Inflation or deflation & your finances

[Scallywag]

Many countries give out UBI that is more than what our government is coughing up right now and you don't see their currency gone haywire.

Sorry, apples to oranges. Many countries also use a gold standard and tax at much higher rates than the United States and its the tax money being refunded / put to work, not newly printed currency. They don't bail corporations out and bolster liquidity challenged banks & hedge funds by printing 500 million dollars and pumping it into the repo markets!

[disneysteve]

Many countries also use a gold standard

No country has been on a gold standard since 1914.

[Scallywag]

No country has been on a gold standard since 1914.

Mongolia's currency is backed by its vast gold reserves as is Lebanon's even if they are not technically on a "gold standard".

[Singuy]

Welp, better start investing into things of value.

Bullets, batteries, pasta, rice and beans. So when the house of your dream becomes 50 million dollars, you can get that money by selling your stash.

[Scallywag]

Welp, better start investing into things of value.

Bullets, batteries, pasta, rice and beans. So when the house of your dream becomes 50 million dollars, you can get that money by selling your stash.

Is that how you plan to buy things you dream of?

[Singuy]

Is that how you plan to buy things you dream of?

Obviously I don't think we are the next Venezuela just from a few months of free money but you do you.

[scfr]

I understand your anxiety and frustration.
My suggestion is to focus on what you can control, clarify your priorities, and develop some alternative plans.
Is housing expensive where you live now? Do you have to stay there? Could you relocate to a lower-cost location now, or in retirement? Could you go for a smaller house? Condo or townhome?
How far away are you from a 20% down payment right now? What can you do to get yourself there faster, if buying a house is your number one priority?

I'm on the sidelines of the housing market right now. We had been under contract to buy a house but the deal fell through shortly before the COVID19 crisis hit (compeltely unrelated). Our lease just came due and we decided to renew for 10 months. We're betting that the market in our area will soften for the kind of house we're looking for (slightly above median price), so we're going to try to be patient and wait until winter (unless we find a terrific deal in the mean time ... we're keeping our options open). We may even decide to go for a bit "more" (not necessarily larger but maybe higher quality or better location) house if we can find a good deal on something better at our original price point. But I do think there will be more competition for lower-priced houses, so there may be price inflation on starter homes. And because new home construction ground to a halt in our area, and some home builders may go under, it's possible that the price of brand new construction will increase. And be prepared that rents might increase in some areas if people stop buying and demand for rentals increase.

Of course I could be completely wrong. I'm no expert. I'm just someone who has bought and sold 3 personal properties in my lifetime and spends a ridiculous amount of time looking at the local market. And I'm also someone who has followed some "alternative" routes (first a condo instead of single family home, and later relocating).

[~bs]

Take out prices haven't changed a bit around here. Same prices as always. If anything, prices are effectively up in some places because they haven't been sending out the coupons they normally send. The last ValuPak of coupons we got a week or so ago had zero restaurant coupons. It usually has about 10 or 12.

Your area probably not hit as hard. We went from lowest unemployment rate in the country to the highest. When you see normal household type goods, grocery, and takeout foods, etc start falling in price, you'll know it's really bad in your area. It basically means that the businesses are struggling enough and losing enough money to turn to desperate measures to try to drum up business and sell off stock that people aren't buying.

[disneysteve]

Your area probably not hit as hard. We went from lowest unemployment rate in the country to the highest. When you see normal household type goods, grocery, and takeout foods, etc start falling in price, you'll know it's really bad in your area. It basically means that the businesses are struggling enough and losing enough money to turn to desperate measures to try to drum up business and sell off stock that people aren't buying.

That makes sense.

I have now noticed a couple of places giving a flat discount of 10 or 20% on all orders, but it has been fine dining restaurants (most of which have closed), not places that normally do take out business.

[Scallywag]

I understand your anxiety and frustration.
My suggestion is to focus on what you can control, clarify your priorities, and develop some alternative plans.
Is housing expensive where you live now? Do you have to stay there? Could you relocate to a lower-cost location now, or in retirement? Could you go for a smaller house? Condo or townhome?
How far away are you from a 20% down payment right now? What can you do to get yourself there faster, if buying a house is your number one priority?

