You have 6 months to liquidate your assets

[Thor Sveinbjoernsson]

I’ve been doing a lot of research lately and I wanted to share with you guys what I have found about the correlation between unemployment, delinquencies and housing prices. During the 2008 housing crisis the housing market bottomed about 2 years after the peak in delinquencies. Note that delinquencies are very much so correlated with unemployment rates (see graph on link below). Unemployment is already about twice the peak in 2008 so it is very likely that delinquencies will follow, which will lead to increased supply of housing.

See data here, gathered by stanford researches: https://web.stanford.edu/~pavelkr/jmp_slides.pdf

Conclusion: You have about 6 months to sell off your assets until the market will be flooded with fire sales and forclosures.

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

Originally posted by @Bob Prisco:

@Thor Sveinbjoernsson GREAT more opportunities to buy ? 

If you bought at the peak in 2008 you'd still be recovering

Are you trying to see how many lies and incorrect things you can say? No, not even close, at all, this is basic numbers and you call yourself an accountant?

Nationally we have not only already hit but exceeded full recovery, years ago buddy. Seriously, stop pulling random BS statements out of thin air, really. 

[James Hamling]

Originally posted by @Joe Cassandra:

Originally posted by @James Hamling:

Originally posted by @Bill F.:

Originally posted by @James Hamling:

Originally posted by @Joseph Hennis:

Originally posted by @James Hamling:

@Thor Sveinbjoernsson what you have put out is the single worst, most incorrect over-simplification of the " 08/09 Housing Collapse", written with complete and total ignorance of every financial and investment market mechanism involved INCLUDING the actual housing market data and factors involved. And the fact that your calling yourself an accountant! I am totally blown away and terrified for business persons who may be looking to you for sound business advice that they would catalyze into actual actions. 

First off, the housing collapse was (in a simplified manner) 2 MAIN actions: a housing SURPLUS (and a massive one at that) AND a significant monetary contraction. Thats it, NOTHING like today, nothing at all. 

The monetary contraction was a ticking time bomb, it's was destined to happen by the sheer design of it and as you were oblivious to all of this I will not attempt to get into the finer detail of mortgage-backed securities and the layering of tranches. Short story, the securities were destined to fail AND those securities had factors of x20/x40.x50+ of funds gambled upon them so each security that went down took a grossly disproportionate amount of capital down with it. 

At this point you may be asking "this guy seems to know a bit more than average on this", yeah, because I was actually there, and I spent a time as a Mortgage Banker to boot. The housing collapse was a monster sized freight train that many fo us saw coming miles away, not to the full extent of what it was BUT many of us in the business knew a correction was coming, knew lending was hugely inflating the market, knew the math of over-supply and on and on all meant correction was coming, we just didn't know when and how bad. 

Today, we are in a housing SHORTAGE. We do NOT have the same crazy system on mortgage-backed securities we had in 08/09, or to be more accurate the Jenga stack of gambles is not built in a way as it was. 

There is so much distortion in your post and promotion that it verges on criminal. For example, saying everyone better hurry and sell in next 6 months "or else" there will be mass flooding of market with sales, your telling people to flood the market genius. Thats inciting a run on the market. Your inciting fear and panic. 

Your correlating unemployment with housing market collapse, well guess what, pre 08/09 collapse unemployment was under 4%. So by your logic low unemployment = housing collapse, because thats what it was. It was the housing collapse that made unemployment rise, not the other way around. 

i gotta stop, because I could literally write pages of false information and false premise in your doom pandering, with matching pages of actual economic and financial reality, basically all those things actual accountants learn in a university which is why I am confused by your stated position and statements, they don't match at all. 

Will unemployment effect mortgage defaults and the economy, absolutely, and not in the manner stated because we DON'T have a declining market we have a restricted market from regulation suspension. What the difference, well a declining market is one where the whole is reducing from fundamental factors, a restricted one, which we are in, is where desired economic activity is restricted and with that it builds tension, like a spring, and as restriction are removed that tension is expressed by massive economic boom. Don't believe me, just look everywhere that is opening and removing restrictions. 

