2023 recession?

[DrunkenSailor]

Meaning instead of 25 offers sellers are getting 15?

Inventory is still in the toilet and most of the homes for sale are paying sub 3.5% rates

The 3.5 interest rate is gone. Bond wacs on securitizations are over 4. The average mortgage rate in America is now over 5.

America experienced one of the worst recessions in our history in 2020 with the economy contracting more than 31 percent in the second quarter after contracting 5 percent in the first quarter.

If there is another, it will unlikely come anywhere near as bad as that one.

2020 was the natural pendulum peppered with a lockdown that printed a bunch of new dollars that we couldn't afford. Couple that crippling debt with supply chain issues creating a perfect storm of inflation. The dollars buying power is dropping rapidly and most Americans are not prepared.

2020 was a pause in a long overdue financial balancing that had started in 2019 and was made worse with shutdowns. What comes next is unlike anything we have seen. The longest bull market in history and interest rates never went up. Now the fed has way more on it's balance sheet than it can sell. Rates have to rise too fast just so they have somewhere to go that isn't negative when the shit hits the fan. Not to mention trying to retain any value in the dollar.

The last three weeks of securitizations across multiple sectors are guaranteed to default when default rates move up above 2% within the portfolio, that's how thin they are. New bond issuances defaulting will freeze the credit markets that are already slowing down. There is a lot of credit out there today without a viable takeout.

The Dow has been bouncing back and forth around the 35k mark for months. From 2007 highs the Dow lost 50% of it's value from 13k. Today there is almost 11 trillion dollars in the Dow. What's 5 trillion between friends.

Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times.

This.

The fed had their thumb on the scale for so long I'm not sure what the fall looks like but it's not gonna be pretty. The people predicting this back in 2014 were the smart ones who understand the natural cyclical nature of the economy. I didn't get cynical until 2018. Now I'm morbid.

 

[OldSchoolBoats]

The housing bubble is going to blow up by the end of summer 22. Some are going to make money and some are going to lose everything. Already seeing the starts of foreclosures and high end money is getting harder to get. The first sign you'll see is when your favorite restaurant is half full.

Sorry man but this is far from the truth. Foreclosures aren't starting and buyers are still lining up. They will pay 6%, because they need housing. Will prices keep accelerating at the current pace, NO but the housing market will not crash.
Here are some facts for you -

(1) 140 million millennials will enter the housing market in the next 1-2 years,
(2) millennials outnumber boomers as the largest demographic to ever enter the workplace or housing market, and
(3) builders are behind, not building as many homes as they did in the previous 10 years (5.8 million homes built since 2010, versus 27 million homes built from 2000-2010).


Supply and demand........simple.

The problem is the lack of starter homes. They were all bought up by huge investment firms between 2009 - 2014.

Did you know that they are building master planned communities now and not selling the homes, they are renting them?? The rental market is even more insane then the housing market. These renter only communities will be causes of even more constricted supply.

Housing crash bros continue and will continue to be wrong. A crash by end of summer 2022? Where do you even come up with that and based on what??

 

[HNL2LHC]

Sorry man but this is far from the truth. Foreclosures aren't starting and buyers are still lining up. They will pay 6%, because they need housing. Will prices keep accelerating at the current pace, NO but the housing market will not crash.
Here are some facts for you -

(1) 140 million millennials will enter the housing market in the next 1-2 years,
(2) millennials outnumber boomers as the largest demographic to ever enter the workplace or housing market, and
(3) builders are behind, not building as many homes as they did in the previous 10 years (5.8 million homes built since 2010, versus 27 million homes built from 2000-2010).


Supply and demand........simple.

The problem is the lack of starter homes. They were all bought up by huge investment firms between 2009 - 2014.

Did you know that they are building master planned communities now and not selling the homes, they are renting them?? The rental market is even more insane then the housing market. These renter only communities will be causes of even more constricted supply.

Housing crash bros continue and will continue to be wrong. A crash by end of summer 2022? Where do you even come up with that and based on what??

I see just what you are talking about. But, if the next generation continues to rent for their total lives they are more foolish then I give them credit for…

 

[LargeOrangeFont]

I see just what you are talking about. But, if the next generation continues to rent for their total lives they are more foolish then I give them credit for…

They will own nothing and like it.

 

[BingerFang]

They will own nothing and like it.

The only thing they will own is a NFT

 

[hallett21]

Los Angeles starter home.

