Author Topic: Key Indicator Hints America Is Headed For Its Worst Real Estate Crash In History  (Read 335 times)

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Offline mystery-ak

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Key Indicator Hints America Is Headed For Its Worst Real Estate Crash In History
By: Justin Haskins
February 16, 2022

Although it’s impossible to predict economic crashes with certainty, a key economic indicator suggests the U.S. housing market is on the verge of an unprecedented crash, one that could end up being the biggest in America’s history.

Following the 2008 stock and real estate market crashes, the Federal Reserve, Democratic-led Congress, and the presidential administrations of George W. Bush and Barack Obama began an unprecedented effort to pump new dollars into the financial system — and, to a lesser extent, the economy at large.

The strategy behind the flood of quantitative easing, government takeovers, stimulus checks, and government welfare programs that followed was that the Fed, working in conjunction with Congress and the White House, needed to prop up the economy to keep it from sliding completely off the cliff.

One of the primary tools the Fed used to accomplish its goals was to keep interest rates at near-zero for years on end. From 1980 to 2000, the Fed’s federal funds rate — the primary driver of interest rates economywide — rarely dropped below 4 percent, and it was common for interest rates to be 5 percent or higher.

However, from 2009 through 2016, interest rates were consistently much lower than 1 percent. Beginning in 2017, the first year of the Donald Trump presidency, the Fed began to more aggressively raise rates, but it only briefly topped 2 percent in 2018 and 2019 before the Fed once again slashed rates to near-zero as part of its plan to address the effects of the Covid-19 lockdowns.

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https://thefederalist.com/2022/02/16/key-indicator-hints-america-is-headed-for-its-worst-real-estate-crash-in-history/
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Offline catfish1957

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Very plausible, especially if interest rates shoot up as expected

American public is already strapped for cash, and in fact I saw one data point that stated that 56% of Americans have Negative Net Worth.

Then add the fact if interest rates respond as expected in the era of Bidenflation, the ability of people being able to afford a loan that is so front loaded on debt, will make demand for homes drop like a rock.

Then the second shoe falls.....   No demand?  Over supply. and over supply means crashing prices.

Yep, not only is this an indicator, I'd call it a inevitabiity.
« Last Edit: February 16, 2022, 04:07:57 pm by catfish1957 »
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Offline DefiantMassRINO

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In the Northeast, housing prices are high because snob zoning rules prevent housing construction to keep pace with demand.

If anything, lack of affordability may drive economic migration from the Northeast to the South and Midwest.
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Offline Wingnut

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When the crash comes it will be a great time to buy. 
I am just a Technicolor Dream Cat riding this kaleidoscope of life.

Offline Kamaji

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When the crash comes it will be a great time to buy. 


I was thinking the same thing.

Offline catfish1957

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When the crash comes it will be a great time to buy.

Will depend on the state of our currency.  That crash may be concurrent with other "bad" things that will happen to our economic system.
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Offline Fishrrman

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I'd like to see real estate prices drop 50-60%.
Really.

I could buy something nice for cash.

(I paid off this house many years ago -- got tired of paying the mortgage, so just sent the bank a final check for the balance and was done with it).

Offline IsailedawayfromFR

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What surprises me is the continued resiliency of real estate amounts within the hubs of major cities.

It is strange that more people have not fled to safer, cheaper and more free locales.
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Offline sneakypete

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I have no trouble at all believing that is going to happen.  Inflation has raised the price of houses to astronomical levels,while cutting away at the disposable income of the typical worker.

Something HAS to give.
Anyone who isn't paranoid in 2021 just isn't thinking clearly!

Offline sneakypete

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What surprises me is the continued resiliency of real estate amounts within the hubs of major cities.

It is strange that more people have not fled to safer, cheaper and more free locales.

@IsailedawayfromFR

Not really. Most people are joined at the hip to the jobs they are working,and just can't afford to take the financial hit that moving somewhere else would lay on them.

Especially when you consider that due to inflation most people wouldn't be able to sell their houses and come up with the money to buy another house somewhere else.

Add starting out in a new job at near the bottom of the pay scale,and it is practically impossible for most people.
Anyone who isn't paranoid in 2021 just isn't thinking clearly!

