Real estate decline 2020

I'd argue that anyone blessed enough to be sitting on a big pile of cash use as little of it as possible and invest it into the most inflation-resistant asset classes available to them.

With mortgage rates being so cheap, if you qualify for one and want to buy a home, I say bring on the debt! There's a lot of value to be had by hanging on to cash to invest in assets other than real estate. If mortgage rates were 20%, I'd think differently. With decent credit here in the U.S., you can easily get sub 4%, which should be outpaced by inflation in the coming years. I know a lot of people are philosophically opposed to debt, but strategic debt in a low-interest rate environment makes a lot of sense. It allows you to deploy your capital elsewhere at a much higher rate of return, or hedge against your real estate dropping in price/value if you go to sell in case the bottom falls out of the housing market.

Housing prices are still way too expensive IMHO.

With so many people losing their jobs and what should be their homes, there should be much more supply of homes for sale than qualified buyers, thus forcing downward pricing pressure. Unless federal governments step in and force landlords/mortgage companies to rent/loan to under-qualified individuals or do indefinite mortgage/rent moratoriums, eventually there will be a crash. It seems like the crash should already be here, but due to government meddling in the markets, it has been kicked down the the road, at least for now. I don't see that carrying on forever.

Plan accordingly.
 

Arado

Pelican
Gold Member
Interesting idea--maybe Williston?

Thanks for the suggestion!

Took a look on zillow looks like prices skyrocketed from 2011 till 2017 ish, when the increase really slowed down and peaked out earlier this year. So far only slight decrease, need to see what will happen once the shale really goes bust and mortgage forbearance ends.

Prices are a lot cheaper than the major US cities, but seem a bit higher than other similar (non oil boom) cities in the middle of nowhere.

There must be other regions that will suffer in the short term due to failing industries but long term are good bets to build a solid community.
 

Roosh

Cardinal
In some areas, housing prices are going up because of decreased inventory:
The foreclosure won't see the effects of the COVID-19 pandemic for quite a while, said Muskingum County Treasurer Chris Hamill, simply because of the length of the foreclosure process. She did note sheriff sales have begun again after a several month hiatus because of the pandemic.

McCollister thinks the lack of inventory might be inflating housing prices. "I have a little bit of concern here lately, we have had some overpriced listings go in contract at full price. That got us into an issue years ago," he said. "I don't think there are enough properties selling right now that can inflate the market, but what is selling is bringing a pretty penny."

Newland agreed. "If you are buying something now you are probably going to be paying a little more for it. When a house hits the market you might have three or four buyers looking for that same kind of house." That can lead to a bidding war, he said.
It looks like we will have to wait for 2021 to see more reasonable prices.
 

Max Roscoe

Kingfisher
I'd argue that anyone blessed enough to be sitting on a big pile of cash use as little of it as possible and invest it into the most inflation-resistant asset classes available to them.

With mortgage rates being so cheap, if you qualify for one and want to buy a home, I say bring on the debt! There's a lot of value to be had by hanging on to cash to invest in assets other than real estate. If mortgage rates were 20%, I'd think differently. With decent credit here in the U.S., you can easily get sub 4%, which should be outpaced by inflation in the coming years. I know a lot of people are philosophically opposed to debt, but strategic debt in a low-interest rate environment makes a lot of sense. It allows you to deploy your capital elsewhere at a much higher rate of return, or hedge against your real estate dropping in price/value if you go to sell in case the bottom falls out of the housing market.

Housing prices are still way too expensive IMHO.
This is pretty good advice overall, but I'd recommend if possible you avoid debt. I saw lots of people get wiped out in 2007-2008, and others were fine. Some declared bankruptcy and lost everything. The difference basically came down to who had debt and who didn't,.

I owned an investment that lost around 100% of its equity, because I purchased it with so much debt. If I had instead purchased a property 1/4 the size with cash, it could have sat mostly vacant and I still wouldn't lose a penny. Debt is a double edged sword.
(The loss was over about a decade and due to governments heavily subsidizing and encouraging real estate investments, the after tax loss was closer to zero, but that is over complicating the matter).

