All Things Kansas.
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Prices declining in 12 months isnt a bubble bursting. It's just stagnation.
YouTube is a dangerous drug.....PhDhawk wrote: ↑Tue Jul 21, 2020 3:10 pm who said I was bothered by it?
This thread is now 7 pages long because you won't shut up about it, that's why I responded. You act like you're saving us all from impending doom, or giving us some insider trading tip. I don't understand what you're doing? You made a prediction it was wrong, now you're moving the goal posts. That doesn't make you Nostradamus, it just means you were wrong.
He will tell you in 2022. Of course, it will be 4 user names from now.
You were wrong about the housing crash in the Winter of 2019 (and won't admit it). Why would anyone believe you now? Your timing wasn't "off a little." It was dead wrong. Why is it so hard for you to just admit that you're a goof and you just make shit up? We all already know it. We're just waiting for you to man up*.Walrus wrote: ↑Tue Jul 21, 2020 2:52 pm I don't care you believe me. The crash of the stock market and real estate (both residential and commercial) is coming. Billionaires are shorting commercial real estate -- why would that be? My timing was off a little, but it's going to happen. Those on here who are more sincere might try to prepare their retirements accordingly.
lol.
But you didn't factor in Covid-19 in your prediction. You couldn't have, since it wasn't around.Walrus wrote: ↑Wed Jul 22, 2020 3:34 pmlol.
https://markets.businessinsider.com/new ... 1029373327
"US home prices will fall 6.6% over the next year as COVID-19 fallout worsens, report says"
Lots of good points, but you have to remember the most important problem that I've stressed over and over again -- housing was in a massive bubble in the cyclical markets. It was designed that way for several reasons. When I say cyclical, I'm talking about the expensive, overvalued areas (Los Angeles, Denver, Seattle, etc.). I'm not talking about Lees Summit Missouri. When an artificial bubble is there, it will burst sooner or later. Covid was the pin. I knew this was going to happen eventually, as the entire US economy is based on debt, consumption and borrowing more and more with producing very little. Numerous real estate investors were predicting way back in 2019 that we would see a recession in 2020 because of several existing problems with the economy. While I didn't expect it to be this hard, I knew a recession was coming regardless. We were in the longest bubble expansion in history -- that alone should have been the biggest red flag. Anyway, my timing was off, but I was right and it is already happening, at least out here in California. Some of us are educated to know the signs (and others aren't).IllinoisJayhawk wrote: ↑Wed Jul 22, 2020 4:14 pm The good thing, assuming we are talking about primary residences in the under $500k range (relative to central IL prices), is that should you be able to stay in it for another 3-5yrs it will almost certainly rebound to where no loss is actually realized.
I cant/wont speak to large cities or high priced markets quite as well because those definitely seem to be more volatile imo. There are just so many factors that go into real estate that it is hard to make blanket statements that hold true everywhere....for instance my parents bought a pretty nice condo when i was in high school in myrtle beach. In a very a good spot in a development with 4 worldclass golf courses (Barefoot Resort in NMB), and we used it a ton (i even lived in it full time for 3 years after college)...But the developers kept building and kept building (which i get, that is their job), but they didnt know when enough was enough apparently and eventually drove the prices way down on themselves inadvertently because they oversaturated their development. For the first 10 years or so the condo increased in value quite a bit, then things kind of leveled out (mind you this was all in the 2000s until about 2015ish when they eventually sold, so there was a housing crash in there too), then the developers went about 5 or 6 buildings too far (so 100ish condo units or so) and then things went splat. My parents didnt lose a ton of money on it, i think they bought it for 25k more than they sold it for, but at one point they could have came out way ahead....now when you factor in all the times we went for family vacation and the 3yrs it was my primary residence it was still worth it overall, but imo had those developers slowed down on building with the "if we build it they will come" strategy i think they would have come out a little better. Still to this day i think there are a handful too many condos that push the vacancy rate up enough to where sellers have to price too competitively to compete with the developers just trying to unload condos they built that have been sitting empty since construction.
Sorry probably tldr but real estate is so area specific that it got me thinking....