Offline IsailedawayfromFR

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@IsailedawayfromFR

Not really. Most people are joined at the hip to the jobs they are working,and just can't afford to take the financial hit that moving somewhere else would lay on them.

Especially when you consider that due to inflation most people wouldn't be able to sell their houses and come up with the money to buy another house somewhere else.

Add starting out in a new job at near the bottom of the pay scale,and it is practically impossible for most people.
Yes, jobs are important, but as the truckers north of us have proved, so is freedom.

Not all are yoked to the big city and can leave.  The truly eerie thing is who is wanting to move voluntarily there into the vacated buildings and purchase those houses and businesses?
« Last Edit: February 17, 2022, 01:49:15 pm by IsailedawayfromFR »
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Offline sneakypete

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Yes, jobs are important, but as the truckers north of us have proved, so is freedom.

Not all are yoked to the big city and can leave.  The truly eerie thing is who is wanting to move voluntarily there into the vacated buildings and purchase those houses and businesses?

@IsailedawayfromFR

I think many opinions  have changed since the 1950's. The biggest change may be most people that grew up in the 50's dreamed of moving to "the big city" to earn all that big money.

Seems like the Big Dream for today for most people is to get enough money put aside to move OUT of the big cities.

Don't believe me,ask anybody already living in a rural area about their new butthole neighbors.

I was at the polling place casting my vote one day when a woman wearing a mink coat actually had the gall after listening to my conversation with a friend to ask "You are the one that lives on that island with all the antique cars in the yard? When are you going to get rid of them? They are an eyesore when I drive by there."

She didn't much like my reply when I told her it was none of her bleeping business what I had or didn't have in my yard,and if she hated it THAT much she should offer me enough cash to sell to her and move out. If not willing to do that,she needed to stop driving my my place and looking,and to STFU about it and take her wrinkled old ass back to whatever yankee hellhole she left to move here.

I just have a way with words. Comes naturally.

And truth to tell,it looked to me like her husband enjoyed hearing someone tell the bitch off. Sure looked like he was struggling to hold back a smile.

BTW,I own 13 acres on an island,and am the only house here. No one else can build because of environmental laws and how high the water table is. I am "grandfathered" so there is nothing the county or the state can do about me.

I even have county water and a state-maintained dirt road,thanks to there being a couple of dozen houses here back in the 30's. The one I bought dated back to slavery days and the kitchen was actually separate from the rest of the house,and there was a covered walkway to it.

It was also the only house left standing on the island. I had already replaced it before it burnt down during a marsh fire. It was so rotten you could crumble the corner posts with your hand.

Paid 11 grand for the 13 acres and the house in 1980. Have considerably more in it today,but knew that was going to be necessary when I bought it. Seems like there ain't no such critter as a used house that doesn't need pretty much everything. Sometimes it really is cheaper and more practical to just go ahead and replace the whole damn thing instead of trying to repair everything wrong with it.



« Last Edit: February 17, 2022, 02:27:28 pm by sneakypete »
Anyone who isn't paranoid in 2021 just isn't thinking clearly!

Offline IsailedawayfromFR

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@IsailedawayfromFR

I think many opinions  have changed since the 1950's. The biggest change may be most people that grew up in the 50's dreamed of moving to "the big city" to earn all that big money.

Seems like the Big Dream for today for most people is to get enough money put aside to move OUT of the big cities.

Don't believe me,ask anybody already living in a rural area about their new butthole neighbors.

I was at the polling place casting my vote one day when a woman wearing a mink coat actually had the gall after listening to my conversation with a friend to ask "You are the one that lives on that island with all the antique cars in the yard? When are you going to get rid of them? They are an eyesore when I drive by there."

She didn't much like my reply when I told her it was none of her bleeping business what I had or didn't have in my yard,and if she hated it THAT much she should offer me enough cash to sell to her and move out. If not willing to do that,she needed to stop driving my my place and looking,and to STFU about it and take her wrinkled old ass back to whatever yankee hellhole she left to move here.

I just have a way with words. Comes naturally.