Look, I'm not an economist, but I did study economics, and all this I am saying is a combination of life business experience and that economics study and basic principles, all of which are and have proved true over and over again. There is NO collapse coming like this ya-hoo is trying to incite. 

 So I already gave Thor a hard time about overfitting the data and assuming a collapse is coming... But you seem to be overfitting in the opposite direction and assuming there is no collapse coming.

Here's the fact of the matter: We DON'T KNOW if a collapse is coming... Unless maybe you are from the future... In that case please PM me, I want to know which stocks to pick.

All we know are the risks that are out there, and we should be prepared to weather whatever storm may come. Personally, I am sitting on a pile of cash, but I am not liquidating all my assets. If you are leveraged beyond your means already, then liquidating may be a good idea, even if a collapse doesn't come.

I have laid out a considerable list of facts, data, economic theory and mechanics, countless times spelling out in detail exactly how economics actually work especially as it pertains to the housing industry, which clearly is stating THERE IS NO COLLAPSE, NOT NOW, NOT SOON, NOT COMING, NOT AT ALL. Your argument is -ignorant of facts -unsupported, plain and simple. If you'd like to actually attempt to counter the facts I have laid out please, feel free, but I laid out the math and data and that is what I am reading which DOES tell the future. 

James, I appreciate the effort you've put into your posts. 

What would need to happen for you to change your mind and believe that a housing "collapse" is coming?  

Interesting question, very interesting..... You said "collapse", not a recession but a collapse. For a collapse to be possible there is a few things that have to happen; 

(A) supply has to exceed demand in a significant proportion. Short of a mass kill off of people I don't know how this could happen, you literally have to remove roughly 35million+ people from needing a home, specifically home owners. All I can think of is WWIII, how else do you make that first necessary ingredient happen? 08/09 housing collapse was result of more than a decade of overbuilding. 

(B) collapse of the mortgage mechanisms of economics; In theory "IF" China called the entirety of US Notes they are holding, all foreign nations call due US Notes, and all foreign nations stop acquiring US Notes. In addition this would also mean the entire planet universally stops using the "Dollar Standard", so they also all agree on a different standard, insert and distribute that world wide, and call all US Notes, that would collapse the US financial mechanisms and with that mortgage liquidity would all but completely end, indefinitely. Without leveraged capital for home purchasing, deflationary pressures come into action. Yes, the entire country would be "burning" and it would be apocalyptic chaos in the streets but yes, this would have deflationary effects on home prices. 

Again, your question specified "collapse" not recession and while there was the 08/09 collapse what too many are forgetting is name the last collapse before that, yeah, it was the Great Depression. And when looking back in history every collapse has come from the financial markets, or invasion, collapse has never come from the economic working sector ever in history go as far back as the Tulip Crash. So barring an invasion of US mainland, I can't find any plausible means other than the above 2. 

 Those are some pretty "when pigs fly" scenarios that RE would ever collapse again. Many probably thought JCPenney and Macy's would never go out of business because they've been around 100+ years.

If the stock market crashed again even more (Dow 15,000), you'd likely see a huge ripple to RE as many retirement accounts would likely be wrecked...and they'd need their equity now. 

So there are other scenarios more likely than simply "World War III". 

-------------

P.S. You can rebuttal people's responses without being a condescending you-know-what. You scoff at those who think there will be a crash coming because they think 'they know it all.' Yet, you answer in the same way...

 I should add and clarify, maybe 10 or 15 years down the road things could start opening up to other potentials because that's what we are looking at right now in the building world as the soonest possible time for construction to catch up with shortage, about 10-15 years. 

People have to remember, residential construction came to a complete screeching halt, for years in most cases. New construction development is like a 10 mile long freight train, to get it moving is a slow ssslllooowwww process. In addition there is a major skilled labor shortage nationally, slowing things all the more. So to infill that shortage AND meet current growth lines in demand, yeah it's about a decade out, maybe more. Thats for net 0. 

