CRASH!!! CRASH!!!! CRASH!!!

Briarwood, NY · Member since 2017 · 16 posts · 14 votes

Hi BP, when I open any forum or social media the hot topic is upcoming housing market crash. But I don't understand what does "CRASH" means in real state. Is it like stock that will go down 30-50%? Looking at the historic data I don't see any "real estate" crash. I see sub prime mortgage and insanity in appraisal which caused(foreclosure) the market to go down in 2008. Other than that value of real estate alway treanding up slowly but surely. Now what's going on last few years is abnormal. People bidding a house way over than it's actual worth. People had unnecesaary money from stimulus, the money they didn't have to work for. I think rising interest rate will slow that down and come back to normal. In addition we are short 5 million houses. Is that some folks refering this as crash? does it make sense one day we will wake up and see on zillow our house worth 50% less than prior day? Or I am spending too much time on social media and news outlets?

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Scott E.

Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes

As somebody who was a sub-prime mortgage loan officer in 2007-2008 and remained in the mortgage industry for following 14 years, I can say with confidence that this time it's different (from a quality of loan perspective)

The single biggest threat to the housing market in my opinion is if we enter a recession and these layoffs persist. We're already seeing layoffs in tech and fintech. If we continue to see layoffs across other industries and the unemployment rate starts to rise, then there are going to be a lot of people who are having a hard time affording their home (ESPECIALLY the people who got caught up in the frenzy and paid too much over the past 18 months).

I still don't foresee a crash in the market comparable to what we saw in 2008. But I do think there is risk of price decline in the short term. All that being said, I have no idea what I'm talking about. I'm not an economist, I don't have a crystal ball. I'm just a guy with an opinion.

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
Quote from @Tanveer Ahmed:

Hi BP, when I open any forum or social media the hot topic is upcoming housing market crash. But I don't understand what does "CRASH" means in real state. Is it like stock that will go down 30-50%? Looking at the historic data I don't see any "real estate" crash. I see sub prime mortgage and insanity in appraisal which caused(foreclosure) the market to go down in 2008. Other than that value of real estate alway treanding up slowly but surely. Now what's going on last few years is abnormal. People bidding a house way over than it's actual worth. People had unnecesaary money from stimulus, the money they didn't have to work for. I think rising interest rate will slow that down and come back to normal. In addition we are short 5 million houses. Is that some folks refering this as crash? does it make sense one day we will wake up and see on zillow our house worth 50% less than prior day? Or I am spending too much time on social media and news outlets?

You're spending too much time on social media and news outlet sites. Disaster drives clicks and views. Clicks and views drive advertising dollars. It's literally that simple.

Is it extremely likely that runaway housing prices are going to halt? Absolutely. They can only get so far out of whack relative to what the majority of people can afford before there ceases to be any buyers. However, no buyers does not mean a fire sale. More likely is that there will just be less sellers overall, and a smaller overall housing market period. That's not necessarily healthy for the US economy, since housing and ancillary businesses (real estate, financing, movers, furniture sellers, etc) is such a big part of GDP, but a stalled or shrunken market is not the same thing as a freefalling market.

Most social media and news outlets have no idea what they are talking about on any subject that requires more than 15 seconds of analyzation. Social media, more often than not, is a room full of ignorant, know-nothing fools shouting at each other based on their tribal beliefs. Most major media outlets won't pay anyone on staff to research any claim made by a writer - their job is to churn and burn stories.
Two things to remember:
"Pay no attention to that man behind the curtain" - the Great and Powerful Oz
"We all know that crap is king, give us dirty laundry" - Don Henley
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Scott E.
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
4y
As somebody who was a sub-prime mortgage loan officer in 2007-2008 and remained in the mortgage industry for following 14 years, I can say with confidence that this time it's different (from a quality of loan perspective)

The single biggest threat to the housing market in my opinion is if we enter a recession and these layoffs persist. We're already seeing layoffs in tech and fintech. If we continue to see layoffs across other industries and the unemployment rate starts to rise, then there are going to be a lot of people who are having a hard time affording their home (ESPECIALLY the people who got caught up in the frenzy and paid too much over the past 18 months).

