Is a real estate crash/dip due?

[exstasie]

It's all tourism related, real estate prices will only change in places where tourism is high.

The job losses go way beyond tourism.

63% of homes in the US are mortgaged. Unemployment could hit 20%+ and is expected to stay above 10% for the next 1.5 years at least. You don't see any connection between high debt and high unemployment? No possibility of foreclosures on the horizon?

There is already some fear of systemic weakness in the mortgage sector too: https://www.marketwatch.com/story/heres-the-hard-truth-about-the-mortgage-markets-that-isnt-being-told-2020-04-02

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[countryfree]

It's all tourism related, real estate prices will only change in places where tourism is high.

It's a factor but not the main driver in the most deranged places. Look at places like Vancouver. That's Chinese money that's been driving things. It's not tourism, it may be citizenship tourism.

Yes, citizenship tourism, but will this last? There used to be quite many wealthy Chinese willing to invest outside of China, this may change.

I hadn't given much thought about mortgages. It's hard to imagine how many people won't be able to pay back what they should, hence leading to bank seizures. That could cause a crash in some places, but I expect politics to play a role here. I know millions have lost their jobs, but turning them into millions of homeless, would be a tragedy. I'm sure politicians are thinking about it. They could write a new law stating that people who have lost their job could get a 6 months extension of their mortgage without penalty.

[thehun]

It's already here, at least where I live (Spain). Property prices have dipped 20-30% in some cases, most especially those that were being rented out to tourists. And I can only forecast further dips with the rising numbers of unemployment, foreclosures and everything that is yet to come.

[jackg]

Well, considering there is a renting problem right now, real estate should be dropping in value for a while right now, I don't know why it hasn't. Think about it if you owned a bunch of buildings and people are denying to pay for the rent, you are making no profit at all and you are basically going broke as well.

I understand that as a leftist myself the ownership of many buildings sounds capitalist and I should not support that, however in this situation the trouble is with the system and not with the people that own the buildings.

I think in the UK you have to prove you have sufficient liquidity to pay off a loan and maintain it or you have to get loans that don't surpass 20% of general annual income (this could be completely wrong though). Landlords that have been here a while will not have much to worry about if they were preparing for a crash to pick up new properties, some have threefold in certain growing regions here in value so a lot of liquidity could probably still be found even if the rate halves or something.

Real estate is not collapsing but is just a situation new to the world, the covid-19 pandemic that is causing hardship because countries are losing focus or rather channeling resources to covid-19 issues. Also some land owners are cutting off their hodlings as there are no new investment on the area or real estate. It will come up when this problem is gone.

Saw a news article today asying a lot of real estate has started to stagnate due to covid 19 and it'll cause more problems over the next year or so immediately for definite...

A lot of people will struggle to do viewings and get listings and if people want to stay in a house to see how it feels are you going to have a 2 week period between people so no one catches anything how's that going to work?

A lot of people will say you can do virtual viewings but who trusts estate agents not to "touch up" photos or hide creatin things... Painting the day before a dry spell and then pretending there is no damp/mould is possible if you can't smell it or anything...

[mersal]

Real Estate crash is coming soon, but its not going to hit immediately atleast where I am living, because still people are under lockdown and enjoying government offers at the moment but once everything becomes normal, all the economy will restart their economy growth so it will take lot of time to increase the cash flow in their economy, no cash flow means no demand so no profits for anyone so landlord will be forced to decrease the rent or they will get nothing.

[exstasie]

It's already here, at least where I live (Spain). Property prices have dipped 20-30% in some cases, most especially those that were being rented out to tourists. And I can only forecast further dips with the rising numbers of unemployment, foreclosures and everything that is yet to come.

Sounds like just short-term and vacation rentals. They've been hit hard since nobody has been traveling. I've seen some stories about Airbnb hosts slashing rates 50% and such, desperate for bookings. There are signs of a rebound coming with lockdowns ending however: https://www.prnewswire.com/news-releases/airbnb-booking-data-points-to-v-shaped-recovery-in-the-us-301056322.html

Within the United States, the Airbnb markets showing the fastest recoveries are concentrated in states that ended their lockdowns earliest. The most significant of these include Texas, Georgia, and Arizona, where 90-day Airbnb occupancy rates have increased by 9.99%, 8.28%, and 7.75% week-on-week, respectively.

