Economic pain train's a coming (Littleton, Warren: real estate, foreclosures, rental)

[audemars]

Interesting article in The Globe yesterday pointing out that while Mass has suffered little more than glancing blows from the last few recessions, this one affecting higher ed (college kids may not return this fall), medicine (most profitable elective procedures are on hold), sports, tourism and biotech (many trials also now on hold) will hit more directly. Will be interesting to see how this affects real estate given all the leverage out there. As Warren Buffett once said, it's only when the tide goes out that you see who's been swimming naked.

https://www.bostonglobe.com/2020/04/...d_ContentQuery

[Urban Peasant]

The collapse of the dot.com industry at the turn of the century greatly impacted Massachusetts and it took a longer time to recover from the early 2000's recession. It was not a fun time looking for a job as I remember long lines snaking around the corner at job fairs and if you did land an interview, you'd get a depressing "we have over 200 applicants that applied to this job but we will be in touch for a second round interview if we feel you are the right fit". Any time the tech industry or anything related to it takes a hit, Massachusetts is going to feel the pain. I sense we're going to see a similar correction in the near future .

[audemars]

Agreed. You're also going to see financial services hit as there are fewer actively managed assets under management to collect fees on, and many of those are hiding out in money market accounts. Banks may be profiting off the volatility in markets now, but that'll be more than offset by losses from defaults in cards, autos and homes down the road.

Specific to real estate here in metrowest, we've seen so many people stretch the last few years to buy, and many of those are dual-income households that'll be in a tough spot if one is lost.

With so many professions around here experiencing layoffs or pay cuts (even doctors), it's hard to see how this won't be painful when the moratorium on foreclosures is lifted and mortgages are once again due.

[brightdoglover]

I have hoped that the real estate frenzy will ease. The rents are insane, the purchase prices are insane. A financial disaster can only ease that.

Where I live, I had to lower the rent on my very small rental house to cost only, and my tenants still couldn't make it. Have to carry them. A local foundation did put some money my way towards the missing rent, and I'm grateful. Do not like to see the real estate frenzy anywhere, as it hurts people so much. Yes, I know, if people bought high they are going to be clobbered. It happens. I used to own a house in Littleton, and certainly would have been in trouble if I lost my job then. But my job was/is essential and very risky exposure, so I likely would have had to work and not have financial problems but worry about health and life. So I'm not unsympathetic, especially having been a single income. But the real estate wars that make it so hard for people to live decently or not work like a crazed raccoon, I could stand to see that ease wherever it happens.

[Bridge781]

I think we will feel this one for a while. It is totally affecting universities and many of the tech places around here feed off if the universities. It really effects so much.

[trevor0101]

Very difficult to say what will happen. There are a ton of factors. One thing to keep in mind is that fundamentally there is a huge amount of idle cash that still has a ton of value out there. People will look to get returns on it. This isn't a matter of a populace that is poor, and destitute.

[brightdoglover]

Originally Posted by trevor0101

Very difficult to say what will happen. There are a ton of factors. One thing to keep in mind is that fundamentally there is a huge amount of idle cash that still has a ton of value out there. People will look to get returns on it. This isn't a matter of a populace that is poor, and destitute.

Could you explain a bit further for this fuzzy mind? Where is this idle cash, and in whose hands?

[Bridge781]

Originally Posted by brightdoglover

Could you explain a bit further for this fuzzy mind? Where is this idle cash, and in whose hands?

Right?

[porterhouse]

Originally Posted by brightdoglover

Where is this idle cash, and in whose hands?

Investors, Individual Households, Corporations, Hedge Funds...

[brightdoglover]

Originally Posted by porterhouse

Investors, Individual Households, Corporations, Hedge Funds...

Do you mean the money from the first stimulus/relief bill?

As far as individual households, I think it went for ordinary bills/credit card payments/rent/food. I don't think $1200 is burning a hole in too many individual pockets. Certainly not where I live, with all the hospitality and tourist and small business (very small business) and self-employed people on the rocks.