I still don't foresee a crash in the market comparable to what we saw in 2008. But I do think there is risk of price decline in the short term. All that being said, I have no idea what I'm talking about. I'm not an economist, I don't have a crystal ball. I'm just a guy with an opinion.
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Conner Olsen
Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
4y
@Tanveer Ahmed People assume real estate is like stocks where in one quarter it can drop 30%. The national average median drop in home value was 22%. It took 2.5 years to go from the peak of 2007-2008 to the bottom of 2010-2011. It is not going to happen overnight.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y

That's pretty much what an economist is - a guy with an opinion 🤣 . It's largely a junk science (shouldn't even be called a science) and the closest thing we have to modern-day astrology. It's not all their fault - determining what the wholly irrational human animal will do given any particular set of events and circumstances is ridiculously difficult - but no other field could be so wrong, so often, and be able to have others take them seriously. By all rights, taken to its logical conclusion, economists should be the richest people among us - certainly the most successful investors, anyway. Isn't it amazing that entire teams of economists working with the federal reserve couldn't see what 95% of the people walking around could see when it came to inflation and the economy?
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Tim Ryan
Investor / Mentor / Contractor · Arcadia, CA Buying Out of State · Member since 2015 · 655 posts · 622 votes
4y
I do not see a real estate crash coming. However, I do see there will be many investors who bought the wrong way the past couple years that will be in trouble and maybe foreclosed on. If you bought a SFR up to large Multifamily with Interest only, highly leveraged, at the top of the price range, betting on rents increases, understating repairs and maintenance, then you will feel the pain. I have seen too many deals go this way. I like to say, if you need to use all the tricks to make a deal work, then it's not a deal. I have bought 17 buildings since 2018 and all are bought with solid metrics and all are cash flow positive. If those go down in perceived value I don't care. I'll wait it out. Investors need to learn to take risks -yes, but be very conservative and very good at their due diligence on deals.
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Adam Sieg
Member since 2022 · 48 posts · 119 votes
4y
Quote from @Scott E.:

As somebody who was a sub-prime mortgage loan officer in 2007-2008 and remained in the mortgage industry for following 14 years, I can say with confidence that this time it's different (from a quality of loan perspective)

The single biggest threat to the housing market in my opinion is if we enter a recession and these layoffs persist. We're already seeing layoffs in tech and fintech. If we continue to see layoffs across other industries and the unemployment rate starts to rise, then there are going to be a lot of people who are having a hard time affording their home (ESPECIALLY the people who got caught up in the frenzy and paid too much over the past 18 months).

I still don't foresee a crash in the market comparable to what we saw in 2008. But I do think there is risk of price decline in the short term. All that being said, I have no idea what I'm talking about. I'm not an economist, I don't have a crystal ball. I'm just a guy with an opinion.

Agree 100%. The other big difference (observation not because I was investing or in real estate in ‘08) is the supply vs demand issue. In 2008 we were starting to see a massive increase in supply but lowering in demand. Now their remains a huge shortage in inventory. This coupled with changes to lending make it significantly less likely we will see a “crash”.
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @JD Martin:

That's pretty much what an economist is - a guy with an opinion 🤣 . It's largely a junk science (shouldn't even be called a science) and the closest thing we have to modern-day astrology. It's not all their fault - determining what the wholly irrational human animal will do given any particular set of events and circumstances is ridiculously difficult - but no other field could be so wrong, so often, and be able to have others take them seriously. By all rights, taken to its logical conclusion, economists should be the richest people among us - certainly the most successful investors, anyway. Isn't it amazing that entire teams of economists working with the federal reserve couldn't see what 95% of the people walking around could see when it came to inflation and the economy?

@JD Martin: You are much too kind to the Fed. Of course they knew, but there are political reasons it was brought to the public the way it was. We are assured by the president himself that we are in the best economy ever. Mid terms you know, mid terms. (November elections are coming) People vote their pocket book and the Govt wants things to look better than they are.

The Fed will raise rates again and again but the claim will be that inflation is now tamed (for the mid terms.) Then it will be back to trying to control inflation and economic chaos.

