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Market Moves Suggest a Recession Is Unavoidable

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Re: Market Moves Suggest a Recession Is Unavoidable

#21

Post by mortivore »

wil421 wrote: post #4

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale. I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

This is where I am right now. On the one hand, waiting allows me to save up more, and put more thought into where exactly I'm buying. On the other hand, waiting for a recession to buy is timing the market which is notoriously difficult to do.

If your area is already a buyers market, then you should just go ahead, and buy some place you like.

Re: Market Moves Suggest a Recession Is Unavoidable

#23

Post by [deleted] »

TACIXAT wrote: post #14
wil421 wrote: post #4

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale. I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

Interest rates rising will lower prices a bit (in the end, a buyer taking out a loan will likely be paying the same, because what ever drops in house prices goes to the bank in interest). I dropped my home's price (undesirable neighborhood) pretty aggressively in the last 6 months before hiring a property manager to rent it out. I would recommend just keeping your eye out for deals. Right now is off peak season (in t…

[deleted]

Re: Market Moves Suggest a Recession Is Unavoidable

#24

Post by JPKab »

wil421 wrote: post #4

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale. I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

Keep in mind that you'll see a corresponding increase in rents as more buyers in a given area hold off on buying. The demand ends up just shifting. That's been the effect in Boulder, CO.

It all comes down to this: If you are looking at housing as an investment, you are buying into a decades long market aberration driven by super low interest rates and government policies.

Otherwise, if you look at it in terms of the specific supply and demand curve in your geographic area, you can better steer your decision making. My area (northwest of Denver, CO near Boulder) has local government policies which have seriously constrained housing supply. That made me choose to buy despite a less favorable macroeconomic landscape to home ownership.

Re: Market Moves Suggest a Recession Is Unavoidable

#25

Post by bytematic »

interfixus wrote: post #12
baybal2 wrote: post #5

Earlier quoted context omitted.

Into a piece of yellow metal. Edit. More background on that: In 2014, after years and years of my parents droning "think about buying a house," I finally decided to teach my parents a lesson, and show them just how bad their investment advice is. So in the end, I lost around 53 thousand dollars in total from FX, fees, lawyers, drop of property value, and my ability to sleep well at night. And in 2016, I got kicked ou…

No idea why you are downvoted. Indisputably the safest investment for several millenia running.

During periods of fx doubt, even more so. This includes recessions and right after them

Re: Market Moves Suggest a Recession Is Unavoidable

#26

Post by thoman23 »

RyanShook wrote: post #6
malvosenior wrote: post #2

If this is true, where is the best place to invest 10k-100k USD today?

Depends on your time horizon. If you have over 20 years before retiring the broad stock market is still likely going to outperform pretty much any other investment but it will be a bumpy ride.

Agreed. Time in the market beats time out of the market.

Re: Market Moves Suggest a Recession Is Unavoidable

#27

Post by malvosenior »

robertcorey wrote: post #8
malvosenior wrote: post #2

If this is true, where is the best place to invest 10k-100k USD today?

if you think the market will go down you should short it...

What would be the best way to do this? Is there an index fund or something that is based on shorts? Sorry for the lack of knowledge.

Re: Market Moves Suggest a Recession Is Unavoidable

#28

Post by rconti »

kolbe wrote: post #15

His main justification: "Just about everyone I talk to in the capital markets, including erstwhile bulls, acknowledges that things are slowing down." And "everyone knows it is coming." And "everyone knows that inverted yield curves are the most reliable recession indicators." He talks about home builders "getting crushed," which means they're trading at levels last seen in 2017. The large tech stock haircuts he refer…

He also said "the worst recessions are when nobody sees them coming" and asks if a recession can happen if everyone is saying it's happening.

Re: Market Moves Suggest a Recession Is Unavoidable

#29

Post by JPKab »

kolbe wrote: post #15

His main justification: "Just about everyone I talk to in the capital markets, including erstwhile bulls, acknowledges that things are slowing down." And "everyone knows it is coming." And "everyone knows that inverted yield curves are the most reliable recession indicators." He talks about home builders "getting crushed," which means they're trading at levels last seen in 2017. The large tech stock haircuts he refer…

Agreed. Typical financial market herd psychology BS.

Re: Market Moves Suggest a Recession Is Unavoidable

#30

Post by rubyn00bie »

wil421 wrote: post #4

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale. I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

My Econ game isn't as strong as it used to be, and this is by no means financial advice, just some spitballing...

I'd guess interest rates will rise, hopefully not like they did in the 80s, but I think Trump has been running the economy too hot... meaning inflation and your payments will go up. We want people to save (invest) not spend (consume) to fix this upcoming case (if I understand it correctly). As a result, I doubt lending will freeze since interest rates are likely to rise so getting a loan really shouldn't be too difficult if you've got good credit and a downpayment...

To be honest, I'd say it likely won't matter as recessions of some kind are fairly common and generally relatively benign with even moderately good economic policies. I highly doubt we'll see anything like the 2008 recession...

/shrug

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