21907 Providencia St, Woodland Hills, CA 91364 - 2 beds/1 bath

(TheMLS) For Sale: 2 beds, 1 bath ∙ 1026 sq. ft. ∙ 21907 Providencia St, Woodland Hills, CA 91364 ∙ $995,000 ∙ MLS# 22-163467 ∙ Looking for your perfect home with that neighborhood feeling? Look no further!...

www.redfin.com

 

[Runs2rch]

They will own nothing and like it.

The same group that leases a new vehicle every year.

 

[Runs2rch]

Los Angeles starter home.

21907 Providencia St, Woodland Hills, CA 91364 - 2 beds/1 bath

(TheMLS) For Sale: 2 beds, 1 bath ∙ 1026 sq. ft. ∙ 21907 Providencia St, Woodland Hills, CA 91364 ∙ $995,000 ∙ MLS# 22-163467 ∙ Looking for your perfect home with that neighborhood feeling? Look no further!...

www.redfin.com

Check Reseda it is even worse.

 

[LargeOrangeFont]

Los Angeles starter home.

21907 Providencia St, Woodland Hills, CA 91364 - 2 beds/1 bath

(TheMLS) For Sale: 2 beds, 1 bath ∙ 1026 sq. ft. ∙ 21907 Providencia St, Woodland Hills, CA 91364 ∙ $995,000 ∙ MLS# 22-163467 ∙ Looking for your perfect home with that neighborhood feeling? Look no further!...

www.redfin.com

There’s yore problem.. everyone wants a well appointed freshly remodeled “starter home”.

 

[hallett21]

Check Reseda it is even worse.

I just zoomed out. It’s nuts. I found one for 800k. Not sure there’s a home with a 7 as the first digit.

 

[LargeOrangeFont]

The same group that leases a new vehicle every year.

Yep.

 

[Runs2rch]

I just zoomed out. It’s nuts. I found one for 800k. Not sure there’s a home with a 7 as the first digit.

My wife and I keep saying to each other. Who is paying these prices???!!!

 

[hallett21]

There’s yore problem.. everyone wants a well appointed freshly remodeled “starter home”.

I zoomed out for pretty much the entire San Fernando valley. Here’s the list low to high. There are 6 below at 799 and then they go into the 8s

 

[Bpracing1127]

When you have a condo in Santa Ana that is less than 800 sq fr going for over 400k. You have a problem. Not sure what the problem will cause. But most millennials can’t afford a home in so cal thus they rent. So to say that generation is entering is half foolish.

 

[Boatymcboatface]

Not to sound smarter than everyone else.. but my brother was buying at the time a manufactured home in a neighborhood of vista. It was 470k..

I told him, I dunno shit about real estate but a cheeseburger is about a buck (at the time) and that ain’t worth 470,000 cheeseburgers.. lol.

He made charts and all the shit nerds do, told me I’m an idiot and I’ll never understand..

He finally got out of that piece of shit and into a normal house five or so years ago. Lol.

I rented until 2011.. I graduated high school in 1994. You can do the math on that.. if things didn’t drop then I’d still be Renting.

In 2011 my budget for a house was 200k. At that time you could buy a new 3/2 with a pool for that price or a new 3/2 with an rv garage.. but to get both you were in the 3’s..

Realtors etc said just put in a pool they are 30 grand! I kept saying I’m moving here with no job and no income.. when am I ever gonna do that?

My house was listed for 364.. waaayy out of my budget. The market was so depressed out here if I liked the house I’d offer 50k low and if the house was “ok” I’d offer a 100k low..

Ended up getting my house for 310k, and lived very house poor for years. We didn’t even have a tv in my house for the first year or two.. and we had patio furniture in the dining room.

Anyhow I figured my house 4/4 rv garage : pool / lake view reverse corner lot etc was worth the 310,000 cheeseburgers..

Our mortgage was 1200 bucks a month and I can’t tell you how many months we had to beg borrow money to pay it. Doing bullshit machining jobs for Pennie’s on the dollar just to make the nut.

My wife just bought a 415,000 dollar lot up in the foothills and it scares the ever living shit out of me.. I know I could sell it right now and probably make 150-200k on it.. the build cost of developing an acre though is gonna be monstrous.. it’s what she wants though, and I’ll rewind ya to my original budget and how we ended up with something over 50% more than the original budget.. lol. Stacy gets what she wants.

And fuck it.. if I lose it all I can go get it again. So long as I keep this network alive we will be alright in just about any circumstance.