[Thor Sveinbjoernsson]

Originally posted by @James Hamling:

Are you trying to see how many lies and incorrect things you can say? No, not even close, at all, this is basic numbers and you call yourself an accountant?

Nationally we have not only already hit but exceeded full recovery, years ago buddy. Seriously, stop pulling random BS statements out of thin air, really.  

Again, please stop with the personal attacks to anyone to does not agree with every word you write.  Also please stop generalizing. There are plenty of examples of people buying at the top still being under water. See examples below that took 2 minutes to find: 

1. Sold for 2.3 million in 2007 - now on sale for 2.2 mill. You invest that at 8% avg return for 12 years and you have 5.5 million today. Thats 3.2 million dollar loss - https://www.zillow.com/homedetails/35-Muscogee-Ave-NW-Atlanta-GA-30305/35901424_zpid/

2. Sold for 3 million in 2008 - now on sale for 2.8 mill. you invest that at 8% avg return for 12 years and you have 7.5 million today. Thats a 4.5 million dollar loss - https://www.zillow.com/homedetails/1220-W-Wesley-Rd-NW-Atlanta-GA-30327/35917213_zpid/

3. Sold for 2.6 million in 2008 - now for sale for 2.8 million. you invest that at 8% avg return for 12 years and you have 6.5 million today. Thats a 3.9 million dollar loss - https://www.zillow.com/homedetails/2969-Andrews-Dr-NW-Atlanta-GA-30305/82626237_zpid/

I do realize there are plenty of examples of houses being valued more now than at the top in 2008 but I am reminding people to be careful.

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

Originally posted by @Pau Kha:

@Thor Sveinbjoernsson

Past performance does not guarantee future performance. The fundamentals of economy are still strong.. stronger than 2008. Also, I’m seeing a constricting supply and any properties that come up are still snatched up quickly.

What do you consider fundamentals of the economy? employment? GDP? US deficit? Consumer confidence?  Because all of these are as bad as ever. 

 Thor.... why don't you go ahead and tell all of us what the fundamentals of an economy are, you know seeing as your an accountant and they taught that in your macr-economics course when getting your accounting degree..... Maybe tell us about liquidity in an economic system and the effects of access to capital, and feel free to cite what liquidity is currently. Or maybe the principles of supply & demand and current trend lines for housing supply in months and year over year comparisons. Possibly you could explain what consumer confidence is and how that figure is developed and quantified into a rating number? 

[Bjorn Ahlblad]

@Thor Sveinbjoernsson Great thread! It really matters 'where' in the cycle you are buying and selling and never be forced to sell. I bought properties in California in the mid 1980's and sold them in 2015 and 2017. There were several hiccups along the way where selling them would have been a disaster. I had colleagues who lost their shirts because they could not handle the troughs. California properties are not a guaranteed money maker. Be careful out there and always have access to capital.

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

Originally posted by @James Hamling:

Are you trying to see how many lies and incorrect things you can say? No, not even close, at all, this is basic numbers and you call yourself an accountant?

Nationally we have not only already hit but exceeded full recovery, years ago buddy. Seriously, stop pulling random BS statements out of thin air, really.  

Again, please stop with the personal attacks to anyone to does not agree with every word you write.  Also please stop generalizing. There are plenty of examples of people buying at the top still being under water. See examples below that took 2 minutes to find: 

1. Sold for 2.3 million in 2007 - now on sale for 2.2 mill. You invest that at 8% avg return for 12 years and you have 5.5 million today. Thats 3.2 million dollar loss - https://www.zillow.com/homedetails/35-Muscogee-Ave-NW-Atlanta-GA-30305/35901424_zpid/

