Upcoming Housing Crash?

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y

2015 - Is this a bubble? https://www.biggerpockets.com/...

2016 - Thoughts on the next housing crash https://www.biggerpockets.com/...

2017 - Housing Bubble Crash https://www.biggerpockets.com/...

2018 - Housing Crash in 2018/2019 https://www.biggerpockets.com/...

2019 - Are we heading into the next real estate market housing crash https://www.biggerpockets.com/...

2020 - Housing Market Crash https://www.biggerpockets.com/...

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  • Minna Reid
    OP
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    5y

    @Russell Brazil I find that figure very hard to believe. There’s no way 80% of the millions of folks that signed up for forbearance took it for no good reason at all and just continued to pay as usual. Think of how absurd that would be.

    0Reply
  • Nate Sanow
    I​nvestor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Minna Reid

    To me this points to an increase of supply not a crash. There is too much cash ready to go. Also sooooooo many of these properties won't even make it to foreclosure and be sold pre-foreclosure. It would be nice if a ton of inventory popped up and heck it would be extra nice if said inventory included some REO's and short sales and favorable pricing.

    1Reply
  • Eric Bilderback
    Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    @Minna Reid

    Hey bringing that up takes guts.  I have seen everyone who has brought "the crash" get slammed over and over.  You don't have crystal ball, people call it and they are always wrong and generally mocked etc.  

    It is amazing to me that we this economy functions at all,  I think it was Ken McElroy or someone like that brought up the point that we don't really have a market economy or else we would have had our spinach a long time ago.  The Fed (it seems to me) is going to do everything they can to keep financialization going and prop up the debt and asset market.  I think it is becoming a more mainstream opinion that those who use debt to borrow assets will be bailed through stimulus and money printing.  I have come around to this way of thinking as well.  The game is rigged and people who buy assets with debt have the chips stacked in their favor.  The poor and middle class (which I proudly consider myself a part of) will have more and more difficult time ever getting out of their predicament.  I can't do a darn thing about it so I keep buying real estate cautiously and my bet is in 10 years we will be glad we did.  

    .

    @Minna Reid

    2Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    Crash or no crash, buy smart and you’ll be fine. I could literally cut my rents by almost half and still make $ every month.

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y
    Originally posted by @Minna Reid:

    @Russell Brazil I find that figure very hard to believe. There’s no way 80% of the millions of folks that signed up for forbearance took it for no good reason at all and just continued to pay as usual. Think of how absurd that would be.

     What stat presents a different view of things? Where are they? Unemployment is only 6%. We use to consider 5% to be full employment. And who is not working? Restraunt workers, who by and large are not homeowners. Personal savings rates are at an all time high. 

    One only need to search these forums for countless people who have posted their personal experience of taking forebearance when they didnt need it, and then were shocked to find out they couldn't get another mortgage due to the forebearance. Id say I've read that at least once a month the last 9 months here. 

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y
    Originally posted by @Russell Brazil:
    Originally posted by @Minna Reid:

    @Russell Brazil I find that figure very hard to believe. There’s no way 80% of the millions of folks that signed up for forbearance took it for no good reason at all and just continued to pay as usual. Think of how absurd that would be.

     What stat presents a different view of things? Where are they? Unemployment is only 6%. We use to consider 5% to be full employment. And who is not working? Restraunt workers, who by and large are not homeowners. Personal savings rates are at an all time high. 

    One only need to search these forums for countless people who have posted their personal experience of taking forebearance when they didnt need it, and then were shocked to find out they couldn't get another mortgage due to the forebearance. Id say I've read that at least once a month the last 9 months here. 

     Copied from my email from meeting notes with Mortgage Bankers Association

    • 54.6% represented borrowers who continued to make their monthly payments during their forbearance period and reinstatements.
    • 16.6% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance and have exited forebearence
    • 12.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
    • 7.2% resulted in loans paid off through either a refinance or by selling the home.
    • 6.8% resulted in a loan modification.
    • The remaining 2.0% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    A housing crash occurred in my neighborhood, maybe yours is next.

    6Reply
  • Fred Cannon
    Rental Property Investor · St Augustine, FL · Member since 2019 · 264 posts · 279 votes
    5y

    @Minna Reid I just wait for a good buy in a good market. Real estate investing has a lot of different avenues. My strategy changes as the market changes. Right now STR market is great and combine that with good prices on condos and the return on cash invested is very good. 2-3 years from now maybe that shifts when the SFH market pricing recedes. Just stay flexible and don't put all your eggs in one type of basket. Right now I am

    Doing extremely well with 1 bedroom condo's renting to traveling professionals. However after Covid this might cool down, but this trend is here to stay. There are bears snd bulls in every market and they are all 100% accurate as long as they don't put a date with there analyses.