RD

I was in almost this exact same position and people told me to buy! 1bd 1bth 500sqft condo in mission Viejo for 450k I said nope that’s just nuts! Changed jobs and thought I’d never buy a house the 08 came and made the same type of offers our budget was 325k MAX! Anyways we ended up with a 4bd 3bth 1/4acre with pool and 3 car garage. We only had the furniture from our one bedroom beach apartment we lived in the downstairs guest room and only had stuff for the kitchen and dinning room! We lived that way for the 1st couple years and didn’t even have flooring downstairs just the exposed slab!

We couldn’t afford the patio furniture for the living room but would set up a beer pong table in there when we had guests!

If people came over for a pool party we let them know if they wanted somewhere to sit to bring a chair!

 

[Looking Glass]

They will own nothing and like it.

How many people will Never own their Vehicle, Boat, or R-V outright and paid off, just rolling over loans and be making payments for their entire lives?

 

[badgas]

Not to sound smarter than everyone else.. but my brother was buying at the time a manufactured home in a neighborhood of vista. It was 470k..

I told him, I dunno shit about real estate but a cheeseburger is about a buck (at the time) and that ain’t worth 470,000 cheeseburgers.. lol.

He made charts and all the shit nerds do, told me I’m an idiot and I’ll never understand..

He finally got out of that piece of shit and into a normal house five or so years ago. Lol.

I rented until 2011.. I graduated high school in 1994. You can do the math on that.. if things didn’t drop then I’d still be Renting.

In 2011 my budget for a house was 200k. At that time you could buy a new 3/2 with a pool for that price or a new 3/2 with an rv garage.. but to get both you were in the 3’s..

Realtors etc said just put in a pool they are 30 grand! I kept saying I’m moving here with no job and no income.. when am I ever gonna do that?

My house was listed for 364.. waaayy out of my budget. The market was so depressed out here if I liked the house I’d offer 50k low and if the house was “ok” I’d offer a 100k low..

Ended up getting my house for 310k, and lived very house poor for years. We didn’t even have a tv in my house for the first year or two.. and we had patio furniture in the dining room.

Anyhow I figured my house 4/4 rv garage : pool / lake view reverse corner lot etc was worth the 310,000 cheeseburgers..

Our mortgage was 1200 bucks a month and I can’t tell you how many months we had to beg borrow money to pay it. Doing bullshit machining jobs for Pennie’s on the dollar just to make the nut.

My wife just bought a 415,000 dollar lot up in the foothills and it scares the ever living shit out of me.. I know I could sell it right now and probably make 150-200k on it.. the build cost of developing an acre though is gonna be monstrous.. it’s what she wants though, and I’ll rewind ya to my original budget and how we ended up with something over 50% more than the original budget.. lol. Stacy gets what she wants.

And fuck it.. if I lose it all I can go get it again. So long as I keep this network alive we will be alright in just about any circumstance.

RD

That is a great story hustle, patience and wisdom.

The new lot and build is the same concept just WAY more cheeseburgers. If it scares you there is a reason.

Just do it with realistic levels of debt so you don't get tossed off the roller coaster.

 

[86403]

How many people will Never own their Vehicle, Boat, or R-V outright and paid off, just rolling over loans and be making payments for their entire lives?

Must be time for another creating wealth thread

 

[beerrun]

So I favorite low a few truck forums to stay up to date on the status of my order.

There are more than a few guys worried about interest rates and they may not be able to afford the truck they ordered.

Some have mentioned due to the gas prices they are not going to go through with the purchase or are second guessing themselves.


Str8uptoytrader has lots of RV’s for sale lately and the prices aren’t as crazy. Normally I would blame it on riding season is over. But allot of the units are 2020-21 models. So I’m thinking people are getting rude awakenings.

House prices buy me continue to rise. We will see.

Have a friend that owns a Ford dealership i won't say where but I called him to buy a new chevy 2500 and he came back at 80k I said thanks but no he said prices will be coming down in the next 12-18 months

 

[FROGMAN524]

As a millennial myself, I can say most of the people I know in my age bracket have no issue renting and leasing their entire lives. Owning things is for Boomers and Gen X'rs in their opinion hence why you see so many apartment buildings going up around Phoenix and I'm sure the greater country. I only know one other person in my age bracket who owns a boat and they are by far the exception in my opinion. Most millennials care more about travelling abroad, going to concerts and bars and playing video games than they do anything with a roof or wheels or props. Getting married, buying a house, 2 cars and having a couple kids isn't their first priority, at least in their twenties and thirties. They are waiting much longer for these things if they do them at all.

