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Fuel prices will continue rising then probably jump around the middle of the decade. Fuel price jumps will become more rapid as fossil fuels are depleted. That covers all costs of living: driving, home heating, food transportation, electricity, etc. A suburban collapse is coming. Twentysomethings are leaving suburbs now for urban carfree living.
Twentysomethings always tend to move into the cities--it's where educational opportunities, jobs, and (at least before the lockdowns) culture and entertainment are concentrated.
But twentysomethings aren't the only segment of the population that matters. What are older adults doing?
I can tell you right now that a lot of people who can work from home, and who can afford to make the move, are bugging out of my city to the nearby suburbs and semi-rural areas. They're mostly people in their mid-30s to around 60, most of whom have been urban-dwellers since at least their college days, but they are now either getting out, or buying a second property to move to if/when things get bad. Sure, we still have 20-somethings coming in, and probably always will, but right now a significant number of "grown ups" are either leaving, or giving serious thought to it, or would do so if they were able. Hey, I'm one of them (in my mid-50s). And we're just in the first wave; in the coming decade, I think we're going to have a new exodus out of the cities, just as we saw in the mid-20th century.
There's very little joy living in a city where everything that makes city life pleasurable is shut down, and where there is not only increasing civil unrest, homelessness, and lawlessness, but a city government and a sizeable portion of the population that actively encourages them.
I think everyone who bought in the last year or two is going to be regretting it once the forclosures come and tenants are kicked out finally. I know a ton of losers who’ve just stopped paying because they can. Low inventory blah blah will go away and this propping up of a fake market will all fall apart. Most people still can’t work remotely and business has suffered massively in many sectors so there’s that as well. Commercial real estate is being hammered and won’t recover for long time.
I believe the root cause of the problem is that during the last recession it wasn't 'allowed' for housing market to reset itself (aka free market). Instead, ultra low interest rates allowed additional number of folks to get into the housing market who otherwise wouldn't. That, in turn, created artificial (or real) lower demand pushing the prices up. People got used to these low rates as if they are guaranteed for life and neglect huge price increases. I would prefer a cheaper anything with a higher interest rate, than an artificially set higher price with low rate.
It has to come to a stop, mathematically. Way too many folks are leveraged to the hilt, over-stretched, etc. Most lending is non-banking based and I believe there is a bubble somewhere there again, just maybe not as obvious as in 2007 or so. If housing prices do not go hand in hand with wage increases, something is sick in the system.
Real estate is local and there are always pockets that will be resilient though.
I think everyone who bought in the last year or two is going to be regretting it once the forclosures come and tenants are kicked out finally. I know a ton of losers who’ve just stopped paying because they can. Low inventory blah blah will go away and this propping up of a fake market will all fall apart. Most people still can’t work remotely and business has suffered massively in many sectors so there’s that as well. Commercial real estate is being hammered and won’t recover for long time.
Oh my God, not this junk again.
If tons of renters / home owners are kicked out of their homes due to no fault of their own (their jobs lost due to a natural disaster / global pandemic), you think society is not going to have bigger issues than real estate prices falling?
We will have societal unrest and upheaval. That simply will not be allowed to happen as stability is core to our economy / society.
Whine all you want about government intervention, it's what's needed to help many people in this economy.
Sorry, but your fantasies of massive real estate collapse is simply not going to happen.
A lot will depend on how the post-eviction-ban era is handled. We might end up with a lot of people on the streets and empty homes, or, perhaps, there will be some sort of bailout (either using public money or via landlords settling the excess debt with tenants). Tenants who don't owe a lot of back rent could potentially get caught up if they are still employed and have things of value to resell such as furniture and jewelry. But people who are truly at rock bottom will likely end up homeless.
If tons of renters / home owners are kicked out of their homes due to no fault of their own (their jobs lost due to a natural disaster / global pandemic), you think society is not going to have bigger issues than real estate prices falling?
We will have societal unrest and upheaval. That simply will not be allowed to happen as stability is core to our economy / society.
Whine all you want about government intervention, it's what's needed to help many people in this economy.
Sorry, but your fantasies of massive real estate collapse is simply not going to happen.
I am planning on buying a house in the next year or two. But we are a little conflicted. We want to save enough money for a down payment of 20% or around 70 k , but and also have at least 50k in savings. I am thinking in the summer of 2022. But I don't want to miss and opportunity to buy now if the prices only going to rise.
I'm sure glad you guys have a crystal ball and can see into the future.
I feel relieved.
LOL!!! That's what I was thinking, too. My crystal ball is down for the count.
However, I honestly don't care if there is a real estate bubble or collapse. I am living in a wonderful home that I bought five years ago. It fits my needs perfectly, and it is in a nice quiet neighborhood. I hope I never move again. It's just right for me. I love it and it feels like home.
I can hardly believe how high the prices of houses on our block have gone in the past five years, and I love to look at realtor dot com just to marvel at these insane prices. When I bought my house, I thought it was at the top of a bubble and that I was paying an insanely high price for it. Guess what: it's worth twice that much now. But realistically, it's all just on paper for me - - I'll never move so I'll never see a penny of it.
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