If I can figure out the economy is in dire straights, the Fed can figure it out too.
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Scott AllenBusiness Member
Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
4y
@Tanveer Ahmed
Rising interest rates will effect people's buying power but it is necessary with the amount of money that got pumped into the economy over the passed 2 years. Anytime you watch the news, it's always bad news. It's easier to just not watch the news and ignore the bandwagon. If you can find a good deal, buy it and stay focused long-term. Every catastrophe is also an opportunity. Hindsight is 20/20

[email protected]614-698-1227
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Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
4y
Quote from @JD Martin:

That's pretty much what an economist is - a guy with an opinion 🤣 . It's largely a junk science (shouldn't even be called a science) and the closest thing we have to modern-day astrology. It's not all their fault - determining what the wholly irrational human animal will do given any particular set of events and circumstances is ridiculously difficult - but no other field could be so wrong, so often, and be able to have others take them seriously. By all rights, taken to its logical conclusion, economists should be the richest people among us - certainly the most successful investors, anyway. Isn't it amazing that entire teams of economists working with the federal reserve couldn't see what 95% of the people walking around could see when it came to inflation and the economy?

I’m not sure if this is a fair view of the academic field of economics. Concepts like Supply & Demand can be observed in markets all over the world, large and small, going back thousands of years. Along with the impacts that forced manipulation of pricing can have on both supply, or what happens when you print more money. I’d say that in the social science world, Supply & Demand is arguably the equivalent of the Laws of thermodynamics in the natural world in regards to where it sits on the hierarchy and how universal it is.

The Fed is primarily concerned with looking out for its own interest, ie the banks that fund it, not staying true to foundational economic principals.
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
. I think rising interest rate will slow that down and come back to normal. In addition we are short 5 million houses. Is that some folks refering this as crash? does it make sense one day we will wake up and see on zillow our house worth 50% less than prior day? Or I am spending too much time on social media and news outlets?
-->
Here's the data:
1. Normal appreciation nationwide : 3-4% per year
2. last two year appreciation : 18 - 20%
3. So home value today is overvalued 15-30% without inflation-adjusted
4. However, home price dynamic are much more complicated than that, in the past, home price declines are marked by increasing home months supply rather than fed interest rate and mortgage rate
5. So unlike equity market, even Fed chairman can't predict what will happen next, they can only monitor
6. In straight english, if nobody is selling their homes, home price is not going to fall. Vice versa.
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Quote from @Jon Martin:

Quote from @JD Martin:

That's pretty much what an economist is - a guy with an opinion 🤣 . It's largely a junk science (shouldn't even be called a science) and the closest thing we have to modern-day astrology. It's not all their fault - determining what the wholly irrational human animal will do given any particular set of events and circumstances is ridiculously difficult - but no other field could be so wrong, so often, and be able to have others take them seriously. By all rights, taken to its logical conclusion, economists should be the richest people among us - certainly the most successful investors, anyway. Isn't it amazing that entire teams of economists working with the federal reserve couldn't see what 95% of the people walking around could see when it came to inflation and the economy?

I’m not sure if this is a fair view of the academic field of economics. Concepts like Supply & Demand can be observed in markets all over the world, large and small, going back thousands of years. Along with the impacts that forced manipulation of pricing can have on both supply, or what happens when you print more money. I’d say that in the social science world, Supply & Demand is arguably the equivalent of the Laws of thermodynamics in the natural world in regards to where it sits on the hierarchy and how universal it is.

The Fed is primarily concerned with looking out for its own interest, ie the banks that fund it, not staying true to foundational economic principals.

Wanna add few things here, any asset going up or down really depends on the supply side.

Public stock supply really depends on the number of shares available, however most company increases the stock price these days by buyback (funded by cheap credit) which artificially inflate the price and issues more stocks. Once the music stops, company has no incentive to do buyback and more focus on real fundamental to create cash-flow/divident to the investor. Hence the stock can go down faster than the way up as the number of supply is more available to the market.

Crypto, nobody in the world knows how many available bitcoin/eth outside because there's no regulation oversees this aspect.

Real estate, and the beauty of this is that we know how many supplies available in the market. We know exactly how many houses is being sold. The beauty of real investment is not only that, but since 90% is financed by very long term mortgage and low interest rate since 2007-2008 ; hence there's not many sellers are willing to sell their house, except if there's life event, they're retirees that will migrate or there're massive layoffs/business shutdown in the area.

