I'm wondering what you lads make of real estate at the moment - I seem to recall some mortgage broker here a year or so ago noting some sub-prime style practices happening again - have you any population and demographic based assessments what might happen? Implications of a sovereign debt collapse, social security and public pensions' impacts on increasing imposition of property taxes, etc?
See it seems like sod's law to me any kids buying now should be stuck with a stagnating liability from these highs.
I think a housing market correction is due, but it will be short lived unless the entire economy collapses, in which case a housing market correction will be the least of societal concerns. We'd see unemployment rate sky rocket and people defaulting on their loans left and right. Banks would collapse. There would be no way to collect, lawsuits would be frivolous. Houses would be on huge discounts but nobody would be buying except ultra rich people. We'd enter a state of extreme wealth division where people who used to be middle class would now be impoverished. Either the government would then dump an enormous amount of money in to revitalize the economy and essentially give people their houses back through low interest rates and new lines of cheap credit or we'd be looking at a 10+ year recession like we've not seen since the great depression.
I think what's way more likely is the government will preemptively avoid that shitstorm, we'll see a housing slow down and in some markets a slight pullback, while salaries continue to rise and building can/will continue & people will keep buying homes. Cities will likely sprawl outwards more and upwards more. Cities like NYC which are packed to the brim will continue to boom.
Ayden Howard
I think we are good until 2022.
Benjamin Garcia
Thanks for that's a considered answer at least. Some of what you're saying here is speculation, some of it speculated additional consequences - so I'll just start with some of the assumptions:
>I think a housing market correction is due, but it will be short lived unless the entire economy collapses.
So in your mind at the moment where would such a "collapse" come from? What do you make of a possibility for emerging markets to do something you don't expect?
>Either the government would then dump an enormous amount of money in to revitalize the economy and essentially give people their houses back through low interest rates and new lines of cheap credit
Are you imagining they'd do that the same way they did last time or through some radical re-structuring of how this system operates?
> We'd see unemployment rate sky rocket and people defaulting on their loans left and right. Banks would collapse. There would be no way to collect, lawsuits would be frivolous. Houses would be on huge discounts but nobody would be buying except ultra rich people. We'd enter a state of extreme wealth division where people who used to be middle class would now be impoverished.
Because of a "collapse" instead of a slightly heavier price decline? How about a protracted period of stagnation?
>I think what's way more likely is the government will preemptively avoid that shitstorm.
How often has a government ever pre-empted a shitstorm? Aside from anything else - is there any use to a crisis which hasn't happened?
Julian Roberts
Why?
Easton Lee
Yeah, I remember that older post OP. If I remember correctly he started his own hedge fund. He was talking about how NON-QM mortgages were on the rise, and that not much has changed since 2008.
What I have noticed in my city is that property values were recently reassessed, and some people saw their taxes almost triple. Just more strain on long term residents; eventually the camels back will break.
I routinely keep hearing that 2020 will be the year for a real estate correction, and that is probably not far from reality.
Joseph Green
>and some people saw their taxes almost triple. Just more strain on long term residents
It obviously never comes from where it came from before - this is the issue. Something of an interesting theme is pensions and social security - bankrupt muncipalities having to push up taxes and people can't shift property the way they can some other sorts of assets.
So it's property taxes increasing slowly - how long they'll keep increasing I'm not sure - however it's a "windfall" you shouldn't have an issue with if you've seen your house up in price.
However high do such taxes have to start to be until they start to be seen as liabilities instead of assets as they stagnate?
Camden Davis
*how higher
See I just feel as if there is something intergenerational about this - it's only possible for something stupid to happen when people aren't really able to remember anything other than what's happened in their lives.
