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      07-30-2020, 08:51 AM   #67
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Because not enough time has passed. People are still in the middle of mortgage forbearance. Upper middle class people have not yet had to dig into savings/investments because they are receiving unemployment money and stimulus checks. This pandemic WILL stretch well into 2021 thanks to the incredibly inept and frankly criminal response from the federal administration. I think that the housing market and a good part of the economy will stop being sustained by falsehoods and that the reality will hit HARD in about 10 months.

Think about all of the small business owners who have gone under already. They also own homes that they soon will not be able to pay for. When the unemployment and stimulus run out, thousands upon thousands will be left homeless and there will probably be a huge glut of homes. I don’t care if the mortgage rates drop to 0, if you have no income, you can’t make the payments.

Save, save, save.
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      07-30-2020, 09:41 AM   #68
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Because not enough time has passed. People are still in the middle of mortgage forbearance. Upper middle class people have not yet had to dig into savings/investments because they are receiving unemployment money and stimulus checks. This pandemic WILL stretch well into 2021 thanks to the incredibly inept and frankly criminal response from the federal administration. I think that the housing market and a good part of the economy will stop being sustained by falsehoods and that the reality will hit HARD in about 10 months.

Think about all of the small business owners who have gone under already. They also own homes that they soon will not be able to pay for. When the unemployment and stimulus run out, thousands upon thousands will be left homeless and there will probably be a huge glut of homes. I don’t care if the mortgage rates drop to 0, if you have no income, you can’t make the payments.

Save, save, save.
Exactly the point I made earlier in this thread and the phrase I used....Irrational Exuberance.
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      07-30-2020, 09:57 AM   #69
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You guys are high, fundamentally there's nothing wrong with the economy as soon as we start opening things back up and we have a vaccine people will return to work and consumer confidence will pick back up.
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      07-30-2020, 10:09 AM   #70
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Nope just realistic. I'm in IT and even though the Nasdaq has been on a tear, I have colleagues at two large companies I had worked for that say otherwise. One is a very large firm that everyone knows. Without getting into details, they had one big benefit taken away from them temporarily which hits people's financial bottom line. In fact people have been looking to leave there in droves. That's if they can do it on their own terms as there has been rumblings of large scale RIFs. The other previous employer forced a 10% pay cut across the board for everyone that was for a couple of months. Things are not so hot over there either. I just found out one of the partners I work with are going through significant work force changes. Two different account reps I work with there are gone. No explanation no nothing. Again all of these are in the IT space which if you look at the Nasdaq, you'd think things are booming.
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      07-30-2020, 11:07 AM   #71
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Originally Posted by BimmerDimmer6 View Post
You guys are high, fundamentally there's nothing wrong with the economy as soon as we start opening things back up and we have a vaccine people will return to work and consumer confidence will pick back up.
This. Key word 'fundamentally'.
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      07-30-2020, 12:23 PM   #72
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I was on my phone earlier and didn't see your location. Yea, we're clearly on different levels here, lol.

You could buy about 6 houses for $1.5M in my area, so I see your point.

Here is an example of what I'm looking for. I'd imagine a comparable house in your area would fetch about 4x this?


https://www.redfin.com/FL/Oviedo/100...m_content=link
Yeah that's $1.5M in Toronto.
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      07-30-2020, 01:31 PM   #73
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You guys are high, fundamentally there's nothing wrong with the economy as soon as we start opening things back up and we have a vaccine people will return to work and consumer confidence will pick back up.
Yep. high as a kite. Doesn’t mean I’m wrong.
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      07-30-2020, 01:32 PM   #74
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Yep. high as a kite. Doesn’t mean I’m wrong.
So jealous lol
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      07-31-2020, 11:00 AM   #75
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I’ve been shopping for a house for a while now. I’ve got enough saved for the down payment and I’ve always thought that in my area, as long as you can ride out a dip the market usually recovers quicker and higher than the rest of the country. Historically that’s been the case. While I think we’re past the top and on the downslope currently, it IS likely that there’s farther to fall, but years of low availability has a lot of people waiting in the wings to still buy so I think we’re getting propped up by that even as inventory increases daily. Prices have only dropped by like 3-5%, no major cuts yet. I’ve got my eye on a couple specific communities though and when prices drop enough I’m jumping in.
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      07-31-2020, 11:22 AM   #76
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I’ve been shopping for a house for a while now. I’ve got enough saved for the down payment and I’ve always thought that in my area, as long as you can ride out a dip the market usually recovers quicker and higher than the rest of the country. Historically that’s been the case. While I think we’re past the top and on the downslope currently, it IS likely that there’s farther to fall, but years of low availability has a lot of people waiting in the wings to still buy so I think we’re getting propped up by that even as inventory increases daily. Prices have only dropped by like 3-5%, no major cuts yet. I’ve got my eye on a couple specific communities though and when prices drop enough I’m jumping in.
Don’t know where you are exactly but I have seen homes in Milpitas, Saratoga, Santa Clara, and San Jose dropping 10-15% in the past year. Even in the last few months homes in Saratoga have gone from $1.8M to $1.6M, just as an example. There should be a bigger drop for sure; at least I’m hoping there will be.
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      07-31-2020, 03:53 PM   #77
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Don’t know where you are exactly but I have seen homes in Milpitas, Saratoga, Santa Clara, and San Jose dropping 10-15% in the past year. Even in the last few months homes in Saratoga have gone from $1.8M to $1.6M, just as an example. There should be a bigger drop for sure; at least I’m hoping there will be.
I bounce around the peninsula but the areas I'm looking at for buying are around Willow Glen, Campbell, Sunnyvale, Rose Garden, West SJ, Los Gatos kinda area.
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      07-31-2020, 04:05 PM   #78
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Don’t know where you are exactly but I have seen homes in Milpitas, Saratoga, Santa Clara, and San Jose dropping 10-15% in the past year. Even in the last few months homes in Saratoga have gone from $1.8M to $1.6M, just as an example. There should be a bigger drop for sure; at least I’m hoping there will be.
Does that really even matter though? Like if you are looking at houses that are over $1.5 million does $1.8 vs $1.6 really matter? If you can't afford $1.8 you might afford $1.6?