And truth to tell,it looked to me like her husband enjoyed hearing someone tell the bitch off. Sure looked like he was struggling to hold back a smile.

BTW,I own 13 acres on an island,and am the only house here. No one else can build because of environmental laws and how high the water table is. I am "grandfathered" so there is nothing the county or the state can do about me.

I even have county water and a state-maintained dirt road,thanks to there being a couple of dozen houses here back in the 30's. The one I bought dated back to slavery days and the kitchen was actually separate from the rest of the house,and there was a covered walkway to it.

It was also the only house left standing on the island. I had already replaced it before it burnt down during a marsh fire. It was so rotten you could crumble the corner posts with your hand.

Paid 11 grand for the 13 acres and the house in 1980. Have considerably more in it today,but knew that was going to be necessary when I bought it. Seems like there ain't no such critter as a used house that doesn't need pretty much everything. Sometimes it really is cheaper and more practical to just go ahead and replace the whole damn thing instead of trying to repair everything wrong with it.
You my friend are a savvy, straight-forward guy.  Glad you live the US and support this country now and in the past.

No one on this forum is but envious of the position you have placed yourself in.

From your strategic position, you will see the enemy coming a long way off.

May you live in freedom and peace.
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Offline jmyrlefuller

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What surprises me is the continued resiliency of real estate amounts within the hubs of major cities.

It is strange that more people have not fled to safer, cheaper and more free locales.
That's where the mega-billionaires have put the good jobs. You either try and squeeze into the hyperinflated boomtowns, or struggle to get by in the rest of America.
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Offline sneakypete

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From your strategic position, you will see the enemy coming a long way off.

 

@IsailedawayfromFR

IF I have any enemies,I am unaware of it and them. I do my level best to not bother anyone in "flesh life" that isn't bothering me,and I make it VERY plain to the people that do go out of their way to bother me when we first meet that they need to stop it,and explain to them why they need to stop it.

I will also offer to  help anyone that needs help if I am able to do so,regardless of if I know them or not,and even if I like them or not. If someone needs help,they need help,period.

I take no personal credit for this because it was the way I was raised to be,and the way life HAD to be when I was a career soldier.

Plus,I just think it makes life simpler for everyone involved.
Anyone who isn't paranoid in 2021 just isn't thinking clearly!

Offline sneakypete

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That's where the mega-billionaires have put the good jobs. You either try and squeeze into the hyperinflated boomtowns, or struggle to get by in the rest of America.

@jmyrlefuller

And THERE it is!

I can't personally testify that it is true,but I have heard all my life that people in big cities like NYC often have to pay what would be house payments anywhere else,to share a 1 bedroom,1 bath tiny apt with 3 or 4 other people due to the shortage of room for new housing in the city.

Personally,I would rather earn less and have room to breathe and think in peace.

Which is one reason I will never be rich. Seems to me those people just flat give up too much,just to have money.
Anyone who isn't paranoid in 2021 just isn't thinking clearly!

Offline IsailedawayfromFR

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That's where the mega-billionaires have put the good jobs. You either try and squeeze into the hyperinflated boomtowns, or struggle to get by in the rest of America.
There are different definitions of "Good Jobs".  Mine includes good pay, but it also includes other things that have nothing to do with money.

Urban America is the most expensive to live and work in this country.  And a good proportion of the people who work there choose to live elsewhere in cheaper, less congested places in the suburbs or even rural areas.

I myself worked right outside NYC for years while living in Connecticut in a rural area where I had a septic tank and a water well.
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Offline Fishrrman

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I Sailed wrote:
"I myself worked right outside NYC for years while living in Connecticut in a rural area where I had a septic tank and a water well."

Got to ask (now that you're not there any more)...
Which town?

(one can live in the north ends of Greenwich, Stamford, New Canaan, etc. -- and still have wells/septic)

Offline IsailedawayfromFR

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I Sailed wrote:
"I myself worked right outside NYC for years while living in Connecticut in a rural area where I had a septic tank and a water well."

Got to ask (now that you're not there any more)...
Which town?

(one can live in the north ends of Greenwich, Stamford, New Canaan, etc. -- and still have wells/septic)
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No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington