House prices post-COVID-19?

[Snydley]

Having a good job and a good income does not mean you are good with money. In fact, just the opposite is often true. These people often figure they can spend freely because they make plenty and their jobs are safe and recession-proof. I'm sure a lot of them are having a very rude awakening right about now and I can't say I have a lot of sympathy for them as they go home to their McMansions driving their leased BMWs while I sit comfortably in my paid off modest home with my 14-year-old Camry in the driveway and a large cash reserve and million dollar portfolio (barely at this point but I think it's still hanging on to 6 zeros).

If being out of work for a couple of weeks requires you to sell your house, you just might want to reevaluate your financial situation.

Amen to all of this. To me, the people with the large incomes and no savings are the most pathetic by far.

[Nutria]

These people often figure they can spend freely because they make plenty and their jobs are safe and recession-proof.

Even without the pandemic, changes are coming to the healthcare system. And what if you have to go on permanent disability... are doctors' insurance policies that comprehensive?

[~bs]

Having a good job and a good income does not mean you are good with money. In fact, just the opposite is often true. These people often figure they can spend freely because they make plenty and their jobs are safe and recession-proof. I'm sure a lot of them are having a very rude awakening right about now and I can't say I have a lot of sympathy for them as they go home to their McMansions driving their leased BMWs while I sit comfortably in my paid off modest home with my 14-year-old Camry in the driveway and a large cash reserve and million dollar portfolio (barely at this point but I think it's still hanging on to 6 zeros).

If being out of work for a couple of weeks requires you to sell your house, you just might want to reevaluate your financial situation.

And it's not as easy as "reducing spending" either when times get tough. Many times they're locked into large longer term obligations, credit card debt, etc.

[LivingAlmostLarge]

But selling a house is drastic and fast. Usually that is the biggest drag but the hardest obligation to get out of. And usually the last to go.

[TexasHusker]

I have a couple of dental neighbors bringing in zero. Terrifying they said.

Texas why are high end homes going on? The docs still have jobs. They will make money. Medicine is recession proof. Why panic sell?

Many physicians these days have practices that are almost exclusively elective. Elective procedures are being highly discouraged right now. Dentists are shut down in Texas. I know of a dentist who lives quite a large lifestyle with multiple homes and a nice airplane. Right now he's not making a dime and I'm sure his diarrhea factor is running pretty high currently. If you are accustomed to burning through $30-40-50K a month and all the sudden the income stops, the car can start leaking oil pretty quickly.

[disneysteve]

If you are accustomed to burning through $30-40-50K a month and all the sudden the income stops, the car can start leaking oil pretty quickly.

Only if you haven't adequately saved for emergencies. It doesn't matter how much you earn. If you're spending 50K/month, you should have a 300-400K EF. How many of them do you think have that? I'm guessing very, very few.

There's nothing wrong with making a ton of money and spending a ton of money as long as you're still following basic personal finance principals. If you don't, then it won't matter how much money you make because you'll never out-earn your bad behavior.

[LivingAlmostLarge]

So TH and DS are both saying it's too easy to sink with that kind of money. But houses should be last thing to go up for sale. The boat, plane, and vacation homes before the houses right?

[disneysteve]

So TH and DS are both saying it's too easy to sink with that kind of money. But houses should be last thing to go up for sale. The boat, plane, and vacation homes before the houses right?

They may not own the boat and plane. They’re probably leased or shared ownership arrangements with contracts they can’t get out of. The house might be the easiest thing to liquidate.

[TexasHusker]

So TH and DS are both saying it's too easy to sink with that kind of money. But houses should be last thing to go up for sale. The boat, plane, and vacation homes before the houses right?

You can probably make a really good deal on a plane right about now...

[~bs]

if it floats, flies, or fornicates????

[LivingAlmostLarge]

if it floats, flies, or fornicates????

probably. I'm going to guess escort services are down but adult entertainment online is up i hear

[~bs]

probably. I'm going to guess escort services are down but adult entertainment online is up i hear

I remember reading a news article early on. In person "adult services" is really hurting due to this virus.

[Scallywag]

I don't know about PCPs but dentists are really struggling. My son had a procedure planned on March 19 and it was canceled. The dentist called on the evening of March 18 and she sounded almost hysterical. She said she was told by the dental association to cancel all procedures but emergencies due to risks associated with "oral cavity procedures & surgeries".

She has a beautiful office in a very nice high-end medial complex. I can only imagine how scared she is, even though ahe can always make up the money once she is able to reopen her practice & start doing the procedures again. Her "fees" are high but she was the only one who could actually handle my son so I didn't mind paying the premium.

Being middle class and not being able to afford a lot doesn't sound so bad to me anymore. The higher you fly, the harder you crash during the hard times.

[Scallywag]

I've been following this pandemic since the first case here in the US. As you all probably know, house prices right now are crazy especially here in LA. It's been all-time high and it just keeps going up. I think a decent single-detached house in a nice neighborhood closer to the city is at least $700,000 to $800,000!

We've been saving for a house. Currently, we have about $75k in cash for a down payment and we can save an additional $25k for the remaining of the year.

So the stock market went down around 35% last week from the all-time high. A lot of small businesses right now are struggling. A lot of people got laid off and 3.3 million filed for unemployment last I heard, but stimulus package got passed and should help people who lost their jobs. Plus we don't know the full extent of this virus in terms of peak and death rate.

So my prediction is that the pendulum will swing temporarily from a seller market to a buyer market. A lot of people who lost their jobs or struggling financially will be forced to sell their homes, a very small percentage of home-owners might die (sorry for being insensitive). so maybe 20% dip?

No one knows what will happen in the future but what's your prediction on real estate?

I am in Northern California and in a similar position. We're about 50K of the 100K downpayment we were aiming for and this might take about another 2 years, by when prices here might have increased again. Unless home prices remain stable or decrease, we don't plan to buy in CA. We ate considering moving to Texas or Tennessee in another 3 years and buy something there. Hopefully, prices in CA drops, but I am mentally preparing to move out of state. I'll miss California but I don't want to pay rent for the rest of my life.

[disneysteve]

Being middle class and not being able to afford a lot doesn't sound so bad to me anymore. The higher you fly, the harder you crash during the hard times.

I really don't think that's an accurate blanket statement. There are plenty of middle class folks who do the right thing, have an EF, and prepare themselves for rough times. There are plenty of middle class folks who live above their means, put on a good show, and hardly have a penny to their name. And the very same is true for high earners. Some do it responsibly. Some don't. Ultimately, it doesn't matter how much you earn. It only matters how you handle it.