If there's real estate price adjustment in the market, it will affect the luxury market first because that's the most expensive one, followed by new construction since builder has to sell quickly. The most unaffected real estate market is the cash-flow market.
3 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Outside of your question about values coming down by 50%, your commentary is on point. There have been tens of thousands of crash posts and replies on the forums for the past eight years and while some members spend their time talking about a potential crash, other members spend their time making money (while always mitigating for a correction).
There are two types of investors...those who buy the market and those who market to buy. When you are the former, market conditions can matter. When you are the latter, there are always opportunities.
10 Reply
Michelle Reid
Rental Property Investor · MA · Member since 2019 · 86 posts · 37 votes
4y
I find it never pays to prognosticate.
As an investor in 2008, I've learned to hope for the best, prepare for the worst.
Rents CAN go down. Property values will definitely go down at some point during your ownership.
In 2009.  We went from 80 inquiries for vacancies to 2. I still don't know where they went. Doesn't matter. All I know is they went.
Don't over leverage. Don't over pay.  Be sure to have resources to cover 3 - 6 months vacancy. Depending on your comfort level.
Otherwise, the consequences could be bankruptcy. Especially if you have several properties that may go vacant and simultaneously have equity go negative. That is a deadly combination. Ask anyone who's lived through it.
If you can have cash or credit available during a correction, even better. Take advantage of the dip.
Cover those items and you will not need to worry about where the market is going.
12 Reply
Tim G.
Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
4y
Is there a percentage drop that qualifies for a crash? A bear market in stocks is a 20% decline.
Like most of the folks I respect on this topic, you preface it with "I don't have a crystal ball" but I'm on the more conservative side, I felt strongly the market was doomed when covid hit but I didn't anticipate such aggressive moves from the FED. "Don't fight the FED" I've learned is something to pay attention to. So this time around, with the FED not being on board to kick this can down the road (so far) I think we are about to feel some pain and some are going to feel a lot of pain.

Areas of concern and weakness in housing.
1. AirBnb Hosts should bookings drop due to lack of disposable income for travel / Govt regulation / Needing to refinance and not cash flowing at new interest rates. Do they sell or rent long term? Can they cash flow on long term renters? Will they want to hold and ride it out.
2. Florida homeowners or other hurricane states should homeowners insurance continue to be less and less available affordably.
3. Brrr investor who didn't get their refi complete in time to cash flow with current rates.
4. Syndicator investor who cannot cash flow with current rates
5. House flipper who purchased an objectively inferior home (busy road, power lines, bad layout) and expected it to sell near better comps.
6. Markets where development is prevalent, builders will cut prices and sell creating new low comps.
7. Investors/flippers in any market where sales comps start to trend downward. The low interest rate home owner might cancel listing and rent, but the flipper, the person who inherited Dad's old dirty house, couples separating and unable to agree on how to keep one person in the home, the remote worker who can't find remote work anymore. Most of them are going to sell creating new lower sales comps.
8. The 10x investor who didn't keep enough safety net to ride out the storm. They will have to unload some deals to save others.

All of these people could be forced to sell real estate at a loss. I can't see how a 20% decline isn't possible, we're already seeing 5% price cuts in my market of San Diego. Everything will happen within a range, some markets worse, some better, some houses worse, some better. Buyer sentiment is not improving and with 2008 being the only memory of a housing crash to a good portion of the population, their behavior is likely to lead them to sit and wait further eroding buyer sentiment.

I've felt sad and stressed about the market shifting, and folks seem super quiet on the topic right now. I think buyers are not going to participate and it will bring prices down, how many people participate in the selling side is a mystery to me.
11 Reply
Eric Bilderback
Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
4y
This is my favorite topic so thank you for that. That being said I believe that we are headed for some hard times. I think we could see something worse than the GFC but I think it will be on the inflationary side. I don't believe the Fed can walk this tight rope up forever, so far they have proved me wrong. At some point Americans will consume what they produce and because we have outsourced all of our production that will be pretty thin rations for the average American.

