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Anyone else a little concerned? Re: Housing and consumer debt
Posted on 9/28/25 at 11:05 am
Posted on 9/28/25 at 11:05 am
Just remembering back to one of the biggest, most impactful events of my life: the 2008 financial crisis and the often ignored signs that became apparent 1-3 years before it actually happened.
Some of the same signs of that financial crisis is showing now:
- Auto repossessions are up, leading to new car manufactures to rely more on loans made to more risky borrowers. Carmakers are running low on cash after dumping massive amounts of their budget on R&D for expensive products that may not be what people want/need now.
- Housing in the most volatile local economies appear to be experiencing declines in values - Las Vegas and parts of Florida in particular. The exact locations that started to falter as early as summer 2006. A nationwide decline in RE values followed and hit by 2008.
- Fed seems to be late to react to economic trends, including the initial signs of a major inflation trend in 2021-2022. Their decisions on rate drops are likely also too little, too late IMO.
- Employment data adjusted downward significantly from late 2024-summer 2025. So our data used for policymakers and investors to make decisions is either compromised for political reasons or the dynamics of our modern economy (including our gig economy) are legitimately more difficult to measure.
I am not an economist. I’m in manufacturing. Even I know today is not a complete apples to apples comparison to the years leading up to the Great Recession. But some of what I’m seeing in my industry plus the above obvious red flags are concerning.
Unlike 2008….I actually have a lot to lose now and I’m too old to reinvent myself again. Am I the only one that thinks we might have potentially painful issue with our economy brewing in 1-2 years time?
Some of the same signs of that financial crisis is showing now:
- Auto repossessions are up, leading to new car manufactures to rely more on loans made to more risky borrowers. Carmakers are running low on cash after dumping massive amounts of their budget on R&D for expensive products that may not be what people want/need now.
- Housing in the most volatile local economies appear to be experiencing declines in values - Las Vegas and parts of Florida in particular. The exact locations that started to falter as early as summer 2006. A nationwide decline in RE values followed and hit by 2008.
- Fed seems to be late to react to economic trends, including the initial signs of a major inflation trend in 2021-2022. Their decisions on rate drops are likely also too little, too late IMO.
- Employment data adjusted downward significantly from late 2024-summer 2025. So our data used for policymakers and investors to make decisions is either compromised for political reasons or the dynamics of our modern economy (including our gig economy) are legitimately more difficult to measure.
I am not an economist. I’m in manufacturing. Even I know today is not a complete apples to apples comparison to the years leading up to the Great Recession. But some of what I’m seeing in my industry plus the above obvious red flags are concerning.
Unlike 2008….I actually have a lot to lose now and I’m too old to reinvent myself again. Am I the only one that thinks we might have potentially painful issue with our economy brewing in 1-2 years time?
This post was edited on 9/28/25 at 11:34 am
4
Posted on 9/28/25 at 11:13 am to member12
No idea what will happen, but it won’t be like 2008. You’re not going to have the mass mortgage defaults and foreclosures. I think that aspect of it got cleaned up pretty well.
Posted on 9/28/25 at 11:19 am to member12
I sold my house last year at near top of the market in South Florida. I am a cash buyer, so a housing crash would benefit me.
If you are worried about a housing crash, just stay out until it is over. Even if you sell your current house, know that the next one you purchase will also be devalued. The concern I would have is if you are forced to sell and you end up upside down on your mortgage.
If you are worried about a housing crash, just stay out until it is over. Even if you sell your current house, know that the next one you purchase will also be devalued. The concern I would have is if you are forced to sell and you end up upside down on your mortgage.
Posted on 9/28/25 at 11:27 am to Jax-Tiger
quote:
If you are worried about a housing crash, just stay out until it is over.
I don’t think we are going to see a full blown crash like we did in 2008. But a big correction could occur if any major investment bubble elsewhere (some argue that this could be AI investments) bursts and triggers a recession. Definitely a big issue in Florida and Vegas now but some of that is just from pandemic era buyers paying out the nose to relocate.
We were hoping to pay cash for another rental around summer 2026. Kind of waiting to see if that’s still going to happen now.
Maybe I need cash to float for a while in case of a disruption in primary income if it lasts longer than our emergency fund. That would have to be very severe though.
Or there may be an opportunity to find a steal on a potential investment property. But either way if an idiot like me is thinking this, I’m sure a lot of people are already trying to move more of their net worth into cash to be ready to pounce. I’ve made no such moves yet.
Kind of just wanted to bounce this off of y’all and see if I’m crazy or not. I’ve been pessimistic about our economy for well over a year now. But not enough to actually influence any major decisions other than being reluctant to purchase another rental unless it’s an absolute lay up.
