This is a warning to any youngster thinking of buying a home now. Don’t listen to the older generation telling you home is always a good buy (it was for them, it won’t be for you buying at these ATH prices). Hold off 2 years (mid 2024) and buy a better home.
How will this play out? As a guy that’s been around the dotcom and the housing crash, it’s the same pattern.
- X – People bragging at social events about their great investments
- X – People that follow the investment advice
- X – Market goes up for a while to get the rest in
- X – People are buying homes not for the use, but for the ROI
- X – Stock market starts to destabilize
- X – Hiring freezes start
- Smaller companies don’t get funding, they need to close
- Black Swan Event. Something breaks. Some company bankrupts.
- Ok, worst is behind us, stock market goes up a bit.
- Layoffs begin
- Government acts like they are stepping in
- Stock market has a complete meltdown enough that main stream media talks about it all day, week, months
- Housing will be ok right? I think a recession is here?
- People start defaulting on their housing payments.
- Home investors start selling their extra homes
- Home prices start to fall and everyone starts heading for the exit.
During these 2 years, buy $SH + $PSQ and go on a vacation.
Come back, buy a home, get a job. Resume life.
Homes are still at all time highs, but once people start exiting, people will start dumping their extra rental / airbnb homes.
- Rates are higher so people can afford less
- Once people start getting laid off, they won’t be able to pay for the exorbitant monthly payments
- and yes, layoffs are coming. Demand slows, stocks fall, company needs to get leaner so they layoff.
- Let’s not forget many companies are allowing their workers to work at home or in other offices now.
- Was the massive buying caused by foreign investors or tech folks? Doesn’t matter, both have taken a significant hit in the last year. Let’s also not forget how strong the USD is.
Be patient, rent is expensive, but it’s a small fraction of what you’ll lose to buying now.