re: Should I Sell My House Now and Bet on Economy and Housing Market Crash?

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It’s basic supply and demand, and supply is like 4 million short of demand.

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Where did that demand come from? Are those factors still at play?

I'm selling before there are no buyers left.

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People understand what happens when assets increase to insane valuations due to temporary factors when the price of that asset is set along a 30-year timeframe.

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This is supply and demand at work. RE was at all time highs in 2018, 2019, 2020, and 2021 as well. Inventory is all that maters right now. Rates are still very low. 5% is a very low rate historically. This is not 'temporary'. There has been a clear pattern on housing prices for years now. You have Millennials and Gen Z entering the market en masse now after being perpetual renters/living in their parents basement for longer than normal. You have Baby Boomers who are selling their 5,000 sqft homes in the suburbs that they raised their families in who are downsizing and paying cash for whatever they want sometimes two properties one to live in and one for a vacation home. These same Boomers have access to Trillions in 401k and IRA monies they are using to buy these homes and some are also 'gifting' large lump down payments to their children to help them buy homes as well. This is where the low inventory comes into play. Simply wishcasting for a 'crash' isn't going to get you anywhere. Experts are saying Inventory won't be solved until 2 or 3 more years. Good luck trying to time this market. The same people who tried this 2 years ago have simply priced themselves out of a home at this point and are stuck renting at exorbitant prices.

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We are already seeing RE markets across the country change due to interest rates rising, so trying to tie these hyper-inflated valuations simply to inventory isn't really being borne out by the data.

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How many people in this thread constructed a DCF and pulled comps when they choose the house they currently reside in? I'm guessing 95% of the purchase transactions in 2022 are made by a woman trying to raise a family. Not a financially savvy borrower looking for a good return.

"Hyper-inflated" when inventory is at like a 3 decades low with inelastic demand

ETA: Oh boy, you're muh Fedding in this thread

You posted this earlier:

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although I don't understand fully where this population has arrived from if we're talking about citizen-based demand)

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The demand is from Millennials and Gen z many of which have high paying jobs in Tech and other sectors now are comfortable entering the housing market. Also, Millennials in particular have Boomer parents that are willing to tap into retirement savings which they can now do penalty free and give their precious Baby Huey children huge lump sum down payments for a home that makes it more affordable and much easier to manage a mortgage even if not a 'high earner'. Think how much home you could afford if someone was giving you the whole 20% down payment and you could keep all of your money. That is a tremendous help and right now isn't uncommon. I'm not saying everyone is getting money from their parents but a good % are.

You seem fixated on 2008/2009 repeating itself. That isn't likely to happen. Sure, prices can level off or even correct 8%-10% but that isn't going to solve the Inventory problem. We are literally in a inventory crisis in most large cities in this country. Prices in Charleston SC dropping 10% isn't indicative of anything and has nothing to do with what is happening in large metro areas like Atlanta, Dallas, Nashville, Orlando, etc. Do you understand this?

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And if 5% can't sustain our housing market, what does that say about our economy post-2009 crash?

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5% rates hasn't crashed it yet has it?

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Yeah at the artificial demand rates with negative interest rates from the fed. When demand lowers, the necessary supply won't need to be as high and that problem is solved. This is exactly why the fed is increasing interest rates (to solve inflation like in the housing market).

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There is an inventory crisis that has to be worked out for any of this to be true. There is tremendous demand from Millennials, Gen Z, and retiring Boomers who are downsizing or buying 'vacation' homes (or both)
Barring massive job losses this isn't going to change.

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It's weighing this potential cost v. the cost of a credit hit of bankruptcy or a foreclosure.

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You are stuck in 2008/2009. We had a 10 year supply of housing in 2009 in this country along with bad loans and a host of other issues that we don't have now. We have like a 2 month supply of housing in most major metro areas. 7 month supply is needed just to have not even a healthy market. For this to turn into a 'buyers market' we need much more than that. Most people don't stay in a home 30 years. Most stay anywhere from 9 to 13 years before moving on to something else. Housing market goes up and down. Always has always will and trying to 'time' it rarely works out well for anyone. There is no better hedge against rising inflation than home ownership. I feel sorry for all the suckers that are stuck renting now with landlords raising rents 20% this year and that won't stop they will raise them again significantly in 2023 as well. It would literally be better to own a condo, townhome, or home right now than rent. Literally anything is better then renting right now. And our gov't seems hellbent on making people permanent renters so that further illustrates how important it is to own vs rent right now. Nowhere have I said housing is going to keep going up to infinity and never come down but hoping, wishing, or thinking there is going to be some 2008/2009 type collapse isn't supported by any metric.

Wife and I are cashing out and leaving NOLA to rent for a while in different areas; couldn’t be happier about this decision.