This post was edited on 9/28/25 at 11:37 am
Posted on 9/29/25 at 8:47 am to SloaneRanger
quote:
No idea what will happen, but it won’t be like 2008. You’re not going to have the mass mortgage defaults and foreclosures. I think that aspect of it got cleaned up pretty well.
We could end up in a somewhat similar situation with a different root cause. I agree that they cleaned up giving loans too generously, but if many don't get their spending under control, we could see significant defaults. Medical costs, generally high inflation (it is much higher than reported), coupled with too many high credit balances will lead to a lot of mortgage defaults. There are reasons for concern.
Posted on 9/29/25 at 9:02 am to SloaneRanger
quote:
You’re not going to have the mass mortgage defaults and foreclosures. I think that aspect of it got cleaned up pretty well.
But the housing market is way out of whack. The unaffordability is right in our faces.
Posted on 9/29/25 at 9:27 am to member12
The wording on my post is wrong. I meant to say, "Stay put until it is over".
If you don't have to move, stay put. Any time you sell a house to collect your profits, you will have to put those profits into your next house. I sold with the intention of renting for a year to figure out where we wanted to live in our new town of Vero Beach. We also felt like the market was trending downward, and the Zillow value on our old house is down $70K since last year.
We plan to buy in Vero, but we're going to let the market sort itself out a bit more. New home builders are offering some pretty good discounts, so they are starting to feel the pressure to sell more houses. We're just looking for a good deal, and think it might be another 6 months away. Right now, we are seeing the same houses on the market that were there 3-4 months ago at the same price they were 3-4 months ago. The only ones selling are the ones where the owner has figured out that the market has gone down and have priced accordingly.
If you don't have to move, stay put. Any time you sell a house to collect your profits, you will have to put those profits into your next house. I sold with the intention of renting for a year to figure out where we wanted to live in our new town of Vero Beach. We also felt like the market was trending downward, and the Zillow value on our old house is down $70K since last year.
We plan to buy in Vero, but we're going to let the market sort itself out a bit more. New home builders are offering some pretty good discounts, so they are starting to feel the pressure to sell more houses. We're just looking for a good deal, and think it might be another 6 months away. Right now, we are seeing the same houses on the market that were there 3-4 months ago at the same price they were 3-4 months ago. The only ones selling are the ones where the owner has figured out that the market has gone down and have priced accordingly.
Posted on 9/29/25 at 11:47 am to Jax-Tiger
We're doing the same thing as you in Charleston, it's just that our market is slower to slow and decline than yours. We've been "waiting it out" and renting for 2.5 years now but the signs are there that maybe in the next year we'll be able to get what we want for the price we're willing to pay.
Posted on 9/29/25 at 12:09 pm to member12
quote:The GFC in many ways was actually CAUSED by the housing situation. Presently, we have almost zero conditions matching those. There's plenty of equity in the system...not to mention an actual shortage of housing.
Housing in the most volatile local economies appear to be experiencing declines in values - Las Vegas and parts of Florida in particular. The exact locations that started to falter as early as summer 2006. A nationwide decline in RE values followed and hit by 2008.
Posted on 9/29/25 at 12:24 pm to Chucktown_Badger
quote:
signs are there that maybe in the next year we'll be able to get what we want for the price we're willing to pay.
Hopefully, it works out for you. Sounds like your timing is pretty good.
Short of buying a fixer upper, the only way I can see where you take advantage of housing prices is to sell in an area that has not seen a decline in prices and buy in an area where the house prices are depressed, OR sell and wait for the market to turn down before buying again, which is what we are doing.
Selling and then buying in the same area with the same market values doesn't gain you much, unless you just happen to find a great price.
Posted on 9/29/25 at 1:58 pm to member12
The bones for a housing crash like we saw with the GFC aren't there. Home prices are still inflated and rates are high (combining to make prices even higher) but Bobby and Mary Sue aren't buying a $400k home on their household income of $60k due to creative accounting by lenders pushed to increase sub-prime loans.
That big push for sub-primes at any cost was the cause of the GFC, this time homes are going to just be a symptom as the big issue this time around is debt load and GDP debt dependency.
That big push for sub-primes at any cost was the cause of the GFC, this time homes are going to just be a symptom as the big issue this time around is debt load and GDP debt dependency.
Posted on 9/29/25 at 6:13 pm to Bard
The great financial crisis also was a world-wide event that was triggered a year before it even hit the United States. We do not have world-wide economic crisis right now.
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