What do you invest in?
Started by PharmaSex
Get help with your application
Use all the free resources available to you from SDN: articles, guides, expert advising, forums discussions, and school research.
Let’s say you are right and there is a mini crash. Let’s say it goes up 4% each year for the next 2 years then it dropped 10% on Year 3. Buying at year 3 is the same as buying at year 1. The price would be the same.
But let’s say you are wrong. Let’s say it goes up 4% each year for the next 3 years, then you decide to buy. You would be down 12%....12% out of $500 k house is $60 k. Not only will you be paying 60 k more for the same house but you would also need a larger down payment.
Nope. This is what I was asking about. When I mean "invest" i mean what you put your money towards for value.
Advertisement - Members don't see this ad
My colleagues in the VA Loan Guarantee (LGY) program say yes based on the the actual IRS returns from the Austin Automation Center compared with our own internal data on VA loan delinquencies. We learned nothing from the last crash on overleveraging. If you own a home that you can afford to live in, fine, but for HELOC and flipping, not advisable considering the performance.
There are exceptions based on geography, but homes in the jumbo and nonconforming categories are in serious trouble.
And also, that's not correct. If you think 2008 was crash territory, the 1906, 1933, 1937, and 1973 crashes were more severe downturns and market corrections on property. You might want to pick up a Quarterly Journal of Economics or Journal of Finance to see the actual performance.
right, it is currently a “sellers market” meaning there is a shortage of homes available. maybe the market wont crash but it will surely swing back to a buyers market in not too long, it always will yoyo. This white hot market isnt sustainable as homebuilders ratchet up. Not ideal to be buying in a sellers market, you have no leverage.
This really depends on the market. In chicago, I definitely see a crash. Prices have gone up faster than wages and there is a lot of property tax uncertainty surrounding the market. Illinois' population is declining and the new governor wants another tax hike. It's already a buyers market here. I see homes that have been listed for 200-300 days.
A correction is not a crash. A correction is 10% drop.
If you have data showing homeowners are over leverage, I would love to see it.
Chicago has been a poorly run city. Surrounding cities and states should benefit from Chicago’s misfortune.
Just keep in mind...homeowners are not going to take 6 figures loss on their home when they are still employed.
This is one of the reasons I felt great about selling my house this year. Just closed recently. Timing was perfect and I made a nice dollar in return.
It’s sad but - id rather the bubble burst in someone else's face.. Now renting a sweet luxury home for the time being.
This home has a Bluetooth system set up in the shower. I throw on some bee gees and it takes my morning routine to a whole new level. My shower time went from 15 minutes to a solid 35 minute soak. I even upgraded from common towels to bath sheets.
Damn - it’s good to be a pharmacist.
Last edited:
Haha I have a Bluetooth speaker in my shower (although I rarely use it anymore) and some luxury towels on a Black Friday sale years ago. It is hard to believe how much simple luxuries can make such a huge difference.
why did you sell? Was your job loss a factor?
I think it is a wet dream to believe RE will go down 30-40%. You gotta ask yourself....what would cause this to happen? Buyers today are in a way better position than 2006. So why would they sell their house at 30% loss? If they don’t get the price they want, they can just sit on their hands and not sell.
The funny thing is so many people think they would actually be the ones who benefit from a RE crash.
Do you know what needs to happen for there to be a crash? Massive job loss. The economy in the gutter.
So, let me ask you...would you still have a job then? Would you be in a position where a bank would lend you money? Would you have the gut to pull the trigger and buy a house when people are losing their homes left and right?
I ask this because most people did not benefit from the 2006 crash. The wealthy did but not your 9-5 joe.
Do you know what needs to happen for there to be a crash? Massive job loss. The economy in the gutter.
So, let me ask you...would you still have a job then? Would you be in a position where a bank would lend you money? Would you have the gut to pull the trigger and buy a house when people are losing their homes left and right?
I ask this because most people did not benefit from the 2006 crash. The wealthy did but not your 9-5 joe.
Yes - I lost my job due to company closure. I had to relocate (gasp! That’s a bad thing right!).
Anyways I landed a sweet new gig and it’s great. I have plenty of options so I am renting and sitting on my investment until I decide what I really want to do.
A 700k house in my area was worth 500k 4 years ago. So even if they bought in 2015 and the current value drops 100k, they're still up 100k. That's the kind of correction we're referring to. Most people bought for way cheaper before 2015 though. There are not many people who are upside down if they sell.
Advertisement - Members don't see this ad
Again, why should they sell if they are still working and can afford the mortgage? For prices to drop that much means a lot of people need to put that house on the market at the same time.
There are always houses for sale. The prices now are not sustainable because most working people can't afford them, that's why houses are sitting longer in some areas. If no one can afford them then the prices will eventually drop.
I can't speak for everyone, but there are going to winner and losers. I realized even with the great economy, there are lot cost saving measure cuts already - tech and pharmacists hours. It's scary what a recession would do especially we have flood of pharmacists graduating, remote order processing, etc.
Would I benefit from a recession? You bet. High seniority in a union job with enough cash to buy the house outright without financing. My SO make significantly more than me. I am not alone either.
Plenty of my coworkers are in similar or better situation than me. They have multiple homes and leverage to own multiple property. It's not just RE they invest in, but stocks as well.
I benefited from 2006 crash, but not as greatly if I have my finance together. This time I'm more prepare.
Do I think a recession is coming? Yes at the very least a correction. The signs are all there but people refuse to look or ignore. We won't know what cause it until it happen. People always say this time is different until it happens. Alot of greeds and prevention measure has been rolled back under the Trump administration and setting up to kick the can down to the next president in office.
Houses in my area already slowing down dramatically. I looked into data for 5 cities YTY and there are more inventory, take longer to sell, lower price in my area.
Who is going to buy these houses? Foreign money are being restricted and recent graduate are burden by student loan and limited hours. There was an article recently that said 70% of American can't afford to buy a house. We barely have some interest rate increase and the market react violently. SALT reduction will also impact affordability of the housing market.
Last edited:
You are misinterpreting price collapse vs price slowdown. Big difference.
Many well paid professionals are paying a high percentage, probably 50% or more or more of their incomes on their mortgages while having put well under 20% down. An event of mass layoffs could easily tank the housing market in coastal areas where many homeowners are overleveraged.
Does anyone here actively day-trade? DM Let's start a community and share tips. Especially on how to handle capital gains.
Cheers!
Cheers!
I actively invest in the stock market. Bought 10 shares of Nintendo today
this is where I think so many people make stupid decisions - obviously there are geographic issues - but to put in persepctive, I live in an area with a very hot real estate market - I put 30% down and my mortgage balance is just slightly higher than our annual combined income.
I don't see a crash soon, but I do think there will always be somebody left holding the proverbial bag
1973 was a very tough housing market it coincided with the Arab oil embargo and stagflation. My high school was newly built and opened in 1933. Lane Tech - a Chicago Public School. I think it was one of the largest public works projects going on at the time in Illinois. At that point the Depression was so bad that Chicago public school teachers had not been paid for 4 years. There is good film footage of protest marchers in the loop by the unemployed demanding "cash relief" welfare payments.
I never really invested in the stock market before (outside of my retirement accounts). Just opened an Ally Invest account the other day but haven't bought anything yet.
That Points Guy blog sounds interesting, I will probably check that out.
That Points Guy blog sounds interesting, I will probably check that out.
