Markets crashing that will be good investments next year?

Question

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Scott E. · Answer

To answer the question in your subject line, I'm going with Scottsdale (yes I'm biased, I live here lol).

Prices skyrocketed around Scottsdale after the pandemic, and they have plummeted around here over the past ~8 months or so. That is pretty common to see more dramatic price swings in this region.

But I'm looking at the fundamentals as to why prices went up so much in Scottsdale to begin with. And I'm paying attention to all of the things that you should be looking at when picking a sub market - Job growth, migration data, inventory, permits issued, weather, etc. And all of those fundamentals for Scottsdale are still very strong.

So all that being said, I think there currently is and will continue to be a lot of deals/opportunities around Scottsdale for the next couple of quarters at least. Then a rebound afterwards.

(Disclaimer - I have no idea what I'm talking about. Nobody has a crystal ball. This is just how I feel about the situation.)

Nicholas L. · Answer

I think the places with the biggest declines will be the most expensive markets.

Marcus Auerbach · Answer

I think a lot of people don't consider the seasonality of prices enough.

In Milwaukee we have usually a 12-14% swing between peak and trough (June vs Jan) - every year. That's why Q4 has always been by favorite time to buy. So the fact that prices have gone down since June is normal and not necessarily an indication that the market has changed direction. In fact, Milwaukee prices have been remarkably stable since summer, held up by strong buyer demand, despite 7.5% interest rates.

Now rates are falling, more buyers are coming back from the sidelines, my guess is we might have a hot spring market.

PS: when you look at the chart below you can see that markets with a colder winter have a more pronounced seasonality (Boston vs LA)

Account Closed · Answer

Your comment: "You also have 24M americans who can no longer afford a home" isn't actually the true picture.What is accurate is "You also have 24M americans who can no longer afford a home In expensive cities"https://housegrail.com/how-man..."The number lags some, but currently, there are about 15 million vacant homes in the United States."There are many migrations in American history where people who couldn't afford land or a house or find a job simply went to where things were cheaper or where the jobs were. There is no part of the Constitution that guarantees an American a house without putting forth the effort to buy it. There is currently a lot of opportunity, people have to realize that sometimes you move to another place to make things happen. Or, . . . they can become a lazy whiner that doesn't deserve our time to worry about. No offense meant to you, just offense meant to the people that complain.

Account Closed · Answer

Why do you believe the market is crashing?

Henry Clark · Answer

Looks like you have 25 Doors in Akron. I would ask your question from a city or regional level and not across the board.

1.   Will there be a stock market crash.   You decide, then you take action.  Forget the rest of us. If you think there will be a crash then I would be setting up significant lines of credit, possibly even taking the cash and sitting on it, so the bank doesn’t withdraw the working line.

2.  Will a stock crash lead to lower house prices next year?  Depends and no.  Depends on the price of the house and who owns it.  Lower priced houses the stock market won’t impact the owners unless they get laid off.  Higher priced house will be impacted more, but depends on their financial position.  Foreclosures won’t come thru for another year. 3.  Akron Ohio.  Look at prices before and after the most recent crisis.  That will be a more specific answer to your question which to me is local to my investment area.  I’m sure Phoenix and Las Vegas are different than Akron as to the impact.

What are your thoughts and what actions are you taking?  Thanks.

Chris Seveney · Answer

Volumes have already crashed from over 6M to just over 4M. You also have 24M americans who can no longer afford a home. There is limited supply but even less demand right now. Inflation is FAR from over, interest rates my guess are going to be 5%+/- next few years. As an analytics person, every chart I see shows prices coming back down to 2020ish levels which are still awesome for everyone who bought before 2020.

Kevin Wann · Answer

Half of the US will be on sale thru the next few years.  But why wait, just keep buying on the way down.

Eliott Elias · Answer

Why wait for the market to crash? Why not buy severely under market value?

Markets crashing that will be good investments next year?

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