Another Housing Market Crash Looming?

[Hunt West]

The value they place on the most precious commodity of time seems to be far advanced from what my grasp of that concept was at their age. If I asked any of them the choice between a $5K bonus or a month off work, they would be logging off their computer and headed to their next adventure without blinking an eye.

If that time was anywhere between September and November I’d be out that door so fast your head would spin. Any other time I may think about it for 5 secs before walking out.

 

[ida homer]

From one of the appraisals I did today. Still insane in Boise, this is for a 3/2 1300sf tract home. Not one of the 55 sales
sold a penny below its asking price.

Another month and we'll be able to see a little about about how it's affected the sales in March. Keeping a close eye on those.
I'm expecting it to collapse within 3 months, but holding up for now. Who the hell knows what's gonna happen.

 

[Lawnboy]

In our Area we are going to see a hiccup in the housing market. There are nervous buyers and some are backing out of contracts as we speak but we are also seeing an influx of people from out of state because they’re realizing less rats means more cheese. I think when this whole virus passes the housing market in Montana will be booming because people don’t want to deal with what they just went through in larger cities. IMO

 

[Wildabeest]

Amen on the Pastor Bigfin sermon! Well said Randy.

 

[Sytes]

To Randy's example of his employees, I believe that sample is jaded as hell! I'd imagine Randy's pretty darn selective in his staffing selection and has candidates banging on his door fitting the exact model he described.

 

[Woodrow F Call]

Good point.

All eight of my employees are in their 20s and 30s. They are all hard working, frugal, and savers. They all paid their way through college or worked jobs while the parents helped. They saved up for down payments on houses or they make the conscious decision to rent and not incur the additional overhead of taxes, insurance, or maintenance tasks that imposes on their time. They mostly drive old beater rigs, buy used stuff, and laugh at how the 50+ year-old generation blows their money on material things, as generalized as that last statement is.

The value they place on the most precious commodity of time seems to be far advanced from what my grasp of that concept was at their age. If I asked any of them the choice between a $5K bonus or a month off work, they would be logging off their computer and headed to their next adventure without blinking an eye.

Yet, I know a ton of people my age who are on the great American treadmill hoping for just one more stock market run so they can pay off their second mortgage that was used to buy a European vacation and new SUV, vehicle four in the garage. And to avoid generalization by single example, I know many my age who got off the treadmill in their 40's and gave the middle finger to the the great American idea of "More is better. Just give your employer more of your time."

The generalizations of either group are just that, generalizations. I see my age groups does more critiquing of the younger generations than the other way around, which could be a function of my peer group. I get why young folks came up with the "Boomer" memes and responses.

As a CPA that gets to see just how much debt a lot of 50+ year olds are dragging around and how poorly prepared they are for their later years, I don't see that level of debt in younger people I know. Maybe younger folks have surprisingly healthy balance sheets compared to a lot of 50+ folks, as they haven't been around long enough to acquire the same level of debt.

I did have a December conversation that was a bit sticky when a 63 year-old started railing on millennials, socialism, lazy asses, Bernie, AOC, etc. You know, the topics with trendy memes on FB these days. About two sentences later he talked about how his health care costs will go waaaay down when he can get on Medicare in less than two years. I smiled and quipped, "That socialism shit is a bitch, isn't it." He knew full well what I was saying and laughed along with me. I picked up the tab for breakfast.

Point of reciting that encounter is that when we generalize these topics, we can find many examples that support our position. And, sometimes we accept the pedaled narrative without much examination of our own habits and tendencies, however hypocritical (myself included).

The 20-39 folks I talk to are fully aware that when they entered the workforce, the 50+ folks and generations of single-issue voting tendencies have resulted in fiscal irresponsibility that has each of these youngsters saddled with over $70K of US debt that was spent before these young folks were even old enough to vote. And if you add other future promises not on the books that the 50+ crowd has made to themselves in the way of future benefits, it is triple that amount per millennial. They accept that huge US debt as part of their situation in life. If they whine about it, they do that whining where I don't hear it.

Given their frugality, as has been my anecdotal observation, and comparing it to the lack of financial responsibility (individually and collectively) that I have seen in many of my 50+ peers, along with how much debt we have saddled them with by making future promises to our collective selves, I'm not inclined to comment on the spending habits of younger people. I do admire the priority they (the ones I know) place on time and freedom.

Not sure what this diversion about generational behaviors has to do with a housing crisis. Carry on ........

I especially like the part about giving your time to you're employer. I'm making a big change in my life right now. It's bad timing, but it can't be helped. I've put in a lot of extra time working on turbines, doing overhauls, and inspections. I work for a good company (who is the end user of the turbines), but I spend a lot of time here. Some of that is my fault, as I like to own my equipment. Anyways, that's really how I felt the last few years (I'm giving way too much time to my employer).

