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Old 02-26-2019, 10:47 PM   #1
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Default New Housing Crisis Possible in 2019

So yeah, I'm a boring finance nerd, but since the world is made of money, it pays to know what is going on. If I feel like creating a TL;DR later I will but for now, please listen up.
I must state, however, that the information I am telling you about is my own opinion and should not be mistaken for legal advice or instruction to make financial decisions. Please consult experts within the field for more information and I claim no responsibility for any losses or legal actions, financial or otherwise that occur relating to my opinions or the information listed.

That being said,

I'm going to talk about GDP and a few economic things which I explain in further detail. Just because you hear something on the news, doesn't mean it will continue in the long run. Most news is short term and instant reactions.

Many economists are viewing the same warning signs they did back in 2007.
https://www.bloomberg.com/news/artic...sion-is-coming

The equation that warns us of this is
rising interest rates + (increase in real estate listings - real estate prices) + rising rental/leasing markets = bust.

If you are waiting to put your house on the market, you might want to hold off. If you need to, I would not wait until the spring/summer because that is when the market gets saturated (overwhelmed) with new listings.

When real estate sales increase alongside the rental market increasing, that means people can no longer afford to pay their mortgages or buy homes without large interest rates.

So far, with the tax write-off cap being held at $10,000 many wealthy homeowners are selling off their access homes on both coasts. Although you may have $32k in write-offs, most have now realized it doesn't mean you can deduct that from your real estate taxes. Recently, the tariffs that have impacted most economies of scale have not provided the job increase as predicted. The US Steel Corporation ($:X on the stock market) was one of the only winners with a 193% increase since 2016 as estimated by Bloomberg. They did not create jobs but instead used it to cover overhead costs (salaries, supplies, and bonuses, sadly.) The other companies could not hedge (manage losses) against the tariff.

Side note:
--Almost immediately the USDA had to buy $4.6 billion worth of livestock and grains from U.S. farmers and supply $1.7 billion in available relief to farmers that could not make their final production estimates just to keep the economy afloat.

Although unemployment has dropped consistently since the all-time high of 10% in 2010, it is now showing signs of a breakout pattern. (A breakout pattern prediction is when ongoing graphs, like a stock price, have narrowed growth or when decreases have ceased to continue over a specific time period.) The Bureau of Labor Statistics shows the subtle increase in the unemployment rate -> https://data.bls.gov/timeseries/LNS14000000


However, the rental and leasing sector has increased a few percent which means rental housing price will increase. This means that the price of rental properties will increase overtime. As seen here-> https://www.bea.gov/news/2019/gross-...d-quarter-2018

Quote:
Real GDP growth slowed to 3.4 percent in the third quarter, from 4.2 percent in the second quarter. Real estate and rental and leasing was the leading contributor to the deceleration in real GDP growth in the third quarter. Real value added for the industry group increased 1.4 percent, after increasing 5.3 percent in the second quarter.
Don't be fooled by that last increase stat, that means it lost a growth of almost 4% from last quarter.

Also the bulk sale and production of electric cars has caused an immense on-site surplus of cars for domestic manufacturers. This has been occurring at a steadfast rate since 2015. After the steel tariff rumors began to spread, they began ramping up production to ward off any future complications that could have arose, like they did. However, for the third quarter Real GDP (the measure of including inflation/deflation into the actual GDP (the final financial product of all goods/service of the country)) has shown that real estate and car sales have slowed the economy down by 0.8%.


With rising inflation of the U.S. Economy and devaluation of the Euro, we have increased wholesale exports to European countries, especially the United Kingdom, to help control leverage after the Brexit deal becomes a reality. (That is why Trump keeps saying the economy is better than ever.)
China began to buy our crops again in 2019 due to our investigation of unfair trade practices and other countries estimates for crops being delayed.


Crazy times are upon us, watch what you do in the next coming months.
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Old 02-26-2019, 11:17 PM   #2
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I am just glad I don't own anything in this state. Other states are worth the BS, here it's not. I am liquidating all of my assets this year and preparing to bail when the opportunity presents itself. Also hoping my landlord doesn't increase my rent.
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Old 02-27-2019, 07:10 AM   #3
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@sickmint79 where ya at dog
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Old 02-27-2019, 08:18 AM   #4
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Fortunately we just bought our house not that long ago, and we don't plan on moving until we get closer to retirement age.
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Old 02-27-2019, 08:27 AM   #5
 
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Yep trump hiding tax returns and shielding the fact he "probably" hasn't paid federal income tax for decades then turning around and putting that 10k limit on property tax deductions is a fucking joke.
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Old 02-27-2019, 08:31 AM   #6
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Fortunately we just bought our house not that long ago, and we don't plan on moving until we get closer to retirement age.
Same even though I'm taking a new job further from home.
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Old 02-27-2019, 08:31 AM   #7
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Many economists are viewing the same warning signs they did back in 2007.

even the layman like myself could clearly see the problem had all but the crying left by 2007, the good (and few) economists that saw problems were calling them out in 2005 and earlier. and they were much more significant than anything would be now. i don't think there is anything we need to get particularly excited about really beyond normal market gyrations. hoping to sell my house in the next few months also.
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Old 02-27-2019, 08:33 AM   #8
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I need to do some research on outstanding CDO debt relative to mortgage debt. That's really what turned what would have been a recession, in to a global disaster. We're due for a correction, but I wouldn't necessarily call a correction a "crisis"

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Old 02-27-2019, 08:38 AM   #9
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Quote:
Originally Posted by blakbearddelite View Post
Fortunately we just bought our house not that long ago, and we don't plan on moving until we get closer to retirement age.
Yup. I don't plan on moving for another 28 years.... Well plan on at least.
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Old 02-27-2019, 11:14 AM   #10
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Interesting. We have been on the fence with putting house up for sale and starting over but affordable new construction is cheap and blah. It almost makes us want to stay in our house. I donít know if I have the energy to house shop and compete with bidders right now since I am working a lot of hours.
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Old 02-27-2019, 11:20 AM   #11
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I understand the people that plan on staying in their houses not worried about the market dropping, but what about when you're fed up with paying out the ass for taxes and you DO want to leave?
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Old 02-27-2019, 11:22 AM   #12
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rent your shit out.


i know quite a few people that did that after 07/08 crash and they were super underwater.

few years of renting it out, got above water a good amount, made some money... whatever.


or just walk away from it
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Old 02-27-2019, 11:27 AM   #13
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I see a lot of things being rented in the future, not a large amount of people to commit to a mortgage unless they're married and/or have a family. I just hope rent prices don't sky rocket, then I'll have to buy again like I did in 2012 Rent was high buying was low.
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