2. Sold for 3 million in 2008 - now on sale for 2.8 mill. you invest that at 8% avg return for 12 years and you have 7.5 million today. Thats a 4.5 million dollar loss - https://www.zillow.com/homedetails/1220-W-Wesley-Rd-NW-Atlanta-GA-30327/35917213_zpid/

3. Sold for 2.6 million in 2008 - now for sale for 2.8 million. you invest that at 8% avg return for 12 years and you have 6.5 million today. Thats a 3.9 million dollar loss - https://www.zillow.com/homedetails/2969-Andrews-Dr-NW-Atlanta-GA-30305/82626237_zpid/

I do realize there are plenty of examples of houses being valued more now than at the top in 2008 but I am reminding people to be careful.

LMAO..... Seriously, your justification for home still being "under water" is by citing the luxury home market. Why don't you just use the pricing comparisons of art auctions or Jaguar ownership and sales while your at it. 

I am not sorry that your upset by facts, real data and math, it's called reality. You keep pandering to a baseless claim, strive to incite panic and fear into unwitting investors, and every time your countered with reality there is no answer or addressing of the fact just more skewed and distorted things such as citing luxury homes, lol. I can show you a home that was 4mill+ to construct that can't get sold for 400k, why, because the owner is a nutter and it's so customized and weird that people run away on showings. So does this mean the housing market is going to collapse, because a luxury home isn't selling for it's gigantic price tag? 

IF you had any time in real estate you'd know that once you exceed 1million on home price/value everything changes, EVERYTHING. There is no justification for a 4 million dollar home, it's perceptual value and those perceptions change. A gated community that during development was "the" spot to be could have been selling for 3mill+ at inception, and 10 years later lucky to get 1.25mil on sales because it is no longer "the" hot spot, that's now down on the river, or in the new condos down town, so on and so forth. 

Come on, pull out some median home values, show us those..... Please show me 1 market in the US where median home sales is at or under 2008, just 1. I will say population has to be at least, lets say, 2,000. 

You brought this on yourself Thor, when you decided to come on here and spout BS and distortions, you took on the risk that you'd stir a beast, a beast with decades experience and licenses like medals on a generals coat. I wake up in the morning and study markets, I take lunch and study markets, I go to sleep and dream of markets, I live eat and breath this industry buddy, and I have 200+ clients to defend and all the potentials out there better known as the BP community. I will not let you lie and incite damaging financial actions on people. 

[Thor Sveinbjoernsson]

@James Hamling  See listings for houses for sale under water from 2008 in 300-400k range. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

@James Hamling  From the way you speak I thought you were a high-roller. Bad judgement on my behalf. Below are some listings in your price range that are still underwater from 2008. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

Is this where I am supposed to cry???? I am supposed to feel hurt or something right.... sorry, I am trying but it's just not happening, I guess it might have something to do with your a 25 year old kid, looking to buy his 1st investment property, and yet your on here talking to a 27yr veteran who has more closed completed deals than you have years of life, by a significant multiplication factor. Yeah, maybe that's it. 

Look, I will look at those above but I remind you I said show me/us just 1 market where median homes sales value in at or under 2008, you throw up some Zillow links to a few properties, you might as well just said you don't know what I am saying. 

I am trying to help you Thor, there are several real veterans of the industry on here and we all have been doing some schooling on this post, a wise 25yr old kid trying to start in the business would be wise to listen and learn, ask questions, strive for understanding. Do you realize how many recessions I have gone thru while being an industry professional? You have literally no concept to what those like me have experienced and weathered, and what it takes to make a collapse. I am sure to a 25yr old kid this is the biggest thing ever to happen in your life so it's full panic mode, but honestly it dosn't make my top 5, it dosn't, and it is not a collapse, the math and data tells us so, you just gotta remove emotion and listen to the data. 

[Thor Sveinbjoernsson]

@James Hamling I'm confused. You say you have been through multiple recessions yet you refuse to admit that we might possibly be entering a recession?