I am concerned for the country but as an individual investor I maybe a little more cautious than usual but if I see a place that I am confident will pay my mortgage for 30 years, will rent in good times and bad with a little margin I think you can buy it and sleep well at night.

FYI we all spend to much time reading that stuff or else none of us would be here. LOL
2 Reply
Jonathan R McLaughlin
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
4y
@Tanveer Ahmed your comment that interest rates will “slow down and come back to normal” highlights how real estate encourages short term memory: the rates now are still below mid-late 20th century norms. It’s the last bunch of years that have been the exception
I think you are right about inventory. Still short, and the two are tied together. You aren’t going to have panic selling if people are sitting on an3% mortgage
2 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
4y
@Tanveer Ahmed
I foresee two scenarios, one being a panic/fire sale. Two, the opposite, people are going to refi and hold their houses through the economic storm. Either way, position yourself correctly as you can. It’s about to be an interesting ride.
0 Reply
Gary Mazz
Member since 2018 · 9 posts · 5 votes
4y
One other big factor to consider in home pricing, which I didn't see anyone mention here, the cost of construction materials and labor, neither of these are dropping (yet) and I don't think they will. It's all about demand, if demand stays strong prices will remain elevated or adjust slightly due to rates. In the market I follow there are approximately 12,400 homes listed on the local MLS and only 700 or so price adjustments for the week. I don't think only 5 % of homes listed making small price adjustments is anything huge, but could be signaling what's to come. Closely monitoring our local markets is critical now.
1 Reply
Gary Mazz
Member since 2018 · 9 posts · 5 votes
4y
One other big factor to consider in home pricing, which I didn't see anyone mention here, the cost of construction materials and labor, neither of these are dropping (yet) and I don't think they will. It's all about demand, if demand stays strong prices will remain elevated or adjust slightly due to rates. In the market I follow there are approximately 12,400 homes listed on the local MLS and only 700 or so price adjustments for the week. I don't think only 5 % of homes listed making small price adjustments is anything huge, but could be signaling what's to come. Closely monitoring our local markets is critical now.
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Quote from @Tim G.:

Is there a percentage drop that qualifies for a crash? A bear market in stocks is a 20% decline.
Like most of the folks I respect on this topic, you preface it with "I don't have a crystal ball" but I'm on the more conservative side, I felt strongly the market was doomed when covid hit but I didn't anticipate such aggressive moves from the FED. "Don't fight the FED" I've learned is something to pay attention to. So this time around, with the FED not being on board to kick this can down the road (so far) I think we are about to feel some pain and some are going to feel a lot of pain.

Areas of concern and weakness in housing.
1. AirBnb Hosts should bookings drop due to lack of disposable income for travel / Govt regulation / Needing to refinance and not cash flowing at new interest rates. Do they sell or rent long term? Can they cash flow on long term renters? Will they want to hold and ride it out.
2. Florida homeowners or other hurricane states should homeowners insurance continue to be less and less available affordably.
3. Brrr investor who didn't get their refi complete in time to cash flow with current rates.
4. Syndicator investor who cannot cash flow with current rates
5. House flipper who purchased an objectively inferior home (busy road, power lines, bad layout) and expected it to sell near better comps.
6. Markets where development is prevalent, builders will cut prices and sell creating new low comps.
7. Investors/flippers in any market where sales comps start to trend downward. The low interest rate home owner might cancel listing and rent, but the flipper, the person who inherited Dad's old dirty house, couples separating and unable to agree on how to keep one person in the home, the remote worker who can't find remote work anymore. Most of them are going to sell creating new lower sales comps.
8. The 10x investor who didn't keep enough safety net to ride out the storm. They will have to unload some deals to save others.

All of these people could be forced to sell real estate at a loss. I can't see how a 20% decline isn't possible, we're already seeing 5% price cuts in my market of San Diego. Everything will happen within a range, some markets worse, some better, some houses worse, some better. Buyer sentiment is not improving and with 2008 being the only memory of a housing crash to a good portion of the population, their behavior is likely to lead them to sit and wait further eroding buyer sentiment.

I've felt sad and stressed about the market shifting, and folks seem super quiet on the topic right now. I think buyers are not going to participate and it will bring prices down, how many people participate in the selling side is a mystery to me.