Totally get the aspect of cyclical markets....which i guess is why they are cyclical in a way?...i definitely dont know enough about LA or Vegas real estate to even attempt to dive into that sort of analysis.Walrus wrote: ↑Wed Jul 22, 2020 4:22 pm Lots of good points, but you have to remember the most important problem that I've stressed over and over again -- housing was in a massive bubble in the cyclical markets. It was designed that way for several reasons. When I say cyclical, I'm talking about the expensive, overvalued areas (Los Angeles, Denver, Seattle, etc.). I'm not talking about Lees Summit Missouri. When an artificial bubble is there, it will burst sooner or later. Covid was the pin. I knew this was going to happen eventually, as the entire US economy is based on debt, consumption and borrowing more and more with producing very little. Numerous real estate investors were predicting way back in 2019 that we would see a recession in 2020 because of several existing problems with the economy. While I didn't expect it to be this hard, I knew a recession was coming regardless. We were in the longest bubble expansion in history -- that alone should have been the biggest red flag. Anyway, my timing was off, but I was right and it is already happening, at least out here in California. Some of us are educated to know the signs (and others aren't).
There's a few things that create cyclical markets. First is, speculative buying. People buy because they believe they can flip it to someone else in a year or two. This works in the short term, until someone is the last fool holding the bag when prices decline. People were doing this in 2004-07, and people were doing it again from 2013-2020. Another reason has to do with the artificial shortage. There's actually thousands of homes in foreclosures and pre-foreclosure that were taken off the market or never put on the market in order to drive up prices. The airlines are actually doing this right now in the same way in that they've taken more planes out of service so they can charge more per flight. Another reason they exist is that the governments love asset bubbles because it will make some people very rich and produce a lot of property taxes. When home prices decline, government revenue declines. Therefore, governments love asset bubbles. Many experts believe we've seen the last time you will see an asset bubble in housing for at least 20-30 years. The 2020 cyclical US housing market is looking more like Japan in the 1980s. To be clear, homes would normally be higher in places like California and New York because of demand, but nowhere near what they are right now if we actually had a free market. The real value of these homes is reflected in the CPI, which would be about 40-50% less than current prices. The real scary thing is that our entire country was in a bubble pre-covid and the air is coming out. Many of these things are going to be a severe problem going forward (student loan debt, commercial real estate, vacation rentals, auto loans, etc.).IllinoisJayhawk wrote: ↑Wed Jul 22, 2020 6:02 pmTotally get the aspect of cyclical markets....which i guess is why they are cyclical in a way?...i definitely dont know enough about LA or Vegas real estate to even attempt to dive into that sort of analysis.Walrus wrote: ↑Wed Jul 22, 2020 4:22 pm Lots of good points, but you have to remember the most important problem that I've stressed over and over again -- housing was in a massive bubble in the cyclical markets. It was designed that way for several reasons. When I say cyclical, I'm talking about the expensive, overvalued areas (Los Angeles, Denver, Seattle, etc.). I'm not talking about Lees Summit Missouri. When an artificial bubble is there, it will burst sooner or later. Covid was the pin. I knew this was going to happen eventually, as the entire US economy is based on debt, consumption and borrowing more and more with producing very little. Numerous real estate investors were predicting way back in 2019 that we would see a recession in 2020 because of several existing problems with the economy. While I didn't expect it to be this hard, I knew a recession was coming regardless. We were in the longest bubble expansion in history -- that alone should have been the biggest red flag. Anyway, my timing was off, but I was right and it is already happening, at least out here in California. Some of us are educated to know the signs (and others aren't).
Myrtle Beach may he considered somewhat of a cyclical market i suppose. I am not sure of the % that are true full time residents, but i would guess the % of properties owned as 2nd homes or rental properties may be high enough to be considered something similar to a cyclical market.
Myrtle beach for example was a victim of the "golf bubble"...when golf exploded around the time Tiger took off and maybe a little before, myrtle beach had a rush of newly developed golf courses surronded by residential/multifamily development communities....at some point that bubble burst on them as there were several really expensive golf course developments that failed and ended up ceasing to exist (some just sit overgrown and vacant, surronded by homes/multifamily properties that decreased in value greatly and tend to be non owner occupied, others converted into strip malls and things of that nature).
Personally, my previous thought was always that the moment rates went up would be when home prices would start falling, but they have kept rates so low for so long now that there hasnt been a chance for that to happen. Especially in areas like mine where property taxes are so high, a hypothetical 2% bump in rates would greatly reduce how much house many people can afford....now it is possible maybe IL will start to work on property tax reform (at least on residential) around the same time to help offset the eventual increase in rates (because i cant imagine they can keep them this low forever?).