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doix

I've been waiting for a downturn since I missed the one in 08 and it seems to never come.

I've resigned to the fact that I'll probably never own property and eventually move into a camper van.

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I see you haven't looked at the camper van market lately.

This is both funny and depressing.

I think one of the issues is this, there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom.

I do wonder though, if all this cash in the bank people are hoarding for the downturn will have other effects on the economy, recession ?

I'm in the same boat though, I've saved and invested a shirtload of cash waiting for a downturn.

Are people hoarding cash/assets? From what I understand the savings rate has been dropping across the western world.

In theory though, savings are countercyclical. People made unemployed can still maintain their spending. So it helps break the feedback loop of redundancies -> falling spending -> redundancies.

Although we seem to be heading for recession, with high inflation and interest rates, so the normal mechanism of decreasing interest rates to get people spending isn't really available currently.

I'm not spending my money until house prices come down basically, so maybe I'm the cause of the recession but bad luck I guess.

If you're refraining from spending you are suppressing inflation. Where high inflation looks like it is going to cause a recession. so I would say your actions are a net benefit.

> From what I understand the savings rate has been dropping across the western world.

I’m not sure that’s the case. It may have just declined, but I think it was pretty high, during the COVID years.

I was thinking generational timescales, rather than the last 2 or 3 years, so we're probably both right.

> “…there are so, so many people waiting to buy in the downturn with money saved that it will create its own boom.”

I think this is basically what happened in mid/late 2020. There was a short-lived crash across all asset classes, from stocks to Manhattan condos, and people piled in with the Fed and other central banks willingly feeding stimulus money to the frenzy.

The problem is that it is kind of like the stock market. This year's Nasdaq's bear market has only reversed a couple of years worth of growth. If you have been waiting on the sideline in cash for a sell off to invest for the last 10 years, you are way worse off than having jumped in at the first opportunity and taken the ups and downs of the market.

It’ll happen slowly then all at once. Be ready to make a move in the next couple years. Be patient, but pounce quickly.

If the downturn is so short you need to "pounce quickly" it isn't much of a downturn. Some countries have had stagnant real estate markets for years.

Anyway interest rates are not going down to 2% anytime soon so don't hold your breath. People who bought/refinanced in 2020-2021 will probably never sell.

Prices going up and down isn't symmetrical behavior in terms of speed. People love increase sale prices as soon as possible and detest lowering them down, many can afford to wait if they expect massive additional income within few years.

US is more flexible than say Europe in this (and other aspects of society) but I have no doubt this applies there too.

This. We refi’d in 2020 and our monthly payment is just stupendously cheap now, like < 1/7 my monthly take home pay. Even though we sort of need a bigger house at this point, the thought of giving this up makes entering the market again a complete non-starter. I feel bad for anyone trying to buy a house in the US right now, particularly their first.

High inflation is good if you've just bought a house though.

Yes it's hard to begin with but compound inflation soon erodes the value of the debt.

This assumes housing moves with inflation, which will not be the case if real wages to pay high interest mortgages do not rise with inflation or prices for housing drop to compensate, which has already started. Buying at the peak even with low interest rates is not a panacea.

>This assumes housing moves with inflation

No it doesn't. When you buy a house your price is locked in.

It assumes wages track inflation which is generally the case.

I also made no assumption as to whether this is a peak or trough in the housing market. Obviously it's better to buy at the bottom but that requires market timing. But in either scenario, assuming wages track inflation, the value of your mortgage is eroded faster, the higher inflation is.

> People who bought/refinanced in 2020-2021 will probably never sell.

They may not be able to sell for 10-12 years if prices move down like they did in the last real estate down cycle. There is a reasonable risk that this process has already started.

I see HN didn't take my horoscope well, so I'll leave this chart as an addendum ;)

https://data.sca.isr.umich.edu/get-chart.php?y=2022&m=9&n=41...

> It’ll happen slowly then all at once. Be ready to make a move in the next couple years. Be patient, but pounce quickly.

Also, a stranger will present an opportunity. Don’t keep your authentic self under wraps. If you can hold your nerve and invest in a friendship, you may realize gains while romance is favored by Mercury.

I too immediately pictured a middle-aged TV celebrity uplit by a crystal ball as I read this prophecy. Thank you for the chuckle.

Amazing

Doubtful. It's not like the housing market will crash but everything else will remain the same. If it happens, it will drag many other sectors down with it.

Okay - great, houses are 50% cheaper than they were in 2021, but now you got laid off your old job and are making only 60% of your previous pay check after 4 months of unemployment, and inflation and interest rates continues to rise

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

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