Phoenix is overrun with Californians, Northwesterners and Midwesterners who are fleeing housing prices and liberal policies while at the same time turning this place into what they just left. Starter homes here are no longer in the $150,000-$250,000 range like they were 10 years ago; more like $450,000 for re-sales and $750,000 for new builds depending on what part of the valley you're in. Queen Creek, which used to be the cheapest part of the valley, now has Pulte building 2,000 square foot, 3/2 homes starting at $950,000.

 

[BHC Vic]

I’m a millennial. I’m happy my wish pushed me out of my comfort zone in 2010 to buy our first home. That set us up for where we are today. We have an 800k dollar home (really 600k) I make 150k a year but we put a lot down. Wife makes over 100 as well so we are lucky

 

[Done-it-again]

Have a friend that owns a Ford dealership i won't say where but I called him to buy a new chevy 2500 and he came back at 80k I said thanks but no he said prices will be coming down in the next 12-18 months

First problem was trying to buy a Chevy at a Ford dealership!

 

[LargeOrangeFont]

How many people will Never own their Vehicle, Boat, or R-V outright and paid off, just rolling over loans and be making payments for their entire lives?

Millions. They have been trained that experience > things their entire life.

That is fine with me if that is how they want to live.

 

[monkeyswrench]

Millions. They have been trained that experience > things their entire life.

That is fine with me if that is how they want to live.

Exactly true. If people want to make payments, their choice. It's when people stop making payments there's an issue. To each their own on that end of it.

 

[PaPaG]

Not sure who follows the market but the signs are here and only going to get louder...with feds increasing rates and talking about going 1/2 a point or more each meeting for the next 12 months home sales will tank for folks needing loans and slow for cash buyers. Cash buyers or should I say SMART Cash Buyers will be sitting on the sideline waiting to grab the deals as the market corrects...

 

[BingerFang]

Not to sound smarter than everyone else.. but my brother was buying at the time a manufactured home in a neighborhood of vista. It was 470k..

I told him, I dunno shit about real estate but a cheeseburger is about a buck (at the time) and that ain’t worth 470,000 cheeseburgers.. lol.

He made charts and all the shit nerds do, told me I’m an idiot and I’ll never understand..

He finally got out of that piece of shit and into a normal house five or so years ago. Lol.

I rented until 2011.. I graduated high school in 1994. You can do the math on that.. if things didn’t drop then I’d still be Renting.

In 2011 my budget for a house was 200k. At that time you could buy a new 3/2 with a pool for that price or a new 3/2 with an rv garage.. but to get both you were in the 3’s..

Realtors etc said just put in a pool they are 30 grand! I kept saying I’m moving here with no job and no income.. when am I ever gonna do that?

My house was listed for 364.. waaayy out of my budget. The market was so depressed out here if I liked the house I’d offer 50k low and if the house was “ok” I’d offer a 100k low..

Ended up getting my house for 310k, and lived very house poor for years. We didn’t even have a tv in my house for the first year or two.. and we had patio furniture in the dining room.

Anyhow I figured my house 4/4 rv garage : pool / lake view reverse corner lot etc was worth the 310,000 cheeseburgers..

Our mortgage was 1200 bucks a month and I can’t tell you how many months we had to beg borrow money to pay it. Doing bullshit machining jobs for Pennie’s on the dollar just to make the nut.

My wife just bought a 415,000 dollar lot up in the foothills and it scares the ever living shit out of me.. I know I could sell it right now and probably make 150-200k on it.. the build cost of developing an acre though is gonna be monstrous.. it’s what she wants though, and I’ll rewind ya to my original budget and how we ended up with something over 50% more than the original budget.. lol. Stacy gets what she wants.

And fuck it.. if I lose it all I can go get it again. So long as I keep this network alive we will be alright in just about any circumstance.

RD

I don’t know shit about real estate but a cheese burger is $2.29 at McDonald’s and I don’t think a lot in Havasu is worth 181,222 cheese burgers…..

 

[hallett21]

Not sure who follows the market but the signs are here and only going to get louder...with feds increasing rates and talking about going 1/2 a point or more each meeting for the next 12 months home sales will tank for folks needing loans and slow for cash buyers. Cash buyers or should I say SMART Cash Buyers will be sitting on the sideline waiting to grab the deals as the market corrects...

But as interest rates rise and theoretically housing prices fall the monthly payment (relatively) stays the same.

I would think we would see housing prices continue to rise until summer of 2023. Equity only maters if you’re selling. The interest rate though could get brutal.

With inventory being so low I don’t see how the entire buyer market will just sit on the sidelines waiting.

 

[OldSchoolBoats]

Not sure who follows the market but the signs are here and only going to get louder...with feds increasing rates and talking about going 1/2 a point or more each meeting for the next 12 months home sales will tank for folks needing loans and slow for cash buyers. Cash buyers or should I say SMART Cash Buyers will be sitting on the sideline waiting to grab the deals as the market corrects...