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

@James Hamling  See listings for houses for sale under water from 2008 in 300-400k range. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

These are 4-sale listings, not sold. In GA for over 300K to almost 500K. So, you rent 300K-500K properties in GA to tenants? Sell to 1st time home buyers? Is 400K the median home price is GA? 

Seriously, will a GA investor please chime in on this as GA is not a primary market of mine. I have knowledge but will withhold comments because thats all I have, some knowledge of the market, not an expert. 

What are you trying to say Thor? Since there listing for under Zillow estimate that = there going down in value? I am seriously asking. 

as an FYI Zillow is not a home appraisal, and it is famously known for not being accurate, but it's not meant to be accurate, it's meant to be a usually decent ball-park estimation. If you buy based of a Zillow price your gonna have some troubles. 

[Bob Prisco]

@Thor Sveinbjoernsson we are not heading into a recession, Its going to be a  booming 3rd and 4th 

[Thor Sveinbjoernsson]

Originally posted by @James Hamling:

Originally posted by @Thor Sveinbjoernsson:

@James Hamling  See listings for houses for sale under water from 2008 in 300-400k range. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

These are 4-sale listings, not sold. In GA for over 300K to almost 500K. So, you rent 300K-500K properties in GA to tenants? Sell to 1st time home buyers? Is 400K the median home price is GA? 

Seriously, will a GA investor please chime in on this as GA is not a primary market of mine. I have knowledge but will withhold comments because thats all I have, some knowledge of the market, not an expert. 

What are you trying to say Thor? Since there listing for under Zillow estimate that = there going down in value? I am seriously asking. 

as an FYI Zillow is not a home appraisal, and it is famously known for not being accurate, but it's not meant to be accurate, it's meant to be a usually decent ball-park estimation. If you buy based of a Zillow price your gonna have some troubles. 

I am not talking about appraisals, you can see the price history on zillow. Just scroll down to see what they sold for in 2008. Now they are listed for sale for less than what they sold for in 2008. 

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

@James Hamling I'm confused. You say you have been through multiple recessions yet you refuse to admit that we might possibly be entering a recession?

 Possibly entering into a recession ABSOLUTELY, I would even say likely in the next 12-18 months. A housing "crash", like you have been saying, absolutely zero chance. 

I remind you named this post "6 months to liquidate your assets", that's not recession actions, that's collapse actions. If you're walking the doom-preaching back to a recession I applaud you and consider my job complete. 

No tot be a jerk but seriously how are you an accountant? You seem oblivious to nearly everything every account I have ever known knows. Yes, multiple recessions, there darn right common, we live in a cyclical economy, bears & bulls. I started listing all the various recessions but it's good education if you just do some research on it yourself, and I don't want to type that much. 

[Thor Sveinbjoernsson]

Originally posted by @James Hamling:

Originally posted by @Thor Sveinbjoernsson:

@James Hamling I'm confused. You say you have been through multiple recessions yet you refuse to admit that we might possibly be entering a recession?

 Possibly entering into a recession ABSOLUTELY, I would even say likely in the next 12-18 months. A housing "crash", like you have been saying, absolutely zero chance. 

I remind you named this post "6 months to liquidate your assets", that's not recession actions, that's collapse actions. If you're walking the doom-preaching back to a recession I applaud you and consider my job complete. 

No tot be a jerk but seriously how are you an accountant? You seem oblivious to nearly everything every account I have ever known knows. Yes, multiple recessions, there darn right common, we live in a cyclical economy, bears & bulls. I started listing all the various recessions but it's good education if you just do some research on it yourself, and I don't want to type that much. 

If you were following the thread than you could see that I chose the title to attract discussion... which worked. I don't think we are entering a collapse but I do think recession is likely. And you keep going with the personal attacks... very mature of you.

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

Originally posted by @James Hamling:

Originally posted by @Thor Sveinbjoernsson:

@James Hamling  See listings for houses for sale under water from 2008 in 300-400k range. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

These are 4-sale listings, not sold. In GA for over 300K to almost 500K. So, you rent 300K-500K properties in GA to tenants? Sell to 1st time home buyers? Is 400K the median home price is GA? 