The Freddie Mac actually runs 140x levered position. But they're a government agency so the gov. could bail them out if they're in bad position.

The private sector that has a relevant tie with FM is Mortgage REIT industry, this unique industry is very unique because they buy low 30YFRM from MBS and hedge it with 10 years note, as the spread grows, their book value goes down and at this position, they lost 50-60% book value.

Eventually, if the rate keeps going up, the FM needs to be rescued by the government. May be. I don't know <---

In most other countries, the mortgage industry is shaped by shorter variable-loan and 100% executed by private sector, unlike in US where it's executed actually by the government.

Relevant article: https://www.wsj.com/articles/a...

I don't know what will happen to FM. I always have question about them.
0 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
Being an old geezer that has been through multiple economic cycles, I believe we're in for some challenges over the next few years. I don't see a housing crash. Home prices have a correlation to new construction. If you can build a new house for less than what you paid for an existing home you're likely to be upside down. I see home prices flattening but not dropping in any significant way (other than a few crazy markets mostly on the coasts). I think many homeowners have refinanced to lower rates and are not going to want to move unless required. So they won't be purchasing homes but they also won't be selling their home thus the impact on inventory is negligible.
As always, real estate comes down to the numbers and I've seen lots of discussions where people are discounting investor rules of thumb because they won't work at the present price structure. I feel many "investors" have ignored common sense and purchased properties hoping appreciation will pry them upward and they may be hurting if there's no positive cash flow or their "cash flow" was built on overly optimistic data. So continue to look for the deals out there and carry on. There's money to be made in any market situation but be wise.
3 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
4y
@Tanveer Ahmed I don't think we'll see a crash but imagine if prices don't go down, which I don't think they will and rates continue to go up, which I personally think they will.
That puts us in a place where it's extremely hard to make money with rentals because your debt is so expensive.
Also, don't spend any time with the news and very little with social media. They're both toxic and the loudest voices on social media are either profiting from your attention or weren't going to do deals anyway. It's time to put your head down and go to work!
[email protected]512-888-9122
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3 Reply
Dwayne Poster
Investor · Van Isle · Member since 2021 · 455 posts · 226 votes
4y
What I see is a larger movement based on the wave of baby boomers handing over the reins, in an analogues stock split. Covid may have facilitated the timing, but nothing more. It's done. It will be known as the greatest housing grab. Interest rates will wobble the market for a couple of years, builders will overbuild, and the long slow slide into depression gets underway. Regardless, there will be opportunity for those that learn how to operate in those environments. Those that were active investors during the eighties will have a good feel for what's coming.
0 Reply
Justin Thorpe
Member since 2020 · 437 posts · 675 votes
4y
RE has much better fundamentals. If you look at the ration of ARMs, ARM resets, total equity people hold in their homes, LTV's, all those metrics are overwhelmingly in a better place than 2008, its not even close. The X factor is if unemployment starts to climb quickly and people get behind on payments. But it is not easy to "create" unemployment given the backlog of jobs we have right now. So I'd say rest easy.
NOW if you are one of those who "did a lot of crypto" then I may have a different message for you.
0 Reply
Dom Cassissa
Staten Island, NY · Member since 2021 · 26 posts · 19 votes
4y
Quote from @Scott E.:

As somebody who was a sub-prime mortgage loan officer in 2007-2008 and remained in the mortgage industry for following 14 years, I can say with confidence that this time it's different (from a quality of loan perspective)

The single biggest threat to the housing market in my opinion is if we enter a recession and these layoffs persist. We're already seeing layoffs in tech and fintech. If we continue to see layoffs across other industries and the unemployment rate starts to rise, then there are going to be a lot of people who are having a hard time affording their home (ESPECIALLY the people who got caught up in the frenzy and paid too much over the past 18 months).

I still don't foresee a crash in the market comparable to what we saw in 2008. But I do think there is risk of price decline in the short term. All that being said, I have no idea what I'm talking about. I'm not an economist, I don't have a crystal ball. I'm just a guy with an opinion.

What do you make of Zillow, Redfin & Compass all laying off 10-15% of their workforce?
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