Another Housing Market Crash Looming?

[AvidIndoorsman]

@VikingsGuy agreed... it seems like most of these virus happen on a 600 day cycle, ie. from patient zero to enough herd immunity to render it not a significant threat. To your point there is no way we are shut down for that long right?

Obviously, there will be major economic effects but at the same time I can also see a huge correction if things are allowed to reopen in June.

For instance the food and beverage industry has take a huge hit... but after several months stuck in doors I imagine bars will get a massive influx of people if they were to reopen in the peak of summer. Would this reverse their loses, no, but might it keep them from going under completely?

Obviously that is predicated on an immediate return to business as usual, if it happens slowly...

 

[BigHornRam]

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.

The world is bankrupt right now. Countries, states, and cities. I hope I'm wrong, but a recovery this decade is wishful thinking IMO.

 

[VikingsGuy]

The world is bankrupt right now. Countries, states, and cities. I hope I'm wrong, but a recovery this decade is wishful thinking IMO.

I think you are too pessimistic, but only time will tell.

 

[BigHornRam]

I think you are too pessimistic, but only time will tell.

Well if I could pick only one country to hunker down in for the next decade, I'm already there. So how's that for some optimism?

 

[brymoore]

I think you are too pessimistic, but only time will tell.

I think he’s right on track from what I’m seeing professionally. This will be the worst economic recession this country has seen since the Great Depression. Unemployment is hitting record numbers. The SBA PPP program is going to have every business in the country with 500 or less employees apply for the forgivable loans. $350 Billion will walk in hours to a small amount of companies. Without the funds, another waive of layoffs will occur.

 

[BigHornRam]

@VikingsGuy agreed... it seems like most of these virus happen on a 600 day cycle, ie. from patient zero to enough herd immunity to render it not a significant threat. To your point there is no way we are shut down for that long right?

Obviously, there will be major economic effects but at the same time I can also see a huge correction if things are allowed to reopen in June.

For instance the food and beverage industry has take a huge hit... but after several months stuck in doors I imagine bars will get a massive influx of people if they were to reopen in the peak of summer. Would this reverse their loses, no, but might it keep them from going under completely?

Obviously that is predicated on an immediate return to business as usual, if it happens slowly...

I think this going to effect people's behavior long term. Major sporting events with huge crowds, both professional and collegiate will never be the same. No one is going to want to be stuffed in assholes to elbows anymore. The world is going to change in a big way after this.

 

[ShootsManyBullets]

The last couple recessions were due in large part to bubbles inflated in 1 sector like real estate or tech. This one hit from every sector combined with a 9/11 like event with CV and the lockdown. This will be much worse and much longer than 08/09. We never had 6 million unemployment claims in a month.

 

[Woodrow F Call]

I don't really see this being on par with the great depression. A decade of economic contraction where the economy was half the size at the end? I just don't see that.

 

[AvidIndoorsman]

I think this going to effect people's behavior long term. Major sporting events with huge crowds, both professional and collegiate will never be the same. No one is going to want to be stuffed in assholes to elbows anymore. The world is going to change in a big way after this.

Maybe... but we've had global pandemics before and will again. Humans are naturally gregarious.

Isn't one of the basic tenets of psychology/economics that we are terrible at perceiving a future that is different from our current state of reality. It's why the market goes down even when things are looking better and up even when there are troubling markers... same reason why people have such a hard time accepting climate change... the switch from horses to cars, computers, etc etc etc.

I'm not going to argue that come July things will be back to normal... but by 2028 I bet we are business as usual, see this as a weird fluke, and are confident that we are so much smarter now and that it will never happen again.

 

[VikingsGuy]

I think he’s right on track from what I’m seeing professionally. This will be the worst economic recession this country has seen since the Great Depression. Unemployment is hitting record numbers. The SBA PPP program is going to have every business in the country with 500 or less employees apply for the forgivable loans. $350 Billion will walk in hours to a small amount of companies. Without the funds, another waive of layoffs will occur.

None of us has a crystal ball, but some really smart market folks I work with predicted at the time in both 2002 and 2008 that each would reset a new lower economic normal and we should not expect a return to an equivalent economy. They were obviously wrong both times. In general, the worst economic predictions are usually off - markets and people are more resilient that we expect when mired in the darkest of moments.

 

[Deleted member 20812]

I think this going to effect people's behavior long term. Major sporting events with huge crowds, both professional and collegiate will never be the same. No one is going to want to be stuffed in assholes to elbows anymore. The world is going to change in a big way after this.

If it changes, which it may, it certainly won't be due to any newfound aversion to danger. Humans are remarkably poor at adapting behavior and maintaining that changes due to a threatening condition. It's largely the same reason our government struggles with maintaining readiness for unseen dangers.

 

[BigHornRam]

None of us has a crystal ball, but some really smart market folks I work with predicted at the time in both 2002 and 2008 that each would reset a new lower economic normal and we should not expect a return to an equivalent economy. They were obviously wrong both times. In general, the worst economic predictions are usually off - markets and people are more resilient that we expect when mired in the darkest of moments.

That's because in both those events we put off immediate pain for future pain and were lulled into a false sense of security.

 

[TOGIE]

i don't think we're snapping back from this, nor do i think we're in for the great depression, but i do think we're in for a good dosage of not short lived pain

i'm simple minded, i just look at projected unemployment, think about the vast numbers of restaurants and small businesses that are about go close their doors for good, the amount of retail/restaurant workers furloughed and soon to be laid off, the likelihood of bankrupt american oil this summer, vacation rental owners defaulting on mortgages, landlords missing out on rent/having higher vacancy rates, laid off homeowners that bought homes in the last couple years defaultilng, etc, etc, the list goes on.

all those things will ripple throughout the economy, from marketing to consulting services to construction in my mind. not to mention the airline and hotel industry, think about the tourism economies of many towns

so a simple minded guy like me says this will not be a quick recovery, but again, i'm simple minded and not an economist, so i could very well be wrong

 

[Sawtooth]

And we genXers are once again forgotten, sigh

In a battle to see who is worse, I am good with that.

 

[VikingsGuy]

In a battle to see who is worse, I am good with that.

Some say negative attention is better than no attention at all

 

[Bigjay73]

Had to look up "TLDR".

Thought it stood for Teddy "Long Dong" Roosevelt

 

[ida homer]

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.

Just depends on the area when comparing 09', 10', 11', 12', etc. Varies between markets. But yes, obviously assets in order of liquidity.

Again, no one knows what the hell is gonna happen. These crashes are all different.

 

[Sytes]

Expect the best, prepare for the worst.

 

[ida homer]

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

Between the virus and the ID earthquake, it just re-enforces why we live in the west. Boise is too big as it is,
but you couldn't pay me triple to live near sky scrapers or in areas that dense.

 

[ida homer]

Expect the best, prepare for the worst.

Yep, there's money to be made right now for the prepared!