    1Reply
  • Mike Lee
    Investor · Tampa, FL · Member since 2017 · 123 posts · 109 votes
    5y

    What goes up must come down, eventually.

    1Reply
  • John Minock
    Investor · Menifee, CA. · Member since 2021 · 48 posts · 29 votes
    5y

    @Minna Reid

    I think when you predict rain every day sooner or later you will be right. Of course there will be a correction at some point. I know the supply is not enough for the demand in Southern California right now so it will not hit here as soon as other areas. In 2005 I lived in Michigan and we were experiencing a huge crash in economy, building real estate...In 2007 I took a job in Southern California. I was laughed at when looking for houses in the $350 to 400k range in Orange County by realtors. By the end of 2008 the market had corrected. I share this because it took California 3 to 4 years to feel what Michigan did. If you pay attention to other markets across the country it will help you anticipate when your market will correct itself.

    3Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    I don't buy this at all. Since the ‘08 crash, banks have tightened up. They haven't been giving out mortgages like candy since then. I have good solid income and I dread going through the loan process. And that's putting 20% down. So almost all of us have a lot of equity to begin with if you include the big 20% down payment. And anyone who bought properties over 6 months to a year ago have a lot of equity due to the massive run up in real estate prices. Most desperate sellers are at least breaking even if they have to sell. There are thousands of real estate investors like us that will snag these things at a slight discount. The stock market is at a peak too, and many people (like me) are diversifying with RE. Not many want to be 100% in the stock market when we retire for obvious reasons. So many of us are spreading it around with real estate. Even if we are only making 6-10% CoC in RE.

    2Reply
  • Jay Yoo
    Investor · Seattle, WA · Member since 2019 · 139 posts · 54 votes
    5y

    @Minna Reid I also watched Ken’s videos and be mindful of what’s coming however no matter what conditions of our economy, today is the best time to invest because the time is the only asset that you can not buy.

    I would refer to more realistic data from Robert Kiosaki knowing that we are getting close to the slump phase in many markets.

    Reference from Robert’s forum,

    “Total US Debt $28 T. Total US Gov spending $8 T. US Gov Tax collection $3.5 T. US Gov short $4.5 T. Biden to spend $1.9 T stimulus. US bankrupt yet stock market higher. Economy sick. Very very sick.”

    Type of properties to invest is very important during the market correction (I dont like to call crash because the Feds know the history in 2008)

    Single families, brrrr and cash out refi after 6 months would not be a good idea if you play safe during this unknown economy forecast.

    Could be a slight off topic but MF properties would play much safer during the market correction because you can still pay expenses and the mortgage while few tenants can’t pay, plus many other benefits and advantages.

    3Reply
  • Minna Reid
    OP
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    5y

    @Eric Bilderback I didn't expect so much backlash this time actually LOL. But then again I made a very similar post on this site back in about 2007...got all the same responses.

    1Reply
  • Account Closed
    Contractor · Member since 2020 · 91 posts · 64 votes
    5y

    @Minna Reid I’m a little more concerned about war so bad that money and a recession won’t matter as much. The changes to the way we lived is unprecedented and the measure of government involvement in business and home life is at an all time high. If government is funneling so much to the compliant and the haves and have nots are distancing from each other, it’s only a while til unrest and change comes from the defiant. A nation cannot exist long without the compliance of its citizens. Do people care more their home value, or their freedom? When a portion choose the latter, the rest will have to ride the tiger. Buckle up?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Jay Yoo:

    @Minna Reid I also watched Ken’s videos and be mindful of what’s coming however no matter what conditions of our economy, today is the best time to invest because the time is the only asset that you can not buy.

    I would refer to more realistic data from Robert Kiosaki knowing that we are getting close to the slump phase in many markets.

    Reference from Robert’s forum,

    “Total US Debt $28 T. Total US Gov spending $8 T. US Gov Tax collection $3.5 T. US Gov short $4.5 T. Biden to spend $1.9 T stimulus. US bankrupt yet stock market higher. Economy sick. Very very sick.”