A real crash in the traditional housing market would take a lot longer than a couple months to happen, especially with corona virus mortgage deferments temporarily stopping the bleeding.

[Febo]

Lack of tourism already is fuelling real estate crash. Those that were renting their apartments to tourists thru Airbnb are now trying to get native renters. That is already decreasing rent prices. Lower rents will force some landowners to sell some apartments. That pressure now that everyone is uncertain what will come next will push prices of real estate down.  At the same time we will have inflation since everything will get more expensive because of higher costs because of covid-19 precautions.

[countryfree]

It's already here, at least where I live (Spain). Property prices have dipped 20-30% in some cases, most especially those that were being rented out to tourists. And I can only forecast further dips with the rising numbers of unemployment, foreclosures and everything that is yet to come.

Good to know. Unfortunately, I don't like Spain very much, but I'm waiting for the same thing to happen in the countries I love.

[FanatMonet]

Real estate prices should fall, because many people will not have money, and selling will become much more difficult. The only option is if the government issues some kind of preferential mortgage in order to revive demand for this sector.

[Hydrogen]

So do you think a crash is coming and would you predict when it would be? Last time it was 18 months (back in 2006) afaik.

Real estate prices (and stock/bond markets) won't crash in earnest until central banks like the federal reserve run out of bailout capital.

In the united states real estate construction and development has failed to maintain pace with population growth. This has contributed towards real estate being a scarce(r) commodity. This decreased supply in contrast to population drives real estate prices higher.

On the opposite end of the spectrum, growing wealth and wage inequality coupled with inflated taxes significantly reduced the number of consumers that can afford to purchase real estate. These conditions represent diminished demand. Which depresses prices downwards.

Where these two underlying conditions meet is the point at which the price of real estate is determined.

As mentioned the federal reserve has been known to inject trillions of dollars into markets in an effort to stabilize them. 2008 was a prime example of how real estate in subprime mortgage markets carry a potential to damage global markets. Derivatives being tied up in real estate could illustrate how the fed would stabilize those markets to prevent similar disasters.

Fed bailouts could be a reasonable solution if the corona virus crisis is averted soon. Over the long term however, it could prove to be insufficient.

[CarnagexD]

We are facing this pandemic outbreak because of the virus spreading and one of the affected is the worldwide economy and some of the people today are still recovering and some of them does not have enough money to make a restart on their life there is a chance if they are going to sell their house and lot to make more capital to make a new life. But still, it depends on them because the real state businesses do not make any changes because it is an asset it's a huge loss to them if they are trying to sell their property. This is just only IMO and I respect others but still, we need to wait to finish this outbreak and take a look if this will happen or not.

Real estate prices should fall, because many people will not have money, and selling will become much more difficult. The only option is if the government issues some kind of preferential mortgage in order to revive demand for this sector.

Still, it depends on the people if they are trying to sell for sure many investors will grab this kind of opportunity to make a lot of property and assets.

[Argoo]

We see that most states have taken too harsh measures to combat the spread of coronavirus and thereby have caused significant damage to economies. Business structures were also hit hard. Many of them simply ceased their activities. Therefore, definitely we will soon enter into a tough global economic crisis. With such crises, everything depreciates, including real estate.
However, this will be a good chance for the first time to prove itself to a decentralized cryptocurrency. We hope that during a crisis, cryptocurrency, on the contrary, will be in demand and grow in value.

[abhiseshakana]

Lockdown makes general business activities face major obstacles, including investing, renting, and buying property. The situation of the property market that was hit by the Covid-19 pandemic instead of eliminating property consumers. The market remains large and it's just that the priority now is more on safety and health. The decline in the investor segment is more influenced by psychological factors in delaying purchases rather than purchasing power.

Even though the property sector is experiencing a decline in demand, it is one sector that is still growing. The existence of a pandemic will be followed by a discount on property prices and tightening the requirements of the changes. For those who have money, of course, the low price of property means it's time to buy both for needs and investments. The weakest point of hotels, land, and retail properties now creates good investment opportunities.

