How would Building physical equity in a house help one in a down market?
Equity is fairly liquid. You can borrow against it, or sell and downsize. I for one wouldn’t advise putting it in the market instead with the dems likely to win the Presidency in 2020 and probably giving us one of the biggest tax increases in history as a result.
Fair enough.
I have also never met a 1%er that waits until a windfall to make home improvements.
Being able to not worry about money is a feature of the 1%.
But all people are different
Who said i was a one percenter? Not me. It just isn’t true that only the one percent got a significant tax cut.
To clarify, yes I am in the one percent in earnings but not by net worth, not by a long shot.
You did… right here
Thought I just cleared that up for you with the above post…
Okay… not a one percenter.
gotcha
Depends on how you measure it. What led me to believe you were talking about net worth instead of income was your assertion one percenters don’t wait for a windfall to invest in home equity which is true while it is not true of one percenters in income.
So now you are?
Okay… whatever definition feels best for the given situation.
If I think we’re talking about income, I use that measure, if I think we’re talking about net worth, I’ll use that one. Why is that a problem? Because you thought you caught me in a lie when you didn’t?
Hey… I know 1%ers.
They don’t have to parse out definitions.
But whatever definition suits the situation is fine.
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The flip side was buying a house when interest rates were sky high, which brought prices way down. As interest rates dropped, you could refinance at a reasonable rate, keep your low purchase price and end up where your aunt and uncle did.
Lot’s of ways to work with the cards being dealt.
In a downturn? This makes no sense. Home sales and home values decrease in a downturn. It’s the opposite of liquid.
Sure they might go down a bit but it’s usually area specific, houses here didn’t lose much value during the last recession and that was a real estate heavy recession, ie housing bubble. So I don’t imagine it would go down more than I invested.
Housing Won’t Be the Problem
According to the 2019 Zillow Home Price Expectations Survey released June 5, 50% of the surveyed economists, investment strategists and housing market analysts believe the next recession will begin in 2020, with 19% predicting it will begin in the third quarter.
Experts surveyed point to trade policy as the most likely cause of the next recession, followed by a stock market correction and geopolitical crisis – all of which would be a far cry from the lax lending policies and financial liquidity issues that contributed to the Great Recession.
“If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to come out of the recession,” says Mark Fleming, chief economist for title insurance company First American Financial Corporation.
As Fleming notes, the housing market has traditionally aided the economy in recovering from a recession, as consumers who are less effected by the downturn are willing to buy and sell, and existing homeowners are able to take advantage of equity in their properties.
In the midst of a recession where subprime mortgages are not a significant factor – as experts predict they wouldn’t be in the next downturn – it’s reasonable to expect homeowners to stay where they are while things are uncertain and wait to move when they feel more confident, which can help get other parts of the economy moving.
So yeah, I’d rather be invested in real estate than the market at this point. And I’m investing about half of what my equity gain will be, so even if it dips a bit, I’ll be fine.
I read somewhere he sent 3 spending cuts to Congress since getting elected.
Anyone else remember how everyone blamed greenspan for causing the last recession with low interest rates and lack of regulation?
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Not so much causing but not being given enough leeway to get out of it quickly due to deflated interest rates but yup def.
Low interest rates for an extended time was one of the causes… and there were a lot of causes so it is impossible to point to one thing.
By keeping rates low, the Fed basically pushed “safe” investing out of T-Bills and into the AAA rated pieces of crap mortgage backed securities that were being sold by the big banks, thus creating more of a market for them and thus increasing demand which led to crappier and crappier AAA rated securities to be created… and so forth.
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Cheap debt fueled more speculative investing
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