Is it time to predict the next crash yet? (insert shrug emote)

By
Real Estate Agent with Utah Homes 9334967-SA00

People love to speculate.

What's the new fall color? Who's the new "it" person? It girl. It guy. It singer? OK, we're less interested in the I.T. guy. (I know this. I've been one.)

We speculate on taste, trends and we really love to predict the next financial disaster. Don't believe me? Google these things. Or don't. I've done it for you.

 

"When is the next recession?" 57,000,000 results

 

"When is the next housing crash?" 67,700,000 results

 

"When is the next financial crash?" 174,000,000 results

 

That's millions of results. Not 57 or 67 or 174 people posting a million times each.

So if we're so interested in the topic, let's try to set some rationale regarding this fascination.

1) We've been doing so well for so long that it just seems like the low has to follow the high. Let's take a look at stocks. The bull market is nine years old. This is a record. If what goes up must come down, it has to come down. And it sort of has. A little bit (percentage wise). Still, you'll find quite a few people who say we're on borrowed time and quite a few others who will disagree.

2) Home prices have been going up up and away. But some may wonder if, like the song says, if it's in a beautiful balloon. We had a bubble before and it t was so ugly. If it were to happen again, where would it be and how severe could it be? One good place to check is the historical record. If history repeats itself, it might be nice to know what it looked like last time. Here's a helpful graphic by the helpful humans at My Money Blog who used data from Core Logic and the Washington Post.

peak to trough

It's Halloween time. It's ok to scream. That was a frightening time and I wouldn't blame you if you don't want to go through that again. The upside? Homes became more affordable for a brief window in time and the prices went back up again. In most cases they are higher now than they were before.

Moral of the story. We will always have peaks and valleys. As long as you can afford the home you are looking for, you are probably going to be fine. Just put the blinders on a bit through the valley. Think of your house less as an investment and more as a home. And, if history does repeat itself, your investment will be made good by time.

Also, if you're interested in knowing why purchasing is a great investment, read my blog post "Investment Mystery Solved- After 16 Country, 150 Year Investigation."

 

---

Chuck Willman is a real estate agent, investor, and speculator based out of the very beautiful state of Utah. 

Photo by Collins Lesulie on Unsplash

 

Comments (10)

Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Chuck

This kind of question has been bandied about since Time immemorial!  In every economy, there are those who thrive and those who don't.  A

Oct 17, 2018 08:26 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Ron and Alexandra Seigel - So true. I also wonder if it's become a clickbait topic. It seems I can't go a day without seeing some speculation about a downturn. It's very Chicken Little.

Chicken Little

Oct 17, 2018 08:44 AM
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Why does there even need to be another crash, haha.  I don't think we will ever see another crash like we did in the late 2000's.

Oct 17, 2018 10:00 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Chuck - that is interesting food for thought.  Time always tells.

Oct 17, 2018 10:18 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Brian England - Who wants a crash? (except investors. they love those.)  It stands to reason that markets could continue to improve, unimpeded. After all, prices do tend to go up over time on almost everything. Some would say the market actually should be artificially impeded (inflation worries and other factors are behind the Fed's willingness to continue to raise rates.)

I also hope we never see a market correction like the last one. Unfortunately, some of the symptoms of the last crash have not been fully corrected. I too though feel that we probably shouldn't see a repeat of the last one. There's enough that has been corrected to hopefully prevent the magnitude of the next correction.

Oct 17, 2018 10:33 AM
Chuck Willman UtahHomes.me

I agree. I'll get a little nervous though if we start to see more "liar loans" in which investors will trust anyone in order to acquire the loan. It would be crazy for such a thing to happen again. By the way, I am seeing a few of those come back, but not anywhere in the quantity as before.

Oct 17, 2018 11:39 AM
Brian England

I think it isn't likely to crash mainly because people are in good loans nowdays.

Oct 17, 2018 10:40 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Grant Schneider - until we get that time machine the books and movies have promised us we'll all just have to guess.s

Oct 17, 2018 10:34 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I can't speculate but, I do agree with your observations. What goes up, must come down but, how much & when will be the eternal question! There are those who thrive in downturns and, I for one, will strive to be one of those again!!

Happy Monday!

Oct 22, 2018 10:37 PM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Debe Maxwell, CRS - the ups and downs seem to be less of a roller coaster as we are coasting through an extremely long financial uptick. I too hope to be ready for any change this time.

Oct 23, 2018 05:33 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

The latest news is a mixed bag on this. We now have several months in a row of diminished growth. This would seem to indicate that pricing may have peaked for the time being. It's anyone's guess if this leads to a general slow down or something more than that.

Nov 03, 2018 08:25 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

it may happen soon enough but it might be a mid-level crisis rather than 2007. I think we might be a little more okay.

Dec 20, 2018 10:43 PM

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?