With a lockdown, the millennial consumption budget can be diverted for property investment. Even though it is a medium and long term investment, but investment in this sector is relatively safe.

Although many were hit but there are also businesses that still exist and even grow, namely small and medium businesses that are integrated with sophisticated technology or so-called small and medium businesses 4.0

[MCobian]

With the economic crisis experienced by many people due to the corona virus, real estate investment is crashing. People nowadays focus
on food costs everyday than thinking about investing, the impact of the corona virus is huge in the investment world. Many people lose
their income, because it doesn't work anymore. Even investors this year will not be interested in investing in real estate. For the present
condition it is not good decision investing in real estate. Safer and more profitable investment in gold or cryptocurrency.

[billykannithi]

I think the world crisis is comming soon. Many signals that We can see: public debt increased, businesses went bankrupt continuously, and countries simultaneously printed money to ease the burden on the government and most recently, FED's action against the Covid -19 epidemic. The US-China trade war will continue and it will be the trigger for this economic crisis

[Paycoinzzz]

When the economic crisis occurred, all assets were drastically reduced. Especially for real estate, when people now only need with food and clothing. If the corona virus epidemic continues until the end of Q3 this year, it is likely that the US will have to be the first country to suffer the economic crisis and drag many countries around. This is the time when real estate is freezing and demand has greatly reduced since the beginning of 2020. To me, there will surely be a strong adjustment in the next few months.

[michellee]

We don't know for sure, but it might happen soon because people now are lost their job while they stay at home, they can earn money like usual, many unemployment wants to search for the job, but the job is not open as before.

People need money to buy food, drink and else, and they need to survive at this moment. If the government cannot serve them, I think sooner or later there will be a demonstration from the people because they need to live. I am worried about this situation because this can trigger the crime increase in every city. But I pray that will not happens, and everything will be back normal.

[bits4books]

I don’t believe in real estate fall right now. Why?
Today's youth have a completely different model of consumption. If even at the end of the last century/at the beginning of the XX century, everyone believed that they needed their own housing, even if it was a mortgage (hi 2008), now young people prefer to rent housing to preserve their territorial mobility.
As a result, we get that some people buy housing (even if again in the mortgage) and pay for it at the expense of young people who rent this housing. This is quite an interesting phenomenon of the money cycle between generations that began just after the final conditional strengthening of the EU and the it boom in America and India (after the collapse of the dot com bubble)

[el kaka22]

Considering right now there is really that many people who would be willing to consider buying a house, I think we can't really say it is a market crash but more like a market stopping. I mean normally for the market to crash, you need to have houses cheaper, and your house probably worths the same right now, depends on the nation as well but all around the world buying a house must be the last thing people are thinking right now.

So, there has to be money to be made from this market before you can talk about a crash, right now people are not selling nor buying, so it stopped. However, when all of this is over and people go back into investment and everything goes back to normal, there could be one in the future, but that is like at least 6 months away if you ask me.

[exstasie]

Pessimistic read about the state of the housing market: Why ‘the next big shoe to drop’ in the U.S. economy could hit by July

According to Thomas Stone, a Sonoma Country realtor quoted on the Wolf Street blog, there’s a very rough road ahead in the housing sector due to falling appraisals, a trickier loan market and a glut of vacation rentals that owners need to shed.

“The next big shoe to drop will be when appraisers call a declining market, probably in August but perhaps as early as July,” he said. “And this bleeds into the difficulties of getting a mortgage.”

A new report from Oxford Economics estimates that 15% of homeowners will fall behind on their monthly mortgage payments, which would mean delinquencies caused by the coronavirus pandemic would exceed the number seen during the Great Recession.

“The uncertainty in the mortgage market has contributed to a significant tightening of lending standards that may persist even once a recovery is underway,” Oxford Economics wrote.

“So there you have it,” Richter said, putting an exclamation point on his dire forecast. “A most splendid housing bubble and an equally splendid vacation-rental boom that were both caught at the peak in their most vulnerable state by The Virus that upended everything.”

Makes sense that it would take several months for the shock to sink into the market. I still can't find much data about just how big the short term rental market is, but between that supply, eventual foreclosures, and falling demand from tightening mortgage standards, prices should be pressured down eventually.