Quote:
Originally Posted by RickFLM4
I don’t think it’s anything like the last housing boom / bust. I don’t think the market now is flooded with people trying to flip or tons of people borrowing way over their heads and having been through a mortgage process last year, I think underwriting standards are far different today.
If people are renting now, but have enough money to put down and retain some savings, I don’t see the problem with purchasing now within their means. If they lose their jobs they won’t be much worse off owning vs. renting. There is still a housing payment either way. For people who live on the edge with insufficient earnings and savings, well I don’t think they should ever be buying.
For commercial, yes there are tons of tenants looking for rent relief right now, whether they actually need it or not. Those tenants will either recover soon or go away and get replaced by new businesses who also need employees. We are not yet on the edge of an economic Armageddon and while possible, so is recovery after a couple of years of sluggish economy.
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While the investment speculation is certainly not a prevalent factor in the current market and underwriting standards have tightened up, I feel there is still some speculation as to I better jump in now before rates go up etc, etc. In my opinion, if you lose your job, it's far easier to recover if you are renting versus if you own a home. When renting, you can easily move to another living arrangement that is cheaper. When you have property you can't expect to flip it overnight. Not to mention the costs associated with selling.
I can say my company is provides a significant boost to the economy. When we have networking/social functions, it's crazy the amount of money we spend at local bars and restaurants. All that is gone till at least January. And then it remains to be seen if the decision will be made for us to start going back into the office and having face to face meetings again. Google has already announced they're remote working till next summer. And no matter where you are with the opening up of schools, you have parents scrambling to figure this out. In two income households, one of the parents will have to stay home thereby shrinking their overall income or they have to find alternate schooling which means paying out of pocket.
Don't get me wrong, I hope we do have a V shaped recovery. But I'm on the pessimistic side of things. With that said, I'm still pumping money into the stock market and doing ok even with the market volatility. Had the same philosophy during the last recession and it's paid off in spades for me.