My buddy is a Mortgage Banker in Florida and he said that the % of cash buyers has been growing steadily and continues to grow.

And your statement of "waiting to grab the deals as the market corrects".......... I just don't understand this ideology. So lets assume that the market corrects 10%, which would be a pretty big correction, all that is doing is wiping out half the gains from last year. So why didn't that SMART money just buy last year??

 

[LargeOrangeFont]

My buddy is a Mortgage Banker in Florida and he said that the % of cash buyers has been growing steadily and continues to grow.

And your statement of "waiting to grab the deals as the market corrects".......... I just don't understand this ideology. So lets assume that the market corrects 10%, which would be a pretty big correction, all that is doing is wiping out half the gains from last year. So why didn't that SMART money just buy last year??

This. Smart money that is in for the medium to longer term is always buying if it makes sense. Generally speaking and taking natural disasters out of the equation, how many times in history did anyone lose money in RE over 10 years? Even almost all that bought in 06 were at least breaking even by 2016 and have massive equity 17 years later.

 

[TPC]

I've lived through a few recessions and the signs are there.
I'm sure inflation and gas prices have a lot to do with it.
But:

Suddenly that $800 tree trimming job that I had a hard time getting anyone to do is $200 with guys begging for the job.
Hotel rooms are much easier to get anytime we want and discounted.
Masonry work crews I know were backed up a year,, now hand to mouth work.

 

[beerrun]

First problem was trying to buy a Chevy at a Ford dealership!

Haha he owns both

 

[Cdog]

I'm sure inflation and gas prices have a lot to do with it.
But:

Suddenly that $800 tree trimming job that I had a hard time getting anyone to do is $200 with guys begging for the job.
Hotel rooms are much easier to get anytime we want and discounted.
Masonry work crews I know were backed up a year,, now hand to mouth work.

funny you mention that. for the first time since covid I received a harbor freight and tool 25% off anything in the store coupon yesterday.

It’s happening

 

[PaPaG]

My buddy is a Mortgage Banker in Florida and he said that the % of cash buyers has been growing steadily and continues to grow.

And your statement of "waiting to grab the deals as the market corrects".......... I just don't understand this ideology. So lets assume that the market corrects 10%, which would be a pretty big correction, all that is doing is wiping out half the gains from last year. So why didn't that SMART money just buy last year??

Cash buyers are going to be slowing down all over the country as rates go up, when rates go up then there are less available buyers, prices stall and then go down, cash buyers will slow following mortgage buyers. Anyone that thinks these inflated housing prices are going to last has not followed history. Time will tell. As far as the the housing market goes I consider a 20-25% correction in the housing market as a true correction because of the ridiculous increases this past few years, that would be the case for a lot of smart money sitting on the sideline as if fact right now to cause buying for investments, 10% correction in the stock market gets smart money buying in my book, as long as we are not a huge downturn that is when smart money starts buying again. (Just My Opinion). Also, according to some of the biggest and most successful fund and money managers wall street smart money is pulling out big time right now and going to increase and sit in cash and other investments expecting a huge drop...so we will see what happens....

 

[TPC]

funny you mention that. for the first time since covid I received a harbor freight and tool 25% off anything in the store coupon yesterday.

It’s happening

Oh Yeah.
I was going to mention that too.
HF is sending discount emails once again.
When it's a everything in the store coupon then we've hit bottom.

 

[LargeOrangeFont]

funny you mention that. for the first time since covid I received a harbor freight and tool 25% off anything in the store coupon yesterday.

It’s happening

I was pissed when they got rid of those.

 

[PaPaG]

But as interest rates rise and theoretically housing prices fall the monthly payment (relatively) stays the same.

I would think we would see housing prices continue to rise until summer of 2023. Equity only maters if you’re selling. The interest rate though could get brutal.

With inventory being so low I don’t see how the entire buyer market will just sit on the sidelines waiting.

I wish they keep rising til summer of 2023 but I think by 3rd quarter or end of this year we are going to be a lot more buyers on the sidelines waiting for corrections. I fear the interest rate is going to ruin the uptrend and time will tell if my fear is correct or not. My dad always said it does not matter what you paid or pay for your home as long as you buy it with the intent of living there for a long term or your forever home, but as an investment watch the market trend and direction of the interest rates..

