YouBet said:

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I have cash to invest and am holding everywhere else because its simply too late to react, but damn if I didn't wish I had gone cash to some degree in retirement accounts.

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AggieDruggist89 said:

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YouBet said:

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I have cash to invest and am holding everywhere else because its simply too late to react, but damn if I didn't wish I had gone cash to some degree in retirement accounts.

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I follow the rule of watch the masses and go the opposite way.

When I posted this last October, the market was on a bull run for 20 months and the DOW as at all time high nearing 36,000. Real Estate was going crazy. But, it just didn't feel right. Felt like a bubble. But of course most everyone would say "it's different this time."

Well....

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Fightin2010 said:

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I am loading up on DRV (Inverse leveraged real estate ETF). I literally don't see any possible way real estate goes UP at this point. Best hope is flat but even that seems unlikely at 6.5% mortgage rates. Someone convince me I'm wrong. Once layoffs start to really happen I think the real estate market is doomed. Americans have left no room for anything but a perfect environment.... meaning they're maxed out on their $750k house payment at 3% interest much less the same house at 6.5% intetest (an extra $1000+ per month).

Edit: to clarify that last part

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Ag CPA said:

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If you go back to Q4/Q1 there is so much fail on this board; people making fun of those getting into cash, paying off a mortgage instead of putting the money into the market and earning that guaranteed 15% return, or being worried about a recession...

I realize that hindsight is 20/20 but there are some entertaining threads out there.

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Ag CPA said:

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If you go back to Q4/Q1 there is so much fail on this board; people making fun of those getting into cash, paying off a mortgage instead of putting the money into the market and earning that guaranteed 15% return, or being worried about a recession...

I realize that hindsight is 20/20 but there are some entertaining threads out there.

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Fightin2010 said:

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I am not sure, but I am monitoring it very closely. Hopped in to it in the 40s and its around 61 now. I realize there is a lot of risk in inverse ETF's and gains can all disappear quickly.

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AggieMainland said:

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If someone was hypothetically 100% in cash in their 401k, with a VERY long time horizon, how would you recommend they get back into the market? (Obviously no right answers. Just curious.)

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FrioAg 00 said:

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Malibu2 said:

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Imagine an economy with $1 and 1 stock share worth $1. If I fire up the printing press and add a second dollar, my share price is now worth $2. It doesn't mean the company is doing better, it just means the price has to now reflect the inflated currency.

This is why in an inflationary environment waiting for a crash is probably a bad plan.

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The purchasing power of cash is down 6.45% since this post.

The S&P is down 20.1%

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Fightin2010 said:

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I think the average Joe that bought the last few years is way out of his league. I have been looking in Dallas becuase my wife wants to get back near her family( and we even came in to some money recently), and I just can't justify the monthly payment because prices haven't adjusted while interest rates have doubled. This thing will likely crater not from those that want to sell to make a buck but from those that are forced to sell due to layoffs etc. Also imagine the risk some of these investors have taken on and if their tenants quit making rent becuase their wages didn't keep up or they got laid off. Imagine if that happens times ten. Having said all that, I am not sure if there will be a sharp correction but this is all we need to know about if real estate will continue to skyrocket. It at least needs a decent correction and could be a huge one if all these investors get under water.

This is not oil, a meme stock or even a shitcoin. It’s the average monthly mortgage payment in America up 50% pic.twitter.com/KstQHgjXBw

— Genevieve Roch-Decter, CFA (@GRDecter) June 16, 2022

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hph6203 said:

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It's saying newly originated 30 year mortgages on median priced homes has skyrocketed over the last year. Water is wet. That's why you're going to see transactions slow down (they have) and home values decrease (if they don't you're going to see, at minimum, a flattening of the appreciation).

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harge57 said:

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FrioAg 00 said:

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Malibu2 said:

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Imagine an economy with $1 and 1 stock share worth $1. If I fire up the printing press and add a second dollar, my share price is now worth $2. It doesn't mean the company is doing better, it just means the price has to now reflect the inflated currency.

This is why in an inflationary environment waiting for a crash is probably a bad plan.

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The purchasing power of cash is down 6.45% since this post.

The S&P is down 20.1%

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Is that according to the manipulated CPI?

I'd bet purchasing power is really down closer to 20% than 6%.

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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Scientific said:

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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I've wondered about this before. How did we get so low on invesntory to begin with if leading up to 08, nationally the oversupply of construction was evident. Then the crash happened, and a wave of additional supply was unloaded. Since TX wasn't exposed like other places it skews our perception a bit. We got back into a seller's market rather quickly.

Can't predict the future, but I don't see how home construction can ever keep up pace. Even if we see a slow down, builders haven't been able to manage these higher costs. Seeing them price their homes every 3 months these last 2 years was insane.

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Fightin2010 said:

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I am loading up on DRV (Inverse leveraged real estate ETF). I literally don't see any possible way real estate goes UP at this point. Best hope is flat but even that seems unlikely at 6.5% mortgage rates. Someone convince me I'm wrong. Once layoffs start to really happen I think the real estate market is doomed. Americans have left no room for anything but a perfect environment.... meaning they're maxed out on their $750k house payment at 3% interest much less the same house at 6.5% intetest (an extra $1000+ per month).

Edit: to clarify that last part

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Bonfire1996 said:

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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From 2007-2017 I was in homebuilding supply. Coming out of the crash, this chart was my lifeblood.

Did you know: it takes 1.5 million units of housing built annually just to make demand equilibrium. Tear downs, urban sprawl, immigration, education growth, age growth, wealth creation, printed money all factor into an equilibrium of 1.5 million units needing to be built annually.

So you nailed it with your question. How do we catch up to demand with that lost decade from 2010-2020? The answer is with supply. That's the only answer. It's why I answered on page 1 that the only areas who will experience a real estate correction are politically blue areas where people will flee.

In Texas, you won't have price corrections. You may have price stagnation, but when rates return to historical lows in 2023-2024, say hello to California housing prices and a metric shlt ton of Multifamily construction.

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YouBet said:

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Bonfire1996 said:

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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From 2007-2017 I was in homebuilding supply. Coming out of the crash, this chart was my lifeblood.

Did you know: it takes 1.5 million units of housing built annually just to make demand equilibrium. Tear downs, urban sprawl, immigration, education growth, age growth, wealth creation, printed money all factor into an equilibrium of 1.5 million units needing to be built annually.

So you nailed it with your question. How do we catch up to demand with that lost decade from 2010-2020? The answer is with supply. That's the only answer. It's why I answered on page 1 that the only areas who will experience a real estate correction are politically blue areas where people will flee.

In Texas, you won't have price corrections. You may have price stagnation, but when rates return to historical lows in 2023-2024, say hello to California housing prices and a metric shlt ton of Multifamily construction.

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Do you think blue areas within Texas (Austin, Dallas, Houston, San Antonio, El Paso) are outliers to this though? Honest question.

Austin is already falling from its peak based on other articles I've read but they were also an extreme outlier, nationally. Dallas seems to still be a hot market although we are seeing homes around us cutting prices. I would argue they put first prices out there that were simply stupid but they are still selling very highly. I'm talking about homes in the $750K+ though.

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