Hi everyone. What are you doing to prepare for a downturn in the real estate market? This discussion is meant mostly for people that survived the 2007-09 real estate debacle.
I genuinely believe that Federal Reserve is raising rates too fast and at rapid rates. Commercial loans might see a problem in 5 years when adjustments are made. Variable rates on HELOCS and other items are rapidly going up. Wages are going up slightly with inflation.
Also - when Many tenants and homeowners only had a few years or months to recover. Many haven't recovered and continue to rent. Many are getting into bad situations now with 3% down and other situations. These are potential short sale situations and/or foreclosures if they lose their job.
It seems when times are going well it seems the Federal Reserve puts the brakes on the economy and starts to raise rates to reduce the money supply. This can only hurt homeowners directly that lose their jobs (but not landlords with fixed loans).
I have a feeling this is going to occur over and over again in the next 50 years just as it had in the past and recent past. I think being conservative is the best course of action right now. I like Jay Hinrich's point of view.
Personally, I am saving cash on the sidelines right now and I feel there will be much more opportunities to buy in the next few years. It is very hard when you are young and you need to buy risk assets now but you need to have that balance. It's very hard not to buy in an increasing market but I do feel we are at a turning point.
So - investors that survived 2009 what are you doing right now that younger people should take heed to?