 

[PaPaG]

I've lived through a few recessions and the signs are there.
I'm sure inflation and gas prices have a lot to do with it.
But:

Suddenly that $800 tree trimming job that I had a hard time getting anyone to do is $200 with guys begging for the job.
Hotel rooms are much easier to get anytime we want and discounted.
Masonry work crews I know were backed up a year,, now hand to mouth work.

EXACTLY!, the writing is on the wall.

 

[LargeOrangeFont]

Cash buyers are going to be slowing down all over the country as rates go up, when rates go up then there are less available buyers, prices stall and then go down, cash buyers will slow following mortgage buyers. Anyone that thinks these inflated housing prices are going to last has not followed history. Time will tell. As far as the the housing market goes I consider a 20-25% correction in the housing market as a true correction because of the ridiculous increases this past few years, that would be the case for a lot of smart money sitting on the sideline as if fact right now to cause buying for investments, 10% correction in the stock market gets smart money buying in my book, as long as we are not a huge downturn that is when smart money starts buying again. (Just My Opinion). Also, according to some of the biggest and most successful fund and money managers wall street smart money is pulling out big time right now and going to increase and sit in cash and other investments expecting a huge drop...so we will see what happens....

The other side of the coin is that in another 10 years you will likely look back on these current prices fondly. A 25% housing drop brings us back to pre pandemic levels, when everyone said those prices were unsustainable.

Anyone buying for an investment knows time in the RE market is probably better than trying to time the market. That said, there are now obvious headwinds right now that may cause pause. I don't think everything is going to fall apart in 9 months, but things are starting to turn.

 

[Your ad here]

@PaPaG How have 7.3 sales been doing? Buyers still paying a premium or have prices come down? That right there will tell us which way the market is going.

 

[D19]

The housing bubble is going to blow up by the end of summer 22. Some are going to make money and some are going to lose everything. Already seeing the starts of foreclosures and high end money is getting harder to get. The first sign you'll see is when your favorite restaurant is half full.

Yes and if you look at the majority of REO that is active or closed 0-180 days back in LA County was north of $1,000,000.

 

[badgas]

We will always go up and down and none of us can time it.

Everyone says " smart money " pulling out of the market and waiting ?

Where are they parking the " Smart Money " ? Cash ? I hope not with the inflation we are having. Bitcoin ? Bonds ? Not real estate because they are smart so they know a correction is coming ?

The LARGE majority of fund mangers do NOT beat the S&P so why do we call them " Smart " They are smart because they make billions on fees not because they have a great strategy.


Rremeber I said the majority not all of them. Just like the majority of athletes are not Michael Jordon or Tom Brady.

The smart money stays invested

Here are 87 reasons why people did not stay invested in the market

1934 Depression
1935 Spanish Civil War
1936 Economy Still Struggling
1937 Recession
1938 War Clouds Gather
1939 War in Europe
1940 France Falls
1941 Pearl Harbor
1942 Wartime Price Controls
1943 Industry Mobilizes
1944 Consumer Goods Shortages
1945 Post-War Recession on Predicted
1946 Dow Tops 20 - Market Too High
1947 Cold War Begins
1948 Berlin Blockade
1949 Russia Explodes A-Bomb
1950 Korean War
1951 Excess Profits Tax
1952 U.S. Seizes Steel Mill
1953 Russia Explodes H-Bomb
1954 Dow Tops 360 - Market Too High
1955 Eisenhower Illness
1956 Suez Crisis
1957 Russia Launches Sputnik
1958 Recession
1959 Castro Seizes Power in Cuba
1960 Russia Downs U-2 Plane
1961 Berlin Wall Erected
1962 Cuban Missile Crisis
1963 Kennedy Assassinated
1964 Gulf of Tonkin
1965 Civil rights Marches
1966 Vietnam War Escalates
1967 Newark Race Riots
1968 USS Pueblo Seized
1969 Money Tightens - Markets Fall
1970 Cambodia Invaded - Vietnam War Spreads
1971 Wage Price Freeze
1972 Largest U.S. Trade Deficit Ever
1973 Energy Crisis
1974 Watergate
1975 Resource Shortages
1976 Limit to Long-Term Growth
1977 Inflation Increases
1978 Interest Rates Rise
1979 Oil Prices Skyrocket
1980 Interest Rates at All-Time Highs
1981 Steep Recession Begins
1982 Worst Recession in 40 Years
1983 Market Hits New Highs
1984 Record Federal Deficits
1985 Economic Growth Slows
1986 Dow Nears 2000 - Market Too High
1987 Market Declines 20% in One Day
1988 Savings and Loan Crisis
1989 Bank Failures Increase
1990 Persian Gulf Crisis
1991 Dow Tops 3000 - Market Too High
1992 Global Recession
1993 Health Care Reform
1994 Mexican Peso Devaluation
1995 S&P 500 Index Tops 620 - Market Too High
1996 Greenspan Warns of "Irrational Exuberance"
1997 Asian Financial Crisis
1998 Russian Currency Devaluation
1999 Presidential Impeachment
2000 Dot-Com Meltdown
2001 Terrorist Attack on World Trade Center
2002 Corporate Malfeasance
2003 War in Iraq
2004 Decline of the Dollar
2005 Hurricane Katrina
2006 Rising Gas Prices
2007 Subprime Mortgage Crisis
2008 Credit Crunch
2009 Collapse of Financial Institutions
2010 European Crisis- Greece
2011 Downgrade of U.S. Debt
2012 Political Polarization in the U.S.
2013 Interest Rates Doubled
2014 Cheaper Oil & a Stronger Dollar
2015 China Growth Slows
2016 Donald Trump elected U.S. President
2017 Geopolitical Tensions with North Korea
2018 Trade War
2019 Trump Impeachment
2020 Coronavirus