A local successful investor I know uses debt for most of his investment purchases, but never a penny of debt on his home. And that's my philosophy as well. If you MUST use debt, use it as a tool to buy something larger than you could otherwise buy with cash (but do so at your own risk). In his case, he uses debt to buy rental houses. He could buy possibly 5 rental houses with cash, or perhaps 20 rental houses with debt. So he buys the 20. He has a specific reason to use debt. But he never, ever encumbers his own residence with debt.

Yes, debt is tempting, and yes it might work out. It is high on the risk/reward index, and I'm becoming more conservative (financially and otherwise) as I age. Ben Franklin and Shakespear both opined against debt. But real estate in general is basically just any commodity--it's like buying oil or water or cotton. No matter what happens, we all need somewhere to live, food to eat, clothes to wear, and a way to move about. And populations are only continuing to skyrocket (at least until the COVID vaccine makes us all infertile). So real estate will continue to have a higher price as greater numbers of people chase the same land to live on (remember, prices are only aribitrary *relative* symbols that we use to allocate a fixed number of resources amongst all the people living on planet earth).

I am more risk averse today than in the past, and I am also doing well financially and less motivated to make risky moves that could potentially earn me more money (ie in my investor buddy's situation, I would far rather own 5 houses outright and pocket all the rent, than deal with 20 and pay 20 mortgages each month) but the one factor that changes the situation is the price of debt: Interest rates in America are not based on true costs of borrowing, but instead dictated by the Federal Reserve. Current interest rates are below the rate of inflation (actual inflation or devaluation of the dollar is around 8% annually, while mortgages are often at 3 to 6%), which makes the use of debt very tempting. Just don't be greedy.
 

NoMoreTO

Ostrich
They are printing so much money I really don't know if real estate will go down in terms of dollar price.

Personally, I would rather dive in, start fixing up my home, adding some value, getting settled than bet against the market.

Sure, when all this unwinds in a year to two years there could be a serious pullback (10%) but given the inflation, it might not actually happen. Imagine that the dollars in circulation increase by 50% from March 2020 to December 2021, and the price of homes ticks up 10%, you just earned 40% on your investment vs. holding the cash.

Once more money is in the system and if/when the economy gets going, the inflation could run wild.

If I didn't have a home I would honestly jump in now, get a low rate and settle into your home.

I have an acquaintance in Toronto area, he has been waiting for a pullback for since 2010. Smart guy too, CFA. Just never bought himself a house because he was trying to play it as a market.
 
They are printing so much money I really don't know if real estate will go down in terms of dollar price.

Personally, I would rather dive in, start fixing up my home, adding some value, getting settled than bet against the market.

Sure, when all this unwinds in a year to two years there could be a serious pullback (10%) but given the inflation, it might not actually happen. Imagine that the dollars in circulation increase by 50% from March 2020 to December 2021, and the price of homes ticks up 10%, you just earned 40% on your investment vs. holding the cash.

Once more money is in the system and if/when the economy gets going, the inflation could run wild.

If I didn't have a home I would honestly jump in now, get a low rate and settle into your home.

I have an acquaintance in Toronto area, he has been waiting for a pullback for since 2010. Smart guy too, CFA. Just never bought himself a house because he was trying to play it as a market.

Yeah it's smart to play it as a market if you can afford to do so. Problem is that could takes ages. I haven't seen a dumpster fire correction in Toronto or any metro Australian city since forever.

Nobody is holding fiat. should only hold enough be enough to pay living expenses for 6-12 months. Hopefully the CFA is holding some kind of scarce asset.

There is a danger though that the whole thing collapses as people cannot support loans because there's no jobs and CERB or whatever stimulus welfare money dries up. Young people are saddled with worthless student loans and no capital and cannot enter the housing market. I think what will inevitably happen is foreign buyers coming in to buy everything up and this stops the price from correcting to affordable levels for native Canadians. The system is broken.
 

Max Roscoe

Kingfisher

The US allows people to buy citizenship for $500,000 (you are not even paying this as a fee, you are simply investing $500k in a US property or business). China produces *SO* much of the things we use on a daily basis, and they are awash in US dollars. Many, many Chinese have taken advantage of this, and Jared Kushner and his sister actually travelled around the country holding seminars signing up hordes of Chinese for this program. Of course, once one family member is in, they can apply for the whole rest of the family to come in via chain migration.

