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re: 2 year inverted yield curve

Posted on 4/24/24 at 11:47 am to
Posted by Big Scrub TX
Member since Dec 2013
33578 posts
Posted on 4/24/24 at 11:47 am to
quote:

You see on the link a large correction in 2008, we are the peak today. It could even be worse than a 2008 correction. It may get back in line with 1950 through 2000 rates.
Your "analysis" leaves out many MANY relevant factors.

For one, the 2008 bubble pop was led by housing, not trailed by it. And that was because housing had become a game - zero equity, crazy leverage, etc. As anyone on here knows who has bought a house in the last 10 years - regardless of how good of a credit you are - it's MUCH harder to get a mortgage than back then.

IOW, homeowners have much more equity and are much better credits in the first place.

You might also take a look at price to rent ratios from now as compared to 2008. I can guarantee you they are way more in line now than they were then. And that's really what a piece of real estate is - the PV of future cashflows to be delivered.
Posted by SquatchDawg
Cohutta Wilderness
Member since Sep 2012
14260 posts
Posted on 4/24/24 at 12:11 pm to
I read something recently that Boomers own almost 40% of the homes nationwide. That’s a huge number that will naturally unwind over the next 10 or so years. Even if they leave them to siblings there will be a lot of selling of mom and dad’s place into a younger group of buyers that if he not have the resources to pay the perceived worth.

I wonder how this will impact prices in the long term?
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