    Type of properties to invest is very important during the market correction (I dont like to call crash because the Feds know the history in 2008)

    Single families, brrrr and cash out refi after 6 months would not be a good idea if you play safe during this unknown economy forecast.

    Could be a slight off topic but MF properties would play much safer during the market correction because you can still pay expenses and the mortgage while few tenants can’t pay, plus many other benefits and advantages.

    MF was not immune to the 2008 crash you only have to look at  FLA GA NV  and other areas to see plenty of failed apartment deals..  one reason is most are bought with as little equity as possible and if you have a vacancy factor that causes bleeding dollars its not long and your toast..  

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  • Carlos Gonzalez
    Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes
    5y

    @Minna Reid

    After forbearance occurs and if people are delinquent other investors will buy the properties. I’ve seen it happened here in Phoenix. Of course it might vary from state to state but that’s what I’ve seen so far

    0Reply
  • Minna Reid
    OP
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    5y

    @Account Closed I think that government “involvement” elevated to government abuse of power many months ago. In fact government is almost solely responsible for any upcoming negative impact to the housing market. They have killed the economy, stripped private property rights and stomped all over private contracts. I am appalled at what is going on, how our rights are being so easily stripped away, and I also would not be surprised to see civil war break out...but I suppose that’s a whole other topic.

    1Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    5y
    Originally posted by @Minna Reid:

    I ran into this video 

     Good question Minna, and thanks for the video. My guess is that it as inventory increases (Spring is about to hit us and open up the market with more inventory), followed by the end of forebearance in June, or later if extended again...if inventory hits the market, prices will decline. And how's the climbing unemployment going to play into this? I suspect we are approaching the decline...correction...slump...or maybe even crash... within the next 9 - 12 months, but hope not.

    1Reply
  • Account Closed
    Contractor · Member since 2020 · 91 posts · 64 votes
    5y

    @Minna Reid I reckon a big question is whether big banks and Wall Street are cooking something up. Seems like the next crash will be more associated with killing the business owner and elevating the big corporation, as that is what’s already happening now. Wells Fargo used to give concession on interest if you went to the top and asked before you pay it all off. They don’t do that anymore as of 2021. So why are they making things harder on people and why are they still charging interest while they don’t require payments? Delayed problems. They’d probably rather be the ones kicking it off the ledge this time, than the ones covering when it falls.

    0Reply
  • Minna Reid
    OP
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    5y

    @Account Closed Because banks are going to profit off this. They are going to profit from the extra fees and interest they can charge. They are going to profit from writing garbage loan modifications. And they’re going to profit again when government hands them some more bailout money when there are mass defaults. This entire thing has the been biggest transfer of wealth ever from the average Joe and small business to large corporations. The banks know the money is coming. 

    2Reply
  • John Minock
    Investor · Menifee, CA. · Member since 2021 · 48 posts · 29 votes
    5y

    @Minna Reid I have been reading everyone's posts and thoughts. California has a supply demand which is being met by thousands of track homes and multifamily construction blowing up as well.

    0Reply
  • Minna Reid
    OP
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    5y

    @John Minock But is it being met? Are you saying there are no supply problems in CA? I do realize building more homes is one solution but skyrocketing construction costs have made that a very expensive solution. 

    0Reply
  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 625 posts · 336 votes
    5y

    @Minna Reid @John Minock " Is it being met". Great question. I am in Chico. tons of new apartments as well as homes in the past 2 years yet demand is still through the roof. New apartment buildings for the college students as well yet demand is still there. We were discussing this on a drive around our area in Chico today. Doesn't make sense. We have had the "CampFire" in Paradise which adds another element to this. I do think when things " adjust" it will be because of some government whatever or new scam uncovered.  Matter of time. Good conversation!

    3Reply
  • Jay Yoo
    Investor · Seattle, WA · Member since 2019 · 139 posts · 54 votes
    5y

    @Jay Hinrichs yes I agree with you sir.  “All MF is safe from the market correction” could be a false statement. Nothing is guaranteed to be safe from a recession. However it is my belief that MF properties properly analyzed and researched with the right team members could be resilient in recessions. 

    CBRE research source

    0Reply
  • Dan DiFilippoBusiness Member
    Real Estate Broker · Fayetteville, NC · Member since 2020 · 251 posts · 244 votes
    5y

    @Taylor L. Not terribly impressed by his videos and his grasp on economics and the financial system appears pretty tenuous. Probably a fantastic real estate businessman, but I'm not putting much stock in his forecasts.

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