Another Housing Market Crash Looming?

[BigHornRam]

I heard of people around here walking away from their offers recently. One had $10,000 earnest money on it. Bad time to have to sell a house.

 

[BigHornRam]

As far as housing mortgages triggering a financial event, I've been watching the AirBnB's, many people bought multiple properties with the expectations of entirely renting the property. With no one traveling, they have to make the payments themselves, which I don't believe they'll be able to do. Secondly, over the next couple of months, the unemployment numbers and that impact on making the mortgage payments. We won't know about both of these for a few months.

It's going to be years if not a decade for the tourism industry to recover from this IMO.

 

[Nameless Range]

My job is almost directly tied to the housing market. Right now we still have a lot of work, and folks smarter than I are hiding it well if they are worried. That said, I'm going to use the next couple months to make sure my finances are in order in case we do hit a lull.

We may fair better than most places though. I have a feeling the current state of things aren't going to deter the tech companies and remote workers that have been relocating to Missoula, Boise, Bozeman, etc.

Articles like this certainly help/don't help depending on your perspective-

The Outdoors Are A Way Of Life In This Montana Town. Shelter-In-Place Hasn’t Changed That.

Missoula's prolific and vast open spaces, and the rivers that shape its fly-fishing identity, are getting this city's people through the coronavirus crisis.

www.forbes.com

I think this is true. Even during the last downturn, the devaluing of real-estate happened less in Montana, relative to other places. Though it certainly still happened.

I listened to this Voices Of Montana podcast episode two weeks ago. It was recorded during the first week of this whole thing spinning up. It was a podcast of optimism and satisfaction regarding the state of the timber industry in Montana, and I would be interested to hear the same interview now.

Resurgence in Montana Timber? — Northern Broadcasting System, Inc.

The implementation of Good Neighbor Authority rules could lead to a resurgence in the Montana timber industry. That's good news for the economy and good news for our forests. Taylor Brown guest hosts on Voices of Montana and talks with Bryan Lorengo of the Montana Logging Association, and G ...

northernbroadcasting.com

 

[Woodrow F Call]

It's really unfortunate.

It might help me out though. Starting a new job next week. It's in a business that will probably won't be as affected by this (I really hope so anyways).

That job will require me to move to Denver or Dallas. Been planning on Denver. My current house value was already hit from a flood in 2016, but there is a pretty good petrochem industry around here. Hopefully, I can sell my house next year and buy in Denver. I think whatever I lose on my house, I'll more than make up for on a deal in Denver.

I'd really rather that everyone not have to suffer though. It's going to be a rough ride.

 

[VikingsGuy]

[QUOTE="BigHornRam, post: 2976731, member: 13334"]
It's going to be years if not a decade for the tourism industry to recover from this IMO.
[/QUOTE]

Of course none of us can see the future, but I doubt it - Americans aren't good with self restraint, the minute "semi-normal" returns folks will be making up for cancelled vacations. It's hard for me as a 50-something to buy into, but 20 & 30-somethings have come to view vacations as a life necessity not a luxury item. My daughter and s-i-l have taken more trips in the last five years in their late twenties-early thirties than I had by the time I was 45. Not right or wrong, just different focus.

 

[TOGIE]

I think this is true. Even during the last downturn, the devaluing of real-estate happened less in Montana, relative to other places. Though it certainly still happened.

i think that's true too, and it makes sense

a friend much smarter than me when it comes to real estate once told me "the higher you climb, the harder you fall"

the Denver metro area could be in for a world of hurt

 

[BigHornRam]

[QUOTE="BigHornRam, post: 2976731, member: 13334"]
It's going to be years if not a decade for the tourism industry to recover from this IMO.
[/QUOTE]

Of course none of us can see the future, but I doubt it - Americans aren't good with self restraint, the minute "semi-normal" returns folks will be making up for cancelled vacations. It's hard for me as a 50-something to buy into, but 20 & 30-somethings have come to view vacations as a life necessity not a luxury item. My daughter and s-i-l have taken more trips in the last five years in their late twenties-early thirties than I had by the time I was 45. Not right or wrong, just different focus.

Well those 20 and 30 somethings are in for a rude awakening then.

 

[ShootsManyBullets]

I saw something last night that Airbnb is going to bail out some of it's "Super hosts" which was about 10% of it's hosts. Just a band aid IMO.

