re: Will we get a RE crash?
« Reply #44 on: March 23, 2020, 12:09:56 PM »
I was actually looking to rent a semi-short term Airbnb cabin for 2 or 3 months but it seems many of the owners pulled them of the market and are shutting down because of Califs shut down. But will take a second look as maybe they are open now for long terk furnished rentals.

Telecaster

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Re: Will we get a RE crash?
« Reply #45 on: March 23, 2020, 06:20:34 PM »
We own a short term rental in Hawaii.  The Governor just canceled April.   I guess May and June and gone too. 

spartana

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Re: Will we get a RE crash?
« Reply #46 on: March 24, 2020, 09:30:12 AM »
Heard on the news this morning that new housing sales dropped 4.8% and expected to go even lower despite low interest loans. So prices on both new and existing homes are likely to follow soon.
« Last Edit: March 26, 2020, 10:34:04 AM by spartana »

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #47 on: March 24, 2020, 06:40:28 PM »
As someone whose FIRE plans depend to a fair extent on residential property, I am awaiting a downturn with interest.

waltworks

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Re: Will we get a RE crash?
« Reply #48 on: March 24, 2020, 07:15:26 PM »
As someone whose FIRE plans depend to a fair extent on residential property, I am awaiting a downturn with interest.

Don't get too excited yet. First because karma is a bitch, and you don't want to root for a lot of people's lives to be ruined, and second because RE prices take forever to drop. Best deals here in the US weren't for 2-4 years after the financial crisis, depending on market.

-W

Bloop Bloop

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Re: Will we get a RE crash?
« Reply #49 on: March 24, 2020, 07:32:45 PM »
Yeah, I'm not wanting such a downturn. It will affect the 2 properties I already own.  But I think it's likely to be inevitable.