How much do you think the stock market dive will affect the real estate market. I mean other than the banks and lending. How many people do you thing have lost a portion of their down payments. How many people are scared as their 401ks melt away? I've heard different opinions from realtors but most of them are trying to blow smoke up my arse, so their opinions don't carry much weight with me. I think the market troubles will take at least 10% of the potential buyers out of the picture. I think those buyers will be primarily the older buyers and the high end buyers though. I think the economy and job losses, or fear of job losses will take more buyers out of the picture in the near future.
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A lot of people I work with are depressed. Their 401Ks have been hammered. I had been telling a bunch of them that they should pull their money out of stocks, but they retorted with the investment advice of the puppet masters, "I'm in it for the long haul." Okeee-dokeee. And a few of those guys easily had over $1M in their accounts. The two that listened are smiling, but they understand we've still got a rocky road, ahead.
I think you're right about older buyers, and higher end homes. We need to buy a house (moved to the area a year ago and have been waiting to get past at least the steepest price drops) and the economy isn't changing our plans too much. Mostly because we are young and don't have our "house buying" money in the market.
What the market has changed is the amount of the loan we can qualify for. Which is why I think anything still over 450k or so is really sitting there - who wants to (or can) get a loan for half million dollars in this economy??
My wife works with a guy that has already lost over 2 million in the market! I pulled everything we had in our 401ks and put it into fixed accounts early this year. We don't have a lot but I sure don't want to lose any of it. Fortunately we only had some minor losses on my wife's account.
The market and the economy have changed my target price. Earlier this year I would have looked at anything up to around $700k. No more, I'm in the defense industry and I know what happens to those jobs when the government has no money (or when Democrats run things). So I have dropped our target price to one where we could possibly squeak by with just one income.
the stock market dive has a big effect in real estate market..many people are now afraid to invest, not only in this business but also in investing on other products and services.
Hmm let's look at the numbers
70% of the economy depends on J6P buying stuff. If you remove all the junk he does not need to buy because his credit cards are revoked. That makes up what?????? 25-40% of the jobs we don't need.
Think it can't happen. Name 1 item you can't buy in at least 5 stores nearby. Too much redundant retail space.
J6P can't pay rent much less a mortgage. Knife catching investors go belly up when J6P renters stop paying rent.
The whole bottom half of the market goes into the abyss. Cash becomes the media of exchange for more than half the market.
Rich folks can hold out but that does not mean much. Banks won't touch anything in the lower 2/3rd's
Only GSE's will throw money out to an ever decreasing pool of employed borrowers, while vultures pick up the churn at auctions.
Only thing that can stop that is if VISA MC Discover get owned by the Gov. Maybe they will just hand those card companies over to the Social Security administration.
Social Security...it's everything you want it to be!!!!!!!!
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