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Old 08-10-2017, 08:28 AM
 
9,824 posts, read 11,229,487 times
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Quote:
Originally Posted by jmw51882 View Post
If people who had a foreclosure or short sale during the crash have behaved since then, they will continue to come back into the market for the next couple years as these black marks time out on their credit reports, and they become eligible for another mortgage. Therefore, I anticipate we will see large appreciation until at least 2019, 7 years post the bottom and smaller gains until 2022, 10 years for those that had to file for bankruptcy.
You bring up an interesting point. They are called "boomerang buyers". Statistically, history has shown they are gun shy to re-enter the market Boomerang Buyers Making a Gradual Return . Over 1/2 don't re-buy for >15 years (CoreLogic is a think tank on RE and is a great source on foreclosures etc). Personally, I've met several short-sale sellers who's credit has healed, yet they refuse to re-buy. Plus the newer generation is more mobile and prefers to rent https://www.rentpath.com/millennial-...enting-buying/ . On a personal note, I have a dentist daughter and a son who will be a doctor. Neither have the urge to buy... yet. I had my 1st home at age 21 (I never rented). So there is a different mindset these days.
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Old 08-10-2017, 11:56 AM
 
Location: Sonoran Desert
39,117 posts, read 51,366,781 times
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I would be concerned about a recession late this year into next. It could come a soon as September on a deficit default, or come from a return to reality in the stock market, or North Korea, trade "wars", or simply cyclical factors that point to such a likelihood. There are many more downside perils than upside potentials in the next couple years. It won't be deep but it will cap and take a few percent off home values.
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Old 08-11-2017, 09:42 PM
 
4,222 posts, read 3,754,213 times
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Quote:
Originally Posted by Ponderosa View Post
I would be concerned about a recession late this year into next. It could come a soon as September on a deficit default, or come from a return to reality in the stock market, or North Korea, trade "wars", or simply cyclical factors that point to such a likelihood. There are many more downside perils than upside potentials in the next couple years. It won't be deep but it will cap and take a few percent off home values.
Cycles aren't all bad, they create a lot of opportunity too.
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Old 08-11-2017, 10:39 PM
 
2,807 posts, read 3,189,757 times
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I find talk about recession far-fetched. We need something like a combo of CPI >3%, UE 4.0% or less and 2 / 10 Treasuries year spread 0.5% or less for a recession to hit within one year. Last I checked NEITHER of the three prerequisites is fulfilled. To put it short and blunt: there will never be a recession with crude oil prices at $50. Not in a million years. Therefore, I find any prediction of falling RE prices in Phoenix not realistic.
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Old 08-12-2017, 08:05 AM
 
2,560 posts, read 2,308,978 times
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Quote:
Originally Posted by Potential_Landlord View Post
I find talk about recession far-fetched. We need something like a combo of CPI >3%, UE 4.0% or less and 2 / 10 Treasuries year spread 0.5% or less for a recession to hit within one year. Last I checked NEITHER of the three prerequisites is fulfilled. To put it short and blunt: there will never be a recession with crude oil prices at $50. Not in a million years. Therefore, I find any prediction of falling RE prices in Phoenix not realistic.
Just love those NEVER statements. Like back in 2006 when almost EVERYONE was saying that real estate could NEVER decline 50% and the stock market decline would NEVER decline nearly 60'% (high 1500s in SPX to a low of 666).

NEVER.

(Again, not saying it will happen, but love those NEVER statements.)
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Old 08-12-2017, 08:24 AM
 
Location: Rural Michigan
6,341 posts, read 14,723,970 times
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Quote:
Originally Posted by Burkmere View Post
Just love those NEVER statements. Like back in 2006 when almost EVERYONE was saying that real estate could NEVER decline 50% and the stock market decline would NEVER decline nearly 60'% (high 1500s in SPX to a low of 666).

NEVER.

(Again, not saying it will happen, but love those NEVER statements.)
They're my favorites too!

I remember very well my father being scolded by his banker for paying off his home.

"It's *foolish* to pay off a home, when you can invest those funds in the stock market!"

This was shortly before the 2000 stock market crash.

That particular bank is now a dentist's office- out of business.. 😜
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Old 08-12-2017, 09:45 AM
 
2,807 posts, read 3,189,757 times
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Quote:
Originally Posted by Burkmere View Post
Just love those NEVER statements. Like back in 2006 when almost EVERYONE was saying that real estate could NEVER decline 50% and the stock market decline would NEVER decline nearly 60'% (high 1500s in SPX to a low of 666).

NEVER.

(Again, not saying it will happen, but love those NEVER statements.)
Well, what post WW2 recession was not preceded by an oil price explosion? From $10 in 1999 to $147 in 2008 surely did it. Just like 1973 oil embargo, 1990 Kuwait war etc. However, now we went from $110 in 2014 to $50, so we're down by more than half. What recession was preceded (not followed) by oil prices going down in price by half? - If anything I would be concerned about something like the 1986 crash in the oil patch, but not Phoenix. Conversely, if oil prices doubled from here then I will be very concerned about our local RE prices.
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Old 08-12-2017, 10:12 AM
 
Location: Rural Michigan
6,341 posts, read 14,723,970 times
Reputation: 10550
Quote:
Originally Posted by Potential_Landlord View Post
Well, what post WW2 recession was not preceded by an oil price explosion? From $10 in 1999 to $147 in 2008 surely did it. Just like 1973 oil embargo, 1990 Kuwait war etc. However, now we went from $110 in 2014 to $50, so we're down by more than half. What recession was preceded (not followed) by oil prices going down in price by half? - If anything I would be concerned about something like the 1986 crash in the oil patch, but not Phoenix. Conversely, if oil prices doubled from here then I will be very concerned about our local RE prices.
But oil prices aren't rational & the few that control that industry are getting better & better at raising prices significantly for no reason. The current administration couldn't be more friendly towards big oil, so there's no fox watching that particular henhouse. The oil companies could surely cause a recession (I agree they were heavily responsible for the last one) & they could do it just based on greed because they have so much market power. As it is, it's not even unusual to see a +$.50 spread in prices just because they can.
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Old 08-12-2017, 01:45 PM
 
186 posts, read 196,300 times
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It's curious that the student loan debt crisis that has been building over the past ten years or more isn't even on the radar of many so-called economic experts. This could very well be the catalyst for the next big "correction".
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Old 08-12-2017, 09:34 PM
 
2,807 posts, read 3,189,757 times
Reputation: 2709
Quote:
Originally Posted by Zippyman View Post
But oil prices aren't rational & the few that control that industry are getting better & better at raising prices significantly for no reason. The current administration couldn't be more friendly towards big oil, so there's no fox watching that particular henhouse. The oil companies could surely cause a recession (I agree they were heavily responsible for the last one) & they could do it just based on greed because they have so much market power. As it is, it's not even unusual to see a +$.50 spread in prices just because they can.
Energy price explosions are always possible. They would come first, then a recession and RE prices in danger of falling. Nobody knows if this is going to happen in the future but right now it's not the case. As of now, there is no danger of falling RE prices in Phoenix and we have at least a year before a recession. I don't think we can make any safe predictions beyond this.
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