Seriously, will a GA investor please chime in on this as GA is not a primary market of mine. I have knowledge but will withhold comments because thats all I have, some knowledge of the market, not an expert. 

What are you trying to say Thor? Since there listing for under Zillow estimate that = there going down in value? I am seriously asking. 

as an FYI Zillow is not a home appraisal, and it is famously known for not being accurate, but it's not meant to be accurate, it's meant to be a usually decent ball-park estimation. If you buy based of a Zillow price your gonna have some troubles. 

I am not talking about appraisals, you can see the price history on zillow. Just scroll down to see what they sold for in 2008. Now they are listed for sale for less than what they sold for in 2008. 

Thor, there is honestly countless possibilities why a home, especially one in or near the luxury class, could be listing for less than it did 10+yrs ago, first of all 10+ yrs of wear and tear, condition. The condition of the sale will affect price, that is all considered when we do CMA's and appraisals. Neighborhood classification, schools, HOA rules changes, there is so many factors that can affect a value over 10+ years, you simply can't blindly look at price alone ignoring the structure and say "ah-ha, markets going down".

I have actually seen homes loose 90% of value in 1 hour before, because city council issued a proposal to build a road thru there front yards (seriously, like 5' from there front doors). Nearly a year later, city bought all the homes AND had to pay an award for damages caused as no one was able to sell or refi or anything during that year. Point is, the devil is in the details. 

[James Hamling]

Originally posted by @Thor Sveinbjoernsson:

Originally posted by @James Hamling:

Originally posted by @Thor Sveinbjoernsson:

@James Hamling I'm confused. You say you have been through multiple recessions yet you refuse to admit that we might possibly be entering a recession?

 Possibly entering into a recession ABSOLUTELY, I would even say likely in the next 12-18 months. A housing "crash", like you have been saying, absolutely zero chance. 

I remind you named this post "6 months to liquidate your assets", that's not recession actions, that's collapse actions. If you're walking the doom-preaching back to a recession I applaud you and consider my job complete. 

No tot be a jerk but seriously how are you an accountant? You seem oblivious to nearly everything every account I have ever known knows. Yes, multiple recessions, there darn right common, we live in a cyclical economy, bears & bulls. I started listing all the various recessions but it's good education if you just do some research on it yourself, and I don't want to type that much. 

If you were following the thread than you could see that I chose the title to attract discussion... which worked. I don't think we are entering a collapse but I do think recession is likely. And you keep going with the personal attacks... very mature of you.

 It's called criticism Thor, honest criticism and observations, or truth for short. 

Once upon a time people used it as fuel to improve and get better at what they do, because once upon a time you had to actually be good at what you did to claim achievement. I personally don't give a damn what you call it, or me, you'd have to first earn my respect for that. 

[Bryce R.]

https://www.bloomberg.com/news...

bankruptcies picking up steam....

[Victor Olowu]

Yes there are forbearance programs, but I still expect home prices to fall significantly in the next 3 to 6 months as the unemployment spike starts showing up as increased supply in the residential market.  Even if the government outlaws foreclosures, you still have A LOT of new construction coming online with a very large drop in new purchases. 

If we focus on job losses alone: savings will be depleted, i.e. no down payments, and it will take a while to rebuild savings accounts.  Also, job history, which is a major criteria for bank loans will now have a lot of applicants that have only been employed for a couple of months, which all banks will not be comfortable with.  Just as importantly, there will be a general decline in consumer confidence and spending for regular purchases, let alone 15 or 30 year mortgages.

[James Hamling]

The #1 thing this posting thread has shown to me is just how pervasively people are operating and promoting their self-developed thoughts of how things are in markets, wind those up as a blanket belief of markets as a whole, decide beliefs = fact and promote as such. 

It has been eye-opening. 

