I talk to a lot of investors and some are talking about a housing market crash akin to '08 or compare the economic anxiety we see now to that time period.
Juxtapose the record highs in home equity now to 2008, when everyone and their dog was taking out highly leveraged loans tying up their assets in debt.
This is not to say everything is hunky-dory, obviously not.
But many people are flush with cash tied to their homes, and an even larger number of people locked in bottom of the barrel near zero interest rates on their homes.
Rockville, MD · Member since 2020 · 17 posts · 16 votes
4y
Fed is doing whatever they can to kill the demand in order to cool off the inflation, and real estate is a big part of that inflation. Regardless of whether home price goes up or down, people that haven't bought a house with no equity are getting priced out and not able to afford the home they want to live in.
For investors, it will be harder for average investors to find a good deal. From my personal perspective, I am weighing my option of spending a lot of time looking for those deals and potentially come out empty if i analyze conservatively, versus I make my money elsewhere whre i can get better bang of my buck for my time.
I am saving up some cash now and by using HELOC i might be able to scoop up some good deals next year when demand drops to a lower point.
Rockville, MD · Member since 2020 · 17 posts · 16 votes
4y
Fed is doing whatever they can to kill the demand in order to cool off the inflation, and real estate is a big part of that inflation. Regardless of whether home price goes up or down, people that haven't bought a house with no equity are getting priced out and not able to afford the home they want to live in.
For investors, it will be harder for average investors to find a good deal. From my personal perspective, I am weighing my option of spending a lot of time looking for those deals and potentially come out empty if i analyze conservatively, versus I make my money elsewhere whre i can get better bang of my buck for my time.
I am saving up some cash now and by using HELOC i might be able to scoop up some good deals next year when demand drops to a lower point.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
4y
I don't see a crash as homeowners and banks are in a better place. I do think home prices will decline this fall even in solid areas like mine as mortgage rates continue to rise. Unfortunately, for buyers who need a loan and need/want to move this year, it's a crapshoot, buy now at potentially top of market pricing or pay much higher in mortgage payments, anyway, if rates keep rising. Plus, as sellers who may want to transition have to consider losing their super low rate to enter a 6% loan market if they want to buy, and new-home permits are down, I see inventory still tight, made up of more foreclosures, estates, those who get transferred for work, all the situations where you need to move, with much less of the those who just want to move. While there will likely always be good deals for cash buyers, for those needing a loan, I think they need to be more cautious so they don't end up underwater on their loan.
A 20% drop is still not impossible in some (or many) areas. Are we saying that we need foreclosures to get to a 20% drop in price from the highs? Or are we saying we won't see a 50% drop (in some areas) like how it happened in '08? Some areas are already seeing price reductions and 5-10% off from the highs.