In numbers my mind can understand thats like a $300k house vs a $330k house.
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      07-31-2020, 04:18 PM   #79
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Home inventory is still very very low.. people still need to move, and maybe now more than ever. Republican run states are doing fine.
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      07-31-2020, 11:51 PM   #80
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Does that really even matter though? Like if you are looking at houses that are over $1.5 million does $1.8 vs $1.6 really matter? If you can't afford $1.8 you might afford $1.6?

In numbers my mind can understand thats like a $300k house vs a $330k house.
Over the long run, probably not. I was merely saying that prices have started to come down as NorcalAthlete was looking for a bigger drop.
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      08-01-2020, 04:32 AM   #81
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I think most of the people that were effected by this crisis couldn't afford home purchases either way, unfortunately.

I'm sure some prospective home buyers were effected, but not as many as we may have thought.

Like others have said, it's mostly the travel, tourism and leisure industries that were impacted. But those industries don't make up the majority of businesses in the United States.
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      08-01-2020, 08:10 AM   #82
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I think people are going to be in for a rude awakening. Businesses are going to evaluate their work force and see that many of the people they had on the payroll are no longer necessary. Not to mention seeing how they can squeeze more productivity out of fewer staffing. Then there's the impact on physical offices. Twitter has already announced they're going to a 100% remote model now. Going into a physical office is going to be optional. There's going to be a trickle down effect from that decision. A glut of office space as leases expire or get broken. The staffing that would run said office building...property managers, cleaners, trades, etc.

This whole push to go remote has accelerated many business' timelines to move to the cloud. More colo/data center space glut. Decrease in staffing that was needed to run said on prem data center.

If people think this whole economic crisis is only going to affect a small segment of the population, in my opinion, you have your head buried in the sand.
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      08-01-2020, 08:35 AM   #83
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It has affected more lower paid people who aren’t in the home purchasing market so far. How it will affect everyone longer term is TBD. Don’t confuse opinions about what has happened thus far for a prediction of what is to come. No one knows. This thread started as a discussion of why housing hasn’t been impacted, not a prediction of what’s to come.

As far as physical offices, there will definitely be some impact in some industries, but there are also reports that some companies see WFH as less efficient. Some of my clients have already returned to the office and others will too. As such there will be plenty of physical office used and perhaps more space will come back into favor over crammed open workspaces I never liked personally.

Retail is at significant risk, but that has been going on for quite a while. There will be new uses of space. Healthcare will continue to use space and there has already been some talk of converting malls into housing. IT security will be even more important if the workforce is more dispersed. Amazon, Walmart and Target will need even more warehouse and logistics facilities.

There is a worst case scenario - there always is. But we aren’t there yet and chances are we will be in neither a best case nor worst case scenario. Industries and business have died off and been replaced forever.
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      08-01-2020, 08:53 AM   #84
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But some of us doom and gloomers are trying to say is buying a house is a significant anchor in your life and finances...unless you pay cash or have a significant reserve....neither of which are common with the US consumer. With the uncertainty out there, I don't see why anyone would get into a significant financial obligation until things shake out. They're living in a place now so waiting shouldn't be a big deal. This is all reminiscent of the last housing boom.