[Account Closed]

@James Hamling as a wise person once told me, “never take financial advice from an accountant” 

[Jenning Y.]

Originally posted by @James Hamling: 

Come on, pull out some median home values, show us those..... Please show me 1 market in the US where median home sales is at or under 2008, just 1. I will say population has to be at least, lets say, 2,000. 

Haha, still lots  of  US cities'  home prices are not fully recovered from the height of  the financial crisis.  For example, bunch of cities in Central Valley of California such as Stockton, CA; Los Vegas, NV;  Some Cities in New Jersey; and other midwest cities.  There are no doubt many US cities are still under water. 

[Kyle J.]

Originally posted by @Jenning Y.:

Originally posted by @James Hamling: 

Come on, pull out some median home values, show us those..... Please show me 1 market in the US where median home sales is at or under 2008, just 1. I will say population has to be at least, lets say, 2,000. 

Haha, still lots  of  US cities'  home prices are not fully recovered from the height of  the financial crisis.  For example, bunch of cities in Central Valley of California such as Stockton, CA; Los Vegas, NV;  Some Cities in New Jersey; and other midwest cities.  There are no doubt many US cities are still under water. 

I can’t speak for every city in the US. However, I personally invest in Stockton and can tell you that it’s far from being “underwater”. Neither are the other cities around it.

I wouldn’t think there are many cities/markets anywhere still underwater from 2008. 

[Kyle J.]

Originally posted by @Thor Sveinbjoernsson:

@James Hamling  See listings for houses for sale under water from 2008 in 300-400k range. 

https://www.zillow.com/homedetails/4051-Idlewood-Parc-Ct-Tucker-GA-30084/70836752_zpid/

https://www.zillow.com/homedetails/2454-Wynsley-Way-Tucker-GA-30084/79986135_zpid/

https://www.zillow.com/homedetails/6147-Queens-River-Dr-Mableton-GA-30126/87682054_zpid/

A few listings is not indicative of a market being “underwater”. However, even if it were, just looking at the first property you linked to, it appears to have sold back in 2006 for $332k and to be currently listed (not sold) for $369k.

How is that underwater? 

[Vince Ivanov]

I've seen many properties in Scottsdale Az that are selling for less than what they were purchased in 2008. I get the MLS alerts every day and out of 5 alerts about 3 are price cuts. I was just looking at one house that's been reduced by about 10%. Last week I had one alert that was a short sale. I'm guessing a lot of people who bought in 2019 have very little or no equity in their houses. This is in Scottsdale specifically. I'd also be concerned about some of the hot spots where houses typically used to sell 10% above asking. Just a small pullback would leave these buyers with zero equity.

[Sue K.]

Originally posted by @James Hamling:

Originally posted by @Sue K.:

Originally posted by @James Hamling:

Originally posted by @Vince Ivanov:

People keep saying that this time it’s different because people have a lot more equity in their houses. This is not entirely true. Many people who bought in 2019 and early 2020 are potentially under water.

 We keep saying this is different from 08/09 crash because it IS different, in every conceivable way possible, every, nothing is the same. 

08/09 was a collapse of a financial system that effected the entire global economy due to the particulars of it, which created a recession. 

This is different, plain and simple. Economy was humming along like a jet plane. Think about it, the economy was performing awesome despite trade wars ongoing, despite political turmoil, thats a beast of a strong economy. 

Then covid, and government restrictions. There is literally nothing the same between these two incident, different catalyst, different mitigating factors, different starting, different players, different responses, different governmental level of primary response, just all around different. 

 It doesn't matter why prices tank to the people who lose equity, though, does it?  An economy crash is an economy crash.  A crash equals lower home prices and usually lower rent prices, tightening lending by banks.  It also doesn't matter at all what the economy was like prior to a crash.  It's just the crash that matters.

Arguing whether or not this crash is created in a different way than other crashes in history doesn't change the result.  If a fire is caused by an electrical malfunction or a propane tank or a forest fire, does the house burn differently?  Does it matter, if the result is ashes either way?