In this area over 60% of VRBO/Airbnb income is generated in the summer (really July & August) which is now TOAST with all the closures, layoffs, etc. Luxury items like travel are the last thing most of us are buying if we're laid off. With all the lingering fear even after this ends, travel is going to be slow to recover.

Over-leveraged hosts are going to need to dump. Over-leveraged investors in almost every asset class are in for a world of pain if they don't make adjustments.

 

[Deleted member 28227]

@VikingsGuy and @BigHornRam

"Of course none of us can see the future, but I doubt it - Americans aren't good with self restraint, the minute "semi-normal" returns folks will be making up for cancelled vacations. It's hard for me as a 50-something to buy into, but 20 & 30-somethings have come to view vacations as a life necessity not a luxury item. My daughter and s-i-l have taken more trips in the last five years in their late twenties-early thirties than I had by the time I was 45. Not right or wrong, just different focus."

My wife and I are kinda in that boat... have traveled a ton more by age 30 then our parents had at age 50. Can't speak to your experiences or your kids but this is our reality.

Our parents (all 4) went to college, given how cheap school was for boomers (Adjusted for inflation average cost all in 1976, $2577 - 2010, 20,278) they either didn't have loans or paid them off in a year or two.

Both sets of parents were able to afford homes + cars almost right out of the gate, even with pretty low paying jobs. My parents were teachers and bought a 2000 sqft house at age 27 in a ski town, my wife's worked at a gas station and at the water sanitation district and did the same.

My wife and I have around 8x-10x the amount of student loan debt they had, a 2000 sq ft. house in the same level of area (lets same medium property values) is 2-3x what they got in for (adjusted for inflation). So even though our household income is more than double our parents (adjusted for inflation) there is just no way we can afford the lifestyle they had. (My parents purchased a house in GL Colorado in 1986, for ~$80,000 it's now worth ~$650,000 (zillow) if it hadn't gained value pure inflation would be ~ $188,000 our 1 bedroom apartment cost $125,000)

Therefore we live in a small 1 bedroom, and go on trips. Two trips a year is for us is equal to 1.5 mortgage payments on a house like my parents owned when I was their age or 2 student loan payments.

All I'm suggesting is that from a pure math perspective the reality for millennials is that they can afford experiences much more readily than homes. If a home was economically feasible for me I'd probably trade that for travel.
Like you said @VikingsGuy "not right or wrong, just a different focus".

 

[Woodrow F Call]

[QUOTE="BigHornRam, post: 2976731, member: 13334"]
It's going to be years if not a decade for the tourism industry to recover from this IMO.
[/QUOTE]

Of course none of us can see the future, but I doubt it - Americans aren't good with self restraint, the minute "semi-normal" returns folks will be making up for cancelled vacations. It's hard for me as a 50-something to buy into, but 20 & 30-somethings have come to view vacations as a life necessity not a luxury item. My daughter and s-i-l have taken more trips in the last five years in their late twenties-early thirties than I had by the time I was 45. Not right or wrong, just different focus.

As I have gotten older, I have found that I wasted too much of my life chasing material and not enough chasing experiences. Way more fulfilling. Luckily, early in life me chasing material things led me to work experiences and/or building/making things that were experience, but in hindsight, experiences matter.



That being said, I don't think this will be as bad as the great depression. It is truly unreal what my grandparents went through. A decade of economic contraction. If that is where we are going, hold on brother, this is going to suck. I don't think that is where we will be though. Might be a bad bump, but not that bad. Not close..... I do hope I'm not wrong.

If anyone is interested in a good read or audio book on how bad things were, check out The Worst Hard Time by Timothy Egan. We listened to it on our way to Colorado a couple of years ago. It really influenced our trip. We changed our course and drove through some of those small towns the book talks about.

The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl: Egan, Timothy: 9780618773473: Amazon.com: Books

The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl [Egan, Timothy] on Amazon.com. *FREE* shipping on qualifying offers. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl

www.amazon.com

 

[VikingsGuy]

As I have gotten older, I have found that I wasted too much of my life chasing material and not enough chasing experiences. Way more fulfilling.

I agree with that, and wasn't my intention to suggest otherwise (but that was a fair read of what I typed).

My reference was more on the sense of "life necessities". Even when my dad's small business was doing well things like cable tv, microwave oven, etc was a luxury we passed on - and a family vacation was an old Coleman tent and a two hour drive to a crappy state park or a fishing trip with our old Lund - lots of great memories, no airplane tickets or all inclusive resort packages.