My new job, I'll be doing the same kind of work, but for a manufacturer of that services the equipment. I'll work long hours in chunks of time, I'll be on the road, but I'll be paid for every hour I work and I'll have large chunks of time off (two months at a time!). Plus, when I get to retirement, I should be able to pick up a couple of projects a year and make all the money I'll need for insurance or buying a new truck or something if needed. Finally, they are moving me out west to Colorado. I'm pretty excited.

 

[Deleted member 28227]

To Randy's example of his employees, I believe that sample is jaded as hell! I'd imagine Randy's pretty darn selective in his staffing selection and has candidates banging on his door fitting the exact model he described.

Right... but like if you are a boomer and you making judgments about millennials why don't you look at your employees who have made the same life choices you have, as opposed to AOC, ie if you are a Montana boomer who hunts look at Montana millennials not some NYC millennial. This goes both ways... I look at a lot of my family friends, coworkers, folks on here from other generations and I see a ton of similarities in their goals and mine.

TLDR

Boomer saying all Millennials are AOC = Millennials saying all boomers are Nancy Pelosi

 

[VikingsGuy]

Boomer saying all Millennials are AOC = Millennials saying all boomers are Nancy Pelosi

And we genXers are once again forgotten, sigh

 

[Sytes]

And we genXers are once again forgotten, sigh

GenX <--- 48. The days of paddles used in school turned to, trophy's for doing what you're supposed to do...

 

[Deleted member 28227]

And we genXers are once again forgotten, sigh

yeah.... I mean...

 

[Sytes]

Right... but --->

TLDR

Had to look up "TLDR".

 

[VikingsGuy]

yeah.... I mean...

View attachment 134249

funny - not sure about the GenX connection, but funny none the less.

 

[SAJ-99]

From one of the appraisals I did today. Still insane in Boise, this is for a 3/2 1300sf tract home. Not one of the 55 sales
sold a penny below its asking price.

Another month and we'll be able to see a little about about how it's affected the sales in March. Keeping a close eye on those.
I'm expecting it to collapse within 3 months, but holding up for now. Who the hell knows what's gonna happen.

View attachment 134199

Fun fact of the day, housing market prices from the last boom/bubble bottomed in 2012. RE prices are sticky because it is very illiquid. If people need cash, they sell stocks/bonds first. Lots of behavioral biases come into play, particularly anchoring on what you bought it for or even what the neighbor sold his for 3 months ago.

 

[Deleted member 28227]

funny - not sure about the GenX connection, but funny none the less.

Mike lee is your team... pretty cool you guys finally learned how to use photoshop... not sure if you mastered when

 

[BigHornRam]

To get back on topic......This "economic downturn" is going to challenge everyone's financial preparedness across all age classes. It's going to be brutal to put it mildly. I wish everyone here the best for what is coming.

 

[Deleted member 28227]

Fun fact of the day, housing market prices from the last boom/bubble bottomed in 2012. RE prices are sticky because it is very illiquid. If people need cash, they sell stocks/bonds first. Lots of behavioral biases come into play, particularly anchoring on what you bought it for or even what the neighbor sold his for 3 months ago.

Do you think a crash will happen faster due to how fast this crash happened relative to '08 or do you think the market will snap back?

I'm wondering if some of what is going on are just "paper loses" and if we will snap back? Is that totally naive?

 

[Nameless Range]

Something I have always thought was kind of unfounded is the premise that the concept of "generations" are particularly meaningful. Any proclamation distinguishing boundaries based on year beyond the baby boomers is largely arbitrary.

The first chart is chart of birth rates while the second is raw numbers.





Look at where the boundaries are drawn for those generations. Sure, there are sort of crests and waves in the raw numbers, but not particularly big ones. When it comes to rates they barely exist.

I guess what I am saying is the concept of "generations" as an identity or characteristic of individuals, is overrated and not particularly useful.

Sorry to deviate from the OP.

 

[BigHornRam]

Do you think a crash will happen faster due to how fast this crash happened relative to '08 or do you think the market will snap back?

I'm wondering if some of what is going on are just "paper loses" and if we will snap back? Is that totally naive?

Naive. This is going to be a world game changer.

 

[Sytes]

Retirement fund participants should take that to heart.
Retirement $ is about minimizing loss and maximizing gains... Not waiting to recover significant loss.

 

[VikingsGuy]

Naive. This is going to be a world game changer.

I think it depends on how quickly we decide we can restart the economy. If we decide to open up after the mid-May expected peak then maybe more of a blip. If we stay locked down through June and re-lock in the fall for 6 months then we are definitely going to face a "Great Depression" like moment. The economy simply can not be "bailed out" for the 18 months a vaccine will take.

The virus isn't going away (except for maybe a seasonal summer dip). The answer from my view is when are the hospitals better prepared for this and we have enough tests - both for active infections, and past infection immunity (two different kinds of tests) - so that we can move to more targeted isolation/tracing while allowing the majority to go back to life as "usual" accepting some will have a nasty cold, but on the upside working towards the 70% or so infected need for herd immunity.