HISTORY REVISITED

$1 MILLION INVESTED IN THE S&P 500 AT THE BEGINNING OF 1935 WOULD BE WORTH OVER $9.1 BILLION AT THE END OF 2020

 

[Cdog]

Some of my thoughts about all of this.

It's a function of our business cycle here in the US. Conditions are made by the powers at be to loosen up lending or make it cheaper, homeowners are the foundation of consumer spending that stimulates the economy. This begins a buy, renovate, sell & trade Ponzi like scheme until too many people are doing it and or nobody can afford to keep doing it. Boom, bust, rinse & repeat.

It will continue to happen. Position yourself correctly, don't get too cocky, buy at the right time and sell at the right time. Real estate is commodity. Your needs for it change though life so hop on at the right time and off at the right time.

 

[LargeOrangeFont]

Some of my thoughts about all of this.

It's a function of our business cycle here in the US. Conditions are made by the powers at be to loosen up lending or make it cheaper, homeowners are the foundation of consumer spending that stimulates the economy. This begins a buy, renovate, sell & trade Ponzi like scheme until too many people are doing it and or nobody can afford to keep doing it. Boom, bust, rinse & repeat.

It will continue to happen. Position yourself correctly, don't get too cocky, buy at the right time and sell at the right time. Real estate is commodity. Your needs for it change though life so hop on at the right time and off at the right time.

The end.

 

[Cdog]

Everyone says " smart money " pulling out of the market and waiting ?

Where are they parking the " Smart Money " ? Cash ? I hope not with the inflation we are having. Bitcoin ? Bonds ? Not real estate because they are smart so they know a correction is coming ?

The LARGE majority of fund mangers do NOT beat the S&P so why do we call them " Smart " They are smart because they make billions on fees not because they have a great strategy.


Rremeber I said the majority not all of them. Just like the majority of athletes are not Michael Jordon or Tom Brady.

The smart money stays invested

The counter to "Inflation" panic is the fact that it will deflate when the cycle moves on. Supply and demand dynamics of today will change.

Damn near everything you're told on those shows is propaganda. Hold steady so the big boys can get out while you go down with the ship. Remember the "consumer class & investor class" titles from the 2000's? They see you as a child taking your spoon full of sugar so the medicine goes down.

 

[PaPaG]

@PaPaG How have 7.3 sales been doing? Buyers still paying a premium or have prices come down? That right there will tell us which way the market is going.

So far stable, a bit of a drop for 150-175k mile units, super high prices that I doubt will drop a lot for ones with under 80k miles and in great condition, but I have my eye on 2 of them right now, dropped by 2k on one and 3k on the other so far and dropping slowly. Diesel prices will have an effect soon if not already for daily drivers.

 

[LargeOrangeFont]

We will always go up and down and none of us can time it.

Everyone says " smart money " pulling out of the market and waiting ?

Where are they parking the " Smart Money " ? Cash ? I hope not with the inflation we are having. Bitcoin ? Bonds ? Not real estate because they are smart so they know a correction is coming ?

The LARGE majority of fund mangers do NOT beat the S&P so why do we call them " Smart " They are smart because they make billions on fees not because they have a great strategy.


Rremeber I said the majority not all of them. Just like the majority of athletes are not Michael Jordon or Tom Brady.

