Predict how when & how far Real Estate drops

Eastern TN is a great market to be in. We've looked at relocating there as well from the DC Metro. Only 5hrs from DC and decidedly red with lower taxes, no long term cap gains. I'd love to relocate there as I prepare to sell my company. Can't, but which I could.

 

1 month later…. Dow still at 31K

 

So you're 100% back in equities then, I take it? I'm no financial expert, just one in the peanut gallery. I've only ever been any good at one thing and it isn't investing. I just listen to as many experts as I can because soon here I'll be selling my company and will need to be really damned careful what i do with the proceeds. I wouldn't listen to my advice either, actually wasn't any advice in my post, just a serious distrust of the markets which I still have and will continue to have until they've fully revalued. FWIW tho, you're cherry picking the last month while the entire world is in convulsions so I've posted the YTD here below. It's been an orderly decline, but a massive one. Eventually the herd is going to get spooked and there will be an elevator event. What's the current market cap to GDP? It's high, really, really high. I sold off my IRAs and put my 401k in money market Q1 this year and I'm damned glad I did, even with the penalty for cashing in the IRAs I'm way ahead. I'll keep listening to my guys. You keep listening to your guys.
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Stock market gains since 2008 are in line with the rate of monetary expansion. The money supply has been growing at around 7% a year since then as has the S&P. All the pundits said don’t fight the Fed and if you listened you did well. Just like you can’t fight the Fed on the upside you can’t do it on the downside either.
The bull trend has broken and with the Fed raising rates and reducing their balance sheet to combat inflation it’s going to hit all asset prices. The question becomes how aggressive will they get in slowing down inflation and negatively impacting the economy before pivoting and lowering rates and start printing money again.
As of now, during monetary tightening conditions market rallies should be sold instead of weakness being bought. I’m not calling for some apocalyptic crash but we’re going lower from here and the market will likely go back to the pre Covid highs as the Fed unwinds 18 months of money printing.



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Back 100% equities? I’ve never been 100% equities therefore not following the use of the word “back”.

YTD chart? Why is YTD and indicator of what’s going to happen tomorrow?

I don’t know what rate your IRAs are taxed of what the cost basis for them is but if they’re 10+ years old I wouldn’t believe you’re “way ahead” for selling. The market may be down YTD but it’s way way way up since 2009.

Is Apple part of the U.S. GDP?

The only guy I listen to is me. A lot of my decision making comes from questioning people who think they can call the highs and lows. Doing the opposite of what the “herd” is doing has always served me well.

 

That's where I'm trying to get. I'm also not following the herd. Doesn't mean I'm making great decisions on my own. I would actually probably listen if you posted something other than criticism. For the time being, I'm staying ZERO percent in equities. I'm selling my company, staying cash on the sidelines and waiting. Looking at probably getting into beachfront vacation rentals once that market corrects.

 

I wasn’t criticizing. I’m prodding. You made a prediction on the forum so I’m asking how you feel about it one month later as the market is nowhere near where you predicted.

You’re still so certain of doom and gloom yet someone is buying your company. That wasn’t a concept in in 1999 or 2009 before the market crashed.

I know a lot of people that talk like you do. You’re definitely in the “herd” majority. Most folks saying they are sitting on the sidelines with their cash waiting for this eminent crash.

Asking questions like this help me decide what to do. I’m not being rude. I have no idea what will happen tomorrow. I’m just trying to gauge perception.

 

More parroting the experts I tend to believe than predicting anything myself. I have no idea what'll happen tomorrow any more than you do. That an elevator event hasn't happened in the last 30 days doesn't mean it won't happen in the next 30. If the herd was as risk averse as I am, it would have happened by now. Eventually the herd will spook and it will happen. I don't know when, but I'm convinced it will.

My company is an easy sell because it's cleared cyber in the Fed space with all brand new contracts. I have my reasons. After a quarter century, I need my chips off the table. But not exactly the kind of company you'd track to know how main street is doing.

 

There are no “experts”. Many of the self professed “experts” been calling for the end of the world for a decade.

The herd spooked 6 months ago and has been spooked since. I live in Florida. Nothing is on the verge of dropping in price here. There’s no supply.

Still curious if you include Apple as part of US GDP

 

Couldn't tell ya. Don't care.

 

You’re the one quoting GDP numbers as a basis for your beliefs. Don’t want to talk about it anymore?

Futures are way up this morning.

 

I’m invested in vacation rentals in eastern TN. Yes, prices are falling some, but they’ve gone up 270% in three years.

Rents for good vacation homes are still strong, and demand continues to climb. With new builds slowing, nightly rents are trending higher due to more demand than availability.

 

Great investment. If I'd sold my company a couple years ago, I'd have bought a couple in Gatlinburg myself. We'll be in cash hopefully within six months and I'm reinvesting entirely in vacation rentals, though likely beach instead where prices only inflated 20-40% rather than 200%. It'll take time to get used to the new normal in pricing there in Eastern TN. If they come down some, I'd love to have something there as well.

 

there are still excellent buys. I just put a contract on one for $270K, that should do $40K a year or so after I spend $20K on it.

 

Hope you don't mind, would like to pick your brain once I'm in cash. Would that be okay?

 

of course. PM me your contact info. I’ve been investing and managing in the Smokies since 2005.

 

We are now officially below pre-pandemic highs. If you account for inflation, its a massive drop. GDP decreased 2 quarters in a row so we are in a recession. The fed does not plan to pivot anytime soon and won't until yield rates are above inflation rates. The market will continue to fall especially with what the fed as said. With commercial real estate I'm not sure how I feel... Should I keep buying as a hedge for inflation? Or am I buying at a wrong time and market will crash? Or just continue buying since its Time in the Market not Timing the market... Very weird position to do anything at the moment...

 

Real estate should not crash despite the interest rates at 7% and more, because there are simply not enough homes for sale + current owners are not at all in trouble (sound mortgages and payments) like during the crisis 15 years ago when everyone breathing could buy a home.

Going 100% with equity because I have cash to invest and now is a good time to start buying ETFs (no one knows where the bottom is but we are not far + we are so far from the top that there is plenty of room to go up once world events get better) + my current portfolio did not start at the top several months ago. Losing money now but good position overall.

 

Sniff. I don’t associate with those below the line. Lifting little pinky finger. If you can’t afford $25, well I don’t know what to say.


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Tough times my friend haha

 

Keep in mind that non-subscribed members don't know what's in the subscribed areas.

For those of you interested in topics like this, there's a Business and Investments section in Silver ($15 per year, not $25) and it has a LOT of smart people like Dale and professional stock traders that contribute.

One of the rules is that posts in subscribed areas stay in subscribed areas. So, I can't share all that goes on in there (like a guy that turned a nuclear missile silo into a house) but it's worth the $1.25 per month for the content in Silver Subscribed and Business and Investments (included in Silver).

 

I actually had no idea.

Now Ill be subscribing.

 

That guy is completely crazy, but in a good way. That thread is worth taking your subscription level up, up, up!

All the best,
Andrew.

 

Lol, that’s really hilarious.

 

Well...that's what's supposed to happen. Me, I got a full refund because a few mods here couldn't help themselves taking a Rossa discussion to Silver or P&R following me around with a chip on. Damn shame.

WRT topic, last time I stopped in on this thread, we were still at the top of the bubble for the short term rental real estate I'm looking at investing in as I sell my company in the coming months. The beach front and mountain RE I'm tracking has rolled over 10-15% since in the last few months. I'll probably sit in short term treasuries for the next year or so, talking to UBS next week about a plan, until RE bottoms.

No guess where that'll be but we're just rolling over now. We'll see how things look next summer earliest.