Is there another US housing crash coming soon?
 

Fact: much of the early to mid-term rise in US property markets was due to foreign (read: Chinese) investors

Fact: China's economy is slowing and China's government is cracking down on capital flight

This is the result

Do see the US housing market crashing soon?

lets look at this as objectively as possible...last time they crashed the market the US gov gave them more money and they paid themselves bonuses on top of the bonuses...nobody went to jail...I would say that it is safe to say: yes! there is another housing crash coming up :2 cents:

I live in a high home price area and areas like mine are the canaries in the coalmine.

We've hit 7 year lows with a 19% crash

Home sales slump: Newport Beach, Laguna Beach and Costa Mesa purchases dip 19%

I really believe the banks were the cause of the housing crash. They discovered that the more they loosened up the credit qualifications the more houses they sold, and the more houses they sold the more money they made. This decreased the amount of available homes yet made them affordable to more people... More people could buy houses and the supply was quickly being sold.

At some point the banks couldn't lose.... If they sold a house to someone who couldn't afford it, they kicked them out, jacked up the price, and sold the house to the next person for more money.

Good point. First to rise, first to crash.

You somewhat understand...


Yes to Op. I live in one of the hottest RE markets in the country right now.. The problem is they are only building shit that costs a half a million + because they are buying perfectly fine houses for too much, tearing them down and then building 2,3,4 expensive shotgun homes on the lots to make a profit... The signs of a downturn are just 2 blocks down from me.. 8 high-end town homes with view of lake inlet sitting unsold for 6+ months.. I know the builder personally. He spent most of his money building them and then took on another $3.6 million dropping 20% down for a land contract on some commercial nearby.. He hoped to sell the townhomes to complete that deal by this month.. Townhomes haven't sold.. He's nearing foreclosure on those and is already in legal battle on the commercial.. He will be one of the first casualties locally. Many more to come..

Here's your answer

I bet on a crash ...

One of the reason I am listing my property in Florida when I go down there mid-feb ...

Looking at buying in Montericco , Guatemala

I can't comment on the USA, however in Australia the property markets have softened in most cities. It's unlikely this will lead to a crash.

Wow. Your friend's predicament is painful to read. I've found myself in the same position.

the housing market in US is already cooling down since february 2018.
but this time it is not a consequence of shit papers - it is a consequence of a unnaturally pumped up economy in a time when no pump up was necessary.

pumping up a market is always done with loans. that consumers takes this loans a low interest rate is required.

when this loans are spend, the economy will increase because of a higher demand on goods and a higher demand will lead to a higher production and more jobs.

sounds easy but the in the nature of this strategy a part of the following increase have to be used to pay those loans back.

if this is not the case, people have to loan more to keep up their life standard and with every new loan a part of the reached prosperity is going to pay back and pay interest.


a simple example would be that someone who makes 100 k per year get another 100 k loan every year with a 2% interest.

even when this guy have now 200 k in his hand his original income decreased from 100 k to 98 k because of the interest.

but he also have to pay back the loan with, let´s say 20.000. that means: after he spend this 100 k loan his buying power is decreasing from 100 to 78 k.

to get even back to the standard before the loand he have to loan 22 k and pays back only 20 k.

after doing this 20 year or so - the same person with an income of 100 k will have loans of 500 k what reduces his personal income to 90 k. he is overloaded with loans and will soon be unable to increase the loans when his personal limit is reached.

in such a situation the economy will decrease because the personal spendings of this guy
will not be the same as before because his budget is already 10% down to before because of the interest.
as soon as the economy suffers he might lose his job. but even if not the market will become worse for investors. they are usually the ones who give their money to banks
and banks give the loans. as soon as this investor wants his money back the banks can´t give more loans and the crisis is here.

if you look deeply in the numbers of the reagonomics of trump, you will find out that the rise of the debt is 120% from the rise of the economy.
with other words: only 83,33 % of this money flew back into the economy and 17,66% of this lend money disappeared. but on longer term the prosperity of our 100 k guy is lower than before.

now replace this 100 k guy with the US government and you see the problem.

trump pushed money in the economy when it was time to pay back.
and that again means that there is no fast solution to get out of the next crisis because
in the last one it was possible to lower interest from 8 % to zero. now this lever effect is only 2,5 to zero (and if the FED would do what trump wants even less).

on top of that trump has weakened the power and economy of the biggest US foreign creditor. so he has diligently sawn off the branch of the tree on which the american economy sits.

so if you ask if the will be a crisis: yes - and not only housing.
car industry is already affected more than the housing market. and if you search a bit around here this is what i was predicting already 6 month after trump went to oval office.

the rules of economy are fixed rules. nobody can break them and who thinks he can is a dumb.

I hope so.. I made a lot of money off the last one.. with all the dirt cheap foreclosures everywhere.
I now own 2 rental properties because of the last housing crash... and a tiny beach side condo in the Bahamas rented out to vacationers.

1,600 sq foot Condo foreclosures were selling for $60,000.. when they would usually be selling for $200k or more.

yes, save a much cash as you can ., dont invest in stoick , real estate., for now.,

recession is near.

Your post reflects the current consumer sentiment in the US. It's definitely trending DOWN. I would be surprised if there was NO RECESSION within a year of this thread. It can still turn around though... The first place to look is the US FED's interest rate policy for the coming year.

well, fingers crossed.

good luck to everyone., i still remember 2009 recession.

the fed already said that they might not rise interest as expected.

what means: there is no need

if there is no need the inflation rate is lower

when inflation rate is decreasing it means that the difference between supply and demand is getting smaller. as soon as demand is lower than supply we talk about a deflation what is the worst that can happen because next steps that are following are depression and recession.

I wish the Chinese also left Vancouver :2 cents:

:1orglaugh:1orglaugh