If housing does crash, you can bet Blackrock and the other lefty groups will be sucking up the housing stock at basement bottom prices under the direction of Dr. Evil (aka, Klaus Schwaub) and the World Economic Forum.
I have a genuine question on this:
How exactly can THIS housing bubble be worse that 2008?
1) 2008 had millions of people in ARMs, resulting in defaults all over the place - not so many today
2) 2008 had MBS’s that killed other investors - they’re still around today, but see #1
3) 2008 had oversupply - not nearly as bad today; the shock to Construction will be much lower
4) 2008 had flippers all over the place - not as bad today
5) 2008 had no BlackRock with power and an interest in cushioning the blow (no, not saying that’s a net good thing)
Yes, I know that prices have soared relatively higher than 2006-8. Not saying it won’t be bad. Some people in a few months will wake up and see they’re underwater. This will depress consumer spending in many ways.
But not nearly as many ways as 15%-20% Inflation and the subsequent painful Deflation, as well as a 50% S&P drop.
Like Ukraine/Putin and Covid, this seems like COVER for the post-Inflation Deflationary Great Biden Depression that’s coming.
Need help here. I’m listening.
He may be wrong, due to part of the nature of the housing bubble this time versus last time.
In the run up to the housing price bubble last time much of the price increases had little to do with lack of availability. This time avialability is way down as regardless of pricing building has not been keeping up with demand for a number of years now.
If the bubble were due only to loose money it could produce the same fallou as the last housing bubble. But this bubble is different in terms of the supply versus demand factors and the type-of-mortgages being made factors (not anywhere near as loose as in the last bubble).
Who is likely to get hit first are sellers, not the banks, as interest rates will have buyers backing off unless the sellar lowers their price. We could begin to see the price-divide between existing and new homes changing as sellers of older homes feel the need to lower price expectations to get buyers but builders of new units are stuck with today’s higher building costs. I think the price divide between existing and new homes is larger today than in the run up to the last housing bubble. And low inventory of new homes is a bigger part of this bubble than the last.