My point was to argue with your assumption that if someone has equity prior to a crash caused by a pandemic, that their equity won't be hurt.  That's simply not logical.  You're assuming that the value of their property won't go down.  I hope you're right, but in my opinion, that's just really simply not logical.

I'm old enough that I've witnessed several crashes.  The result on the real estate market was always the same.

 The following lesson is going to be summarized by if you don't have a clue of what you're talking about, please, don't try to fake it. 

Firstly and foremost, yet again, there is NO crash, none, zero, zip, nada, zilch. 

Secondly, when talking on economic theory yes, the catalyst does matter, greatly, to the extent that it's almost all that matters because it is the means as to how far-reaching a recession will be, how deep, durable, and the means to mitigate and alleviate. 

Next, median equity matters a LOT! pre 08/09 crash many had leveraged themselves into positions of near to no equity or negative equity. So in a economic downturn as we were, with mortgage resets that would place servicing beyond financial means of many, an exit strategy of selling or refinancing was not feasible for a significant ratio of mortgage holders, it was that combination of factors that carved out the depth of the the 08/09 collapse. NOW with policies and laws that redesigned a system to prevent such, the median equity position is a significant ratio AND the lurking mortgage servicing reset to a non-feasable amount has been in large part eliminated, so that means persons have a) a cushion to sell at net positive or net 0 if need be b) equity to tap for financial use c) consistency in expenses. 

So let's say your fantasy land happens, by some magic unicorns burst from the ground, leprechauns are real and drive uber, and some way or some how in a housing shortage home values drop 30%. guess how many people go into foreclosure because home values drop 30%, zero. This was actually an important economic study of the 08/09 collapse; how long until the housing market reaches full recovery, the general answer is 7 years. So all you have to do is NOT sell your property for 7 years, in general, and you will be back at the value it was before. 

And your flat wrong, economic "collapse" which I assume you mean recession, is a catalyst that INCREASES rents, not lowers my friend. Feel free to research the 08/09 recession, or any for that matter. In a recession consumer mobility is lesson, as is purchasing power, which is all drivers for more people to rent as less can buy. Then there is all those people your saying will loose there homes, are you saying Publishers CLearingHouse is going to hand out millions of homes? Maybe cardboard box's? No, they become renters. Supply & Demand my dear, recessions increase demand in a time frame supply can not keep up with, rents rise. Again, 08/09 recession was a case study in this. 

As I said, your arguing to things you yourself don't understand. I know diddly squat on auto repair, so I would never dare inject and argue with an auto repair pro, I would ask questions. The reason I take such ire with your words and those acting in like manner is because your inciting panic, fear, directing persons to make financially damaging actions. It's not ok, it's not the run of the mill conversation on here. If just 1 person get's all freaked out because your all saying "oh my God you MUST sell your properties NOW" that is 1 too many people, it's not ok. 

Frame things in accuracy, and if you must doom preach then do it accurately, say that it's how you feel, say it's what you think people should be doing, not this framing of things in means to incite panic and fear. It's running into a theatre and screaming "fire", that's what your doing. 

 There is absolutely no reason to be so rude.  Again, you have missed my point.  My point is that whether or not you had equity in your home and weren't heavily leveraged in the 2008, etc., years, if your home value went from a million dollars to $500,000 - you just lost a ton of equity.  

That happened to everyone, regardless of whether or not they still had a mortgage or had ever made a bad decision regarding their properties.

I'm not talking about foreclosures.  I'm just talking about how just because someone has equity in their home doesn't mean they won't lose it, or a lot of it, if the market crashes.

So, saying that if the market crashes now and someone has equity that they won't lose that equity no matter what happens, just doesn't make logical sense.

I don't believe we are going to find common ground for some reason, though.  Best of luck to you.  You might want to take up meditation, though.  I can feel your blood pressure from here.