My first apartment got furnished with furniture I grabbed off of curbs in the town's free spring "city will pick up anything and take it to the dump day". I had a blast in that place - no cable tv, no microwave, mattress on the floor, a few forks and spoons take from the university cafeteria. Some of my fondest memories were created in that dump. One generation later and my daughter's first place had either nice quality hand down stuff from my place or brand new Ikea, big screen TV, cable, internet, fully furnished matching new dishes, etc. And her friends all had at least that or nicer. But lots of credit cards used to get that stuff all around. And when my daughter and SIL (and their friends) went house hunting for the first time, the list of "must have" features made my first three houses completely unacceptable options through their lens.

Again, not good or bad - and I am not one to dump on millennials (nor to the opposite do I accept they have it worse than several other generations in recent memory). I just worry that the line between "want" and "need" as been lost to a whole generation. That expensive THINGS have been replace with expensive TRIPS, but with no more emphasis on enjoying the experiences. My friends that are teachers also note they spend too much time helping kids tell the difference between want/need.

But in the end most people figure it out and make their own life with their own priorities - as it should be.

 

[JLS]

I wonder if the 20 and 30 somethings find it ironic as hell some grumpy old folks would worry about how they are spending their money, all while they refuse to have discussion about climate change?

 

[Deleted member 28227]

I wonder if the 20 and 30 somethings find it ironic as hell some grumpy old folks would worry about how they are spending their money, all while they refuse to have discussion about climate change?

Or complain about how health care sucks/ their premiums are too expensive and/or that we have a shortage of Nurses, PAs, MDs, etc but then won't vote for/vote against measures to deal with the culprits of these shortages massive student loans, cap on MD/DO residency slots, etc.

 

[noharleyyet]

via Imgflip Meme Generator

 

[Bigjay73]

Damn millennials, walking around like they rent the place

 

[Deleted member 28227]

@noharleyyet not bashing any generation just people who don't think pragmatically about their decisions... however old they may be.

I think the thing to think about in inter-generation differences is that we aren't different we just make different decision and/ or have adopted different behavior due to different environmental conditions.

 

[Doublecluck]

For Christ sake put down the bong, there is a strong possibility in the next 6-12 months that a 20-30 year old will be able to purchase their first home significantly below current market value with interest rates at historic lows.

 

[Deleted member 28227]

For Christ sake put down the bong

 

[Woodrow F Call]

I agree with that, and wasn't my intention to suggest otherwise (but that was a fair read of what I typed).

My reference was more on the sense of "life necessities". Even when my dad's small business was doing well things like cable tv, microwave oven, etc was a luxury we passed on - and a family vacation was an old Coleman tent and a two hour drive to a crappy state park or a fishing trip with our old Lund - lots of great memories, no airplane tickets or all inclusive resort packages.

My first apartment got furnished with furniture I grabbed off of curbs in the town's free spring "city will pick up anything and take it to the dump day". I had a blast in that place - no cable tv, no microwave, mattress on the floor, a few forks and spoons take from the university cafeteria. Some of my fondest memories were created in that dump. One generation later and my daughter's first place had either nice quality hand down stuff from my place or brand new Ikea, big screen TV, cable, internet, fully furnished matching new dishes, etc. And her friends all had at least that or nicer. But lots of credit cards used to get that stuff all around. And when my daughter and SIL (and their friends) went house hunting for the first time, the list of "must have" features made my first three houses completely unacceptable options through their lens.

Again, not good or bad - and I am not one to dump on millennials (nor to the opposite do I accept they have it worse than several other generations in recent memory). I just worry that the line between "want" and "need" as been lost to a whole generation. That expensive THINGS have been replace with expensive TRIPS, but with no more emphasis on enjoying the experiences. My friends that are teachers also note they spend too much time helping kids tell the difference between want/need.

But in the end most people figure it out and make their own life with their own priorities - as it should be.

We're good. You're post just really made me think about something that has been on my mind for the last few years. My wife and I were talking about it last night because of a video we watched. I was thinking how in the hell did some 20 year olds in the 1970s get this right, I listened to it a million times and only now do I Really get it.

Part of that is me moving out West. Been wanting to for years. Should have done it a long time ago.

 

[Woodrow F Call]

For Christ sake put down the bong, there is a strong possibility in the next 6-12 months that a 20-30 year old will be able to purchase their first home significantly below current market value with interest rates at historic lows.

I laughed to keep from crying.