$500k is not chump change, but keep in mind there are a billion chinese, and the top 1% of them who may own factories and expensive homes = 10 MILLION people. Most of them can probably afford to buy a $500k property in the US. Since US banks will finance much of the purchase, you may only need $100,000 to buy citizenship here, and that's not even a fee--it's an investment where you can get that money back after you become a citizen.

Yes, foreigners are going to be snapping up American real estate and pushing prices even higher. To some degree, they don't even mind if the prices get more expensive. If $250,000 houses are inflated to $500,000 sales prices, they can now buy property all over the country that qualifies them for the investment green card. And there will be plenty on the US right who celebrate and applaud this because "look how much money you made when real estate prices doubled." The only way that benefits you is if you sell your US real estate and move to Mexico. Otherwise it's just more grifting and subsidizing immigration on the backs of hard working Americans that now struggle to afford home prices. I wouldn't be surprised if there is a similar plan in Canada.
 

Salinger

Woodpecker
It's a good time to buy in Russia. The Gov recently announced they'll be offering permanent residency if you buy a property in Russia over a certain amount. I already have an apartment in Moscow, but we're looking at a piece of land to build a dacha on. It's 800m2 for about $23,500 (10 miles from the outer Moscow Ring Road).

Krasnodar is actually the fastest growing city in Russia at the moment, so I'd expect prices to creep up there soon.

Have you been to Sochi? I was wondering what life is like over there for a single bachelor. It seems more affordable than the bigger cities like Moscow.
 

Muscovite

Sparrow
Have you been to Sochi? I was wondering what life is like over there for a single bachelor. It seems more affordable than the bigger cities like Moscow.
I've never been to Sochi and I know little about it. But, I'm heading to Crimea next week for some R&R at the beach with the family.

Moscow is expensive when you need to buy or rent accommodation, but other than that, living is quite cheap. Mobile phone and home internet packages are very cheap. Transport is also cheap compared to other places.

Most places on the South coast are good in summer, but dead in winter with very little to do. But you might be ok in a bigger place like Sochi. Some locals appear to be looking at other options too. We have friends that have been told they'll be working at home permanently since the virus, so living in Moscow isn't as necessary as before.

I'd personally move to a smaller town in Russia but we're heavily invested here. Our daughter's sports activities, my wife's family etc.
 
This is probably the last gobble up before neo communism comes into place, where the elites collude with each other to facilitate a total wealth transfer to each other.

Big real estate buys up everything, turns it into rentals and big gov pays for it via welfare.

In the next election which will be rigged so some commie will come into power and create a tax situation like in the worst parts of occupied western Europe like Belgium: 50% taxes for incomes over 25k, divorce rate 70%+. (that's what happens when men lose utilitarian value)

Buying property yourself in Europe with cheap mortgage rates probably isn't a bad idea as there is a very real chance of an EUR collapse / hyperinflation just like in the 1930s, however big cities can turn into complete hellholes and will probably be the center of kill whitey neo marxism and rural property most likely won't be affected much by the current situation in terms of bargains to be had.

The big city apartment price collapse will happen next year when mortgage holidays and government handouts are discontinued, people have used up all their savings and people that lost their jobs can't pay their mortgage any longer and get foreclosed on.

If you're paranoid about currency collapses / hyperinflation before that point and want to buy right now look at second tier cities where all the remote workers moved to if they aren't living with parents but keep in mind variable interest rates might totally f*ck you and cost you your property, so lock in a fixed rate as long as you can. (I'd say 10 years bare minimum)

The elites play all kinds of games to bankrupt outsiders and variable interest rates are one of them as well as cranking up property taxes on rural homes and properties that people own forever and a half already so you're forced to downsize until you're living in a shoebox or end up on the street.
 
Last edited:
Yes, foreigners are going to be snapping up American real estate and pushing prices even higher.

It's funny that Americans always think they're at the center of the world.

To the outside world the US is an unstable burning trash heap right now and the most stable places are fairly homogeneous former commie countries.

Where would you rather walk around right now? Kiev where the gopniks might look a bit intimidating but certainly won't murder you or Chicongo where you might randomly get killed by a mob?
 
