Posted on 02/17/2022 7:16:48 AM PST by Az Joe
A shockingly large price bubble appears to have formed in the real estate market.
Although it’s impossible to predict economic crashes with certainty, a key economic indicator suggests the U.S. housing market is on the verge of an unprecedented crash, one that could end up being the biggest in America’s history.
The big difference this time is the lack of demand and the huge oversupply of commercial property. Empty malls, strip malls, office buildings, restaurants, etc brought on by Covid policies will double the impact to the banks and private lenders.
Yes, but the government will probably once again try to stop the natural market correction with interference, which will just make matters worse, again.
Nice cover clause there...
At least it's out there just in case it happens, then it makes him a prophet/maven.
If it doesn't, the the clause kicks in.
BTW, what goes up must come down. One would just hope that it's an orderly retreat so people can have time to make some moves if desired.
Since mid-2020, I suspect anyone who was even thinking of relocating or downsizing in the next 5-6 years put their homes on the market and moved. Inventories are limited and prices are high because nobody needs to sell for a while now.
“There are no properties for sale within 7 miles of my house.”
Thinking that the local real estate market in Florida (or Texas, or Arizona) is typical of the nation is a mistake.
The comments above buying into this sadden me. First of all, market timing only works by coincidence. And, real estate is unique as an investment because it is unique. It doesn’t become obsolete or out of style. Technological advances in design and construction are just a part of the process and for the most part are not actually important. My 100 year old house costs about $200/month more to heat, cool and illuminate as the equivalent 2022 model Big deal /s.
Interest rates are about all that matters. And, all the players today don’t give a crap about inflation so don’t expect any 12% mortgage rates to repeat the 1980 debacle. And, if you know anything about 2010 you know it was caused by liberal democrat insistence forcing banks to make bad loans.
“Thinking that the local real estate market in Florida (or Texas, or Arizona) is typical of the nation is a mistake.”
You are overthinking my statement.
...and importing millions of illegal third world aliens getting free housing is not helping.
Right now, they can’t build them fast enough in Florida to keep up with the demand from those fleeing the great blue north. If the northerners can’t sell their home in Michigan or New York they will stop moving to Florida. That will mean that the only ones moving to Florida are the liberal elitists. That wouldn’t be good. We’ll take the truckers, plumbers, electricians, and other workers finally fed up. The ivy league blue bloods can stay put.
“I don’t buy this.
There is currently a huge imbalance between supply and demand for real estate.
That is, there are way more people looking to buy houses than there are houses.
This comes as a result of 10 years of underbuilding.”
Not only that, but the price of building material and labor to build new house is through the roof.
I went to buy a 12ft piece of treated wood yesterday (2x12) it was $53!! I was shocked.
“It’s going to suck mightily too. At the same time that housing sales completely tank the home rental market costs will sky rocket.”
So with the prices in a free fall and the rents sky high, I’m assuming you’ll take advantage of such a great opportunity, and start buying houses and rent them out, right? And many others will do the same, right.
What will that do to the price of houses?
There’s also another counter argument to this housing gloom and doom. If you’re a renter paying sky high rent and watching it go up every year while housing prices tank, might you consider buying one of those bargain houses?
We are in the process of buying a house. Inventory is minimal. Got outbid on one, knew the next couple would be the same. Cash was the name of the game or no contingencies. We are buying a new build. Locked in the interest rate and it should be finished end of March. Barring anything unforeseen, we have a house. It will be our home so bubble, or not, we will pay the mortgage and enjoy our place.
Biden Administration: C’mon man! nobody needs a $1.55 million house let alone a $5 million one. That’s just white privilege. I am sending VP Harris to your neighborhood next week to get to the root cause of this.
There’s a great reset going on. Drive up housing prices so no one can afford their property taxes, and you have us all living in equal apartments and liking it.
Drive up gas prices, and new car prices, by limiting supply and we are all in electric cars or on buses and bicycles and we will like it.
We will own nothing and like it.
I have some rentals and I’ve lost several tenants because they could pay for a house for what they paid for rent.
In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis.
From: https://en.wikipedia.org/wiki/Federal_funds_rate
The prices of homes were artificially inflated years ago to for nefarious Fed government schemes and also bring more taxes for local governments.
The cost of homes and vehicles have risen ridiculously out of the payoff reach of most people.
The bubbles bursting will be painful on many. But might need to happen.
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