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Saving cash, because the obvious situation is to wait for the crash. It’s going to happen and then I won’t be wasting 2/3rd of my money on the inflated market i

Saving cash, because the obvious situation is to wait for the crash. It’s going to happen and then I won’t be wasting 2/3rd of my money on the inflated market investment value of what is one of the basic human needs. Real estate as an investment is the sand that a big part of the currently precarious global financial situation sits on. It’s going to collapse in my lifetime and I’d rather be sitting on a pile of cash the moment it happens than be leveraged hip deep in some stock brokerage unable to turn my cash into the one thing my parents and their parents generation got to take for granted, ownership of the land they lived on.

fairity 5y ago
Given how rare a 66% crash is, it seems suboptimal to sit on cash until one occurs. I think there are only two instances in the past century where prices crashed 66% from all time highs. At a 7% annual return, you’ll triple your principal in 16 years, at which point you will still come out ahead even after a 66% crash.
- llampx 5y ago
  In recent years, house prices have gone up faster than most people's ability to save up a down payment (barring 0 down offers). So let's say you wanted to save 20% for a down payment and closing costs. That 20% was growing faster than people's ability to save for it. These are the buyers that have been priced out of the market and are the ones that pretty much have to wait for a crash.
  - techdragon 5y ago
    While I’m not in this exact situation, it’s why I’m waiting. I’m barely over the edge of this with enough that I could pull the trigger assuming I feel like completely changing my work life balance, commuting arrangements, social life, etc, in order to move a significant distance away in order to take advantage of lower property prices. It’s obvious as someone living in an area where value is rising faster than peoples ability to save, that the crash will be quite dramatic in these areas in particular. While I don’t expect a 2/3rd crash across the entire property market, I do expect major price realignments well in excess of 25%

fairity 5y ago

Given how rare a 66% crash is, it seems suboptimal to sit on cash until one occurs. I think there are only two instances in the past century where prices crashed 66% from all time highs. At a 7% annual return, you’ll triple your principal in 16 years, at which point you will still come out ahead even after a 66% crash.

llampx 5y ago
In recent years, house prices have gone up faster than most people's ability to save up a down payment (barring 0 down offers). So let's say you wanted to save 20% for a down payment and closing costs. That 20% was growing faster than people's ability to save for it. These are the buyers that have been priced out of the market and are the ones that pretty much have to wait for a crash.
- techdragon 5y ago
  While I’m not in this exact situation, it’s why I’m waiting. I’m barely over the edge of this with enough that I could pull the trigger assuming I feel like completely changing my work life balance, commuting arrangements, social life, etc, in order to move a significant distance away in order to take advantage of lower property prices. It’s obvious as someone living in an area where value is rising faster than peoples ability to save, that the crash will be quite dramatic in these areas in particular. While I don’t expect a 2/3rd crash across the entire property market, I do expect major price realignments well in excess of 25%