Last edited:
I also know someone that sold their house pre-corona and is sitting on 1.5MM GBP cash.

Potentially a good situation, BUT weimar style hyper inflation could be devastating...

I don't see it happening for the GBP unless there are still liabilities despite of Brexit, but with the EUR anything can happen. Spain is crippled, Italy was never doing well, then there is Greece etc.

The UK is pretty lean (zero hour contracts, generally pro employer / business) and privatized with few permanent welfare parasites compared to France, Sweden, Germany etc.

Correct me if you think my perception is wrong.

The main danger in the UK is violence as the elites are promoting gang violence, robberies, rape and murder through music / media among minorities and the white underclass.
 
Last edited:

Troller

Kingfisher
"As of 23 April 2020, 78,278 investors have applied for the EB5 program.[12] Most investors—about 80 percent—come from four countries: China, South Korea, Taiwan and the United Kingdom."


Central banks run the show. BIS will implode the market when they decide. Now talks about 2026. Having a 6 on it might make it more believable. Satanic scum.

"This tighter stance of monetary policy slows real GDP growth by about ¾ percentage points in 2024 and 1½ percentage points in 2025 and 2026, implying a mild recession in 2026."

 
Last edited:
I've never been to Sochi and I know little about it. But, I'm heading to Crimea next week for some R&R at the beach with the family.

Moscow is expensive when you need to buy or rent accommodation, but other than that, living is quite cheap. Mobile phone and home internet packages are very cheap. Transport is also cheap compared to other places.

Most places on the South coast are good in summer, but dead in winter with very little to do. But you might be ok in a bigger place like Sochi. Some locals appear to be looking at other options too. We have friends that have been told they'll be working at home permanently since the virus, so living in Moscow isn't as necessary as before.

I'd personally move to a smaller town in Russia but we're heavily invested here. Our daughter's sports activities, my wife's family etc.
How much does it cost to buy a good apartment in Moscow? I guess the only other good investment might be St. Petersburg right? In 2021 there might be residency by investment as an option. Thanks.

which smaller cities would you recommend? Thanks
 

Muscovite

Sparrow
How much does it cost to buy a good apartment in Moscow? I guess the only other good investment might be St. Petersburg right? In 2021 there might be residency by investment as an option.
You can get something decent for about $150,000. If you want the centre, it would be more. Here's a link that will give you an idea of what's available in Moscow, and the prices. One million Rubles is about $13,500 at the moment.

I've been to St. Petersburg a few times. It's a great place to visit as a tourist, but not so sure about living there. It can be quite miserable in winter. In the summer you'll need to dodge all the other tourists, they're everywhere (probably not at the moment).

which smaller cities would you recommend?
I haven't been to that many. We normally go to smaller places in the country for camping or to the beach. Samara was nice, I could probably live there, but Ufa was not very nice at all.

There's a Russian guy from St. Petersburg who has a YouTube channel (in English). He visits many cities in Russia so that might give you an idea for other places.
 
How much does it cost to buy a good apartment in Moscow? I guess the only other good investment might be St. Petersburg right? In 2021 there might be residency by investment as an option. Thanks.

which smaller cities would you recommend? Thanks


What is "good" to you? (size, location etc.)

I'd say 40-50k is the lowest for a 200-300 sqft shoebox in a location that's not a complete hassle to commute from and newly built.

Keep in mind Russia is not Panama where you can randomly roll up, buy an apartment and get easy citizenship.

You need to find trustworthy lawyers / agents that won't see you as an easy mark and f*ck you over for everything from buying real estate to running a business (local salaries are peanuts for westerners unless you can fill a special niche) and getting your permits and eventually citizenship.

It's not the wild east of the 90s anymore that was fairly lawless but to get people on your side you better speak fluent Russian, cuck real hard to their culture and be able to spot the predators.

The average goofy American boomer will get eaten alive.

It's best to get recommendations from normal people as well there, check references etc.

Once the money is gone it's gone and I doubt you'll have much recourse against well connected locals.
 
Last edited:

Troller

Kingfisher

"The new approach, which could be unveiled as soon as next month, is likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming a modest, temporary rise above their 2% target to make up for past shortfalls."
 
Top