With office space, I guess you can say it's the same as home real estate....location location. The local news just put out a story that office space in the DC area saw its first significant decline in 10 years as leases go in default or left to expire without a renewal/renegotiation. Met someone recently who works in property management and she said a huge chunk of their customers are needing some sort of payment modifications/forbearance. They're taking whatever they can get out of their customers as it's better to get something versus pushing the customers over the edge into insolvency.
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      08-01-2020, 09:04 AM   #85
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A home is an anchor, even when paid for in cash.

Primary dwelling residential real estate is an illiquid asset with few exceptions. It also requires cash inflow in the form of property taxes and some level of maintenance.

I don’t see the compelling financial argument to invest in a primary dwelling except when children are full time living in the home.
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      08-01-2020, 09:19 AM   #86
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A home is an anchor, even when paid for in cash.

Primary dwelling residential real estate is an illiquid asset with few exceptions. It also requires cash inflow in the form of property taxes and some level of maintenance.

I don’t see the compelling financial argument to invest in a primary dwelling except when children are full time living in the home.
No arguing with you there. I have a bit of a softer tone where I feel having some real estate is prudent in your overall financial portfolio. But I've operated with a different mindset than most. As you point out real estate is not very liquid. And it always takes a significant amount of money to get money out of real estate; agent commissions and interest/closing costs. This is why I have the a 30 year mortgage on both of my homes at a low interest rate with no intention of paying off either early. Instead, I'm diverting any money I would have sunk into paying off the home early into the stock market.
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      08-01-2020, 09:25 AM   #87
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But some of us doom and gloomers are trying to say is buying a house is a significant anchor in your life and finances...unless you pay cash or have a significant reserve....neither of which are common with the US consumer. If the uncertainty out there, I don't see why anyone would get into a significant financial obligation until things shake out. They're living in a place now so waiting shouldn't be a big deal. This is all reminiscent of the last housing boom.

With office space, I guess you can say it's the same as home real estate....location location. The local news just put out a story that office space in the DC area saw its first significant decline in 10 years as leases go in default or left to expire without a renewal/renegotiation. Met someone recently who works in property management and she said a huge chunk of their customers are needing some sort of payment modifications/forbearance. They're taking whatever they can get out of their customers as it's better to get something versus pushing the customers over the edge into insolvency.
I don’t think it’s anything like the last housing boom / bust. I don’t think the market now is flooded with people trying to flip or tons of people borrowing way over their heads and having been through a mortgage process last year, I think underwriting standards are far different today.

If people are renting now, but have enough money to put down and retain some savings, I don’t see the problem with purchasing now within their means. If they lose their jobs they won’t be much worse off owning vs. renting. There is still a housing payment either way. For people who live on the edge with insufficient earnings and savings, well I don’t think they should ever be buying.

For commercial, yes there are tons of tenants looking for rent relief right now, whether they actually need it or not. Those tenants will either recover soon or go away and get replaced by new businesses who also need employees. We are not yet on the edge of an economic Armageddon and while possible, so is recovery after a couple of years of sluggish economy.
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      08-01-2020, 10:00 AM   #88
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I don’t think it’s anything like the last housing boom / bust. I don’t think the market now is flooded with people trying to flip or tons of people borrowing way over their heads and having been through a mortgage process last year, I think underwriting standards are far different today.

If people are renting now, but have enough money to put down and retain some savings, I don’t see the problem with purchasing now within their means. If they lose their jobs they won’t be much worse off owning vs. renting. There is still a housing payment either way. For people who live on the edge with insufficient earnings and savings, well I don’t think they should ever be buying.

For commercial, yes there are tons of tenants looking for rent relief right now, whether they actually need it or not. Those tenants will either recover soon or go away and get replaced by new businesses who also need employees. We are not yet on the edge of an economic Armageddon and while possible, so is recovery after a couple of years of sluggish economy.
While the investment speculation is certainly not a prevalent factor in the current market and underwriting standards have tightened up, I feel there is still some speculation as to I better jump in now before rates go up etc, etc. In my opinion, if you lose your job, it's far easier to recover if you are renting versus if you own a home. When renting, you can easily move to another living arrangement that is cheaper. When you have property you can't expect to flip it overnight. Not to mention the costs associated with selling.

I can say my company is provides a significant boost to the economy. When we have networking/social functions, it's crazy the amount of money we spend at local bars and restaurants. All that is gone till at least January. And then it remains to be seen if the decision will be made for us to start going back into the office and having face to face meetings again. Google has already announced they're remote working till next summer. And no matter where you are with the opening up of schools, you have parents scrambling to figure this out. In two income households, one of the parents will have to stay home thereby shrinking their overall income or they have to find alternate schooling which means paying out of pocket.

Don't get me wrong, I hope we do have a V shaped recovery. But I'm on the pessimistic side of things. With that said, I'm still pumping money into the stock market and doing ok even with the market volatility. Had the same philosophy during the last recession and it's paid off in spades for me.
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