The smart money stays invested

Here are 87 reasons why people did not stay invested in the market

1934 Depression
1935 Spanish Civil War
1936 Economy Still Struggling
1937 Recession
1938 War Clouds Gather
1939 War in Europe
1940 France Falls
1941 Pearl Harbor
1942 Wartime Price Controls
1943 Industry Mobilizes
1944 Consumer Goods Shortages
1945 Post-War Recession on Predicted 1946 Dow Tops 20 - Market Too High 1947 Cold War Begins
1948 Berlin Blockade
1949 Russia Explodes A-Bomb
1950 Korean War
1951 Excess Profits Tax
1952 U.S. Seizes Steel Mill
1953 Russia Explodes H-Bomb
1954 Dow Tops 360 - Market Too High 1955 Eisenhower Illness
1956 Suez Crisis
1957 Russia Launches Sputnik
1958 Recession
1959 Castro Seizes Power in Cuba 1960 Russia Downs U-2 Plane
1961 Berlin Wall Erected
1962 Cuban Missile Crisis
1963 Kennedy Assassinated
1964 Gulf of Tonkin
1965 Civil rights Marches
1966 Vietnam War Escalates
1967 Newark Race Riots
1968 USS Pueblo Seized
1969 Money Tightens - Markets Fall
1970 Cambodia Invaded - Vietnam War Spreads 1971 Wage Price Freeze
1972 Largest U.S. Trade Deficit Ever 1973 Energy Crisis
1974 Watergate
1975 Resource Shortages
1976 Limit to Long-Term Growth 1977 Inflation Increases
1978 Interest Rates Rise
1979 Oil Prices Skyrocket
1980 Interest Rates at All-Time Highs 1981 Steep Recession Begins
1982 Worst Recession in 40 Years 1983 Market Hits New Highs
1984 Record Federal Deficits
1985 Economic Growth Slows
1986 Dow Nears 2000 - Market Too High 1987 Market Declines 20% in One Day 1988 Savings and Loan Crisis
1989 Bank Failures Increase
1990 Persian Gulf Crisis
1991 Dow Tops 3000 - Market Too High
1992 Global Recession
1993 Health Care Reform
1994 Mexican Peso Devaluation
1995 S&P 500 Index Tops 620 - Market Too High 1996 Greenspan Warns of "Irrational Exuberance" 1997 Asian Financial Crisis
1998 Russian Currency Devaluation
1999 Presidential Impeachment
2000 Dot-Com Meltdown
2001 Terrorist Attack on World Trade Center
2002 Corporate Malfeasance
2003 War in Iraq
2004 Decline of the Dollar
2005 Hurricane Katrina
2006 Rising Gas Prices
2007 Subprime Mortgage Crisis
2008 Credit Crunch
2009 Collapse of Financial Institutions
2010 European Crisis- Greece
2011 Downgrade of U.S. Debt
2012 Political Polarization in the U.S.
2013 Interest Rates Doubled
2014 Cheaper Oil & a Stronger Dollar
2015 China Growth Slows
2016 Donald Trump elected U.S. President
2017 Geopolitical Tensions with North Korea 2018 Trade War
2019 Trump Impeachment
2020 Coronavirus


HISTORY REVISITED

$1 MILLION INVESTED IN THE S&P 500 AT THE BEGINNING OF 1935 WOULD BE WORTH OVER $9.1 BILLION AT THE END OF 2020

Exactly. Smart money is time in the markets.

 

[attitude]

The other side of the coin is that in another 10 years you will likely look back on these current prices fondly. A 25% housing drop brings us back to pre pandemic levels, when everyone said those prices were unsustainable.

Anyone buying for an investment knows time in the RE market is probably better than trying to time the market. That said, there are now obvious headwinds right now that may cause pause. I don't think everything is going to fall apart in 9 months, but things are starting to turn.

If the housing market drops to pre pandemic prices houses would still be a better deal than 3 years ago because inflation has been close to 10%.

 

[LargeOrangeFont]

@PaPaG How have 7.3 sales been doing? Buyers still paying a premium or have prices come down? That right there will tell us which way the market is going.

I don’t know that it is. Older cars prices are being held up by increasing new car MSRP. MSRPs are not going to go down.

 

[LargeOrangeFont]

If the housing market drops to pre pandemic prices houses would still be a better deal than 3 years ago because inflation has been close to 10%.

In theory sure. In practice not so much. And if housing drops, that means inflation is going to be going down soon after or in parallel.

 

[attitude]

In theory sure. In practice not so much. And if housing drops, that means inflation is going to be going down soon after or in parallel.

I haven’t seen a downturn in inflation in my adult lifetime, not saying it hasn’t happened though. Do you really think inflation will drop by 10%?