I'm on the sidelines of the housing market right now. We had been under contract to buy a house but the deal fell through shortly before the COVID19 crisis hit (compeltely unrelated). Our lease just came due and we decided to renew for 10 months. We're betting that the market in our area will soften for the kind of house we're looking for (slightly above median price), so we're going to try to be patient and wait until winter (unless we find a terrific deal in the mean time ... we're keeping our options open). We may even decide to go for a bit "more" (not necessarily larger but maybe higher quality or better location) house if we can find a good deal on something better at our original price point. But I do think there will be more competition for lower-priced houses, so there may be price inflation on starter homes. And because new home construction ground to a halt in our area, and some home builders may go under, it's possible that the price of brand new construction will increase. And be prepared that rents might increase in some areas if people stop buying and demand for rentals increase.

Of course I could be completely wrong. I'm no expert. I'm just someone who has bought and sold 3 personal properties in my lifetime and spends a ridiculous amount of time looking at the local market. And I'm also someone who has followed some "alternative" routes (first a condo instead of single family home, and later relocating).

I am nowhere close to the 20% downpayment for a home in my area (California). I really want to continue living here but may not be able to ever buy a house here so I have to move. We need a house (no shared walls) because my son has special needs, is very loud & hyper and needs a yard. My problem really is a job & income issue - my spouse works in a niche field and may not be able to find a job outside of this area. Plus he is older and not a good interviewer at all. All of this makes it impossible to move at this time. I would love to move to cheaper areas in Central California / TX / AZ, eventually, but housing is an issue we absolutely need to solve before he retires as I don't want a rent or mortgage payment in our 70s.

[~bs]

I am nowhere close to the 20% downpayment for a home in my area (California). I really want to continue living here but may not be able to ever buy a house here so I have to move. We need a house (no shared walls) because my son has special needs, is very loud & hyper and needs a yard. My problem really is a job & income issue - my spouse works in a niche field and may not be able to find a job outside of this area. Plus he is older and not a good interviewer at all. All of this makes it impossible to move at this time. I would love to move to cheaper areas in Central California / TX / AZ, eventually, but housing is an issue we absolutely need to solve before he retires as I don't want a rent or mortgage payment in our 70s.

Or you could just accept that your situation is better as a long term renter. Look for somewhere with low cost of living and you can get a decent job. Then focus on saving and investing, knowing you'll rent at market rates for the rest of your life.

[Scallywag]

Or you could just accept that your situation is better as a long term renter. Look for somewhere with low cost of living and you can get a decent job. Then focus on saving and investing, knowing you'll rent at market rates for the rest of your life.

is this sarcasm? Renting at market rates for life? Wow!

[kork13]

Or you could just accept that your situation is better as a long term renter. Look for somewhere with low cost of living and you can get a decent job. Then focus on saving and investing, knowing you'll rent at market rates for the rest of your life.

is this sarcasm? Renting at market rates for life? Wow!

Travel internationally much? In many countries, a HUGE number of people never, ever, even consider the possibility of purchasing a home. Often, it's because lending such as we have here in the U.S. (by which I mean offering outrageously high debt levels & putting people in debt up to/past their eyeballs) is totally inaccessible to many/most folks. You either inherit a home from your parents (or simply live with them), save up enough cash to buy a home outright, you build a little shanty out of cinder blocks/2x4's/corrugated aluminum, or you're renting. The belief that home ownership is some fundamental human right is a very (misguided) American viewpoint. Wait, I forgot one more option -- you move to the U.S./Canada where lending is far, far, far looser, and get into debt up to your eyeballs.

[Scallywag]

Travel internationally much? In many countries, a HUGE number of people never, ever, even consider the possibility of purchasing a home. Often, it's because lending such as we have here in the U.S. (by which I mean offering outrageously high debt levels & putting people in debt up to/past their eyeballs) is totally inaccessible to many/most folks. You either inherit a home from your parents (or simply live with them), save up enough cash to buy a home outright, you build a little shanty out of cinder blocks/2x4's/corrugated aluminum, or you're renting. The belief that home ownership is some fundamental human right is a very (misguided) American viewpoint. Wait, I forgot one more option -- you move to the U.S./Canada where lending is far, far, far looser, and get into debt up to your eyeballs.

Says the guy who owns rental properties! Preaching much, are you? I am sorry I even posted my info here as it seems like people just have to stamp down and kick people who are already down. Must give you people a high to feel so superior to people likw me that you just have to lash out & preach things you would never do yourselves ? I don't know if you believe in basic human kindness (obviously not) but apparently some of the posters here think it ok to put down someome who has the same dreams as they do but are in a bad place and venting here.

If you must hypocritically accuse me of "self entitlement" or patronizingly "advice" me to "rent at market rates for life" then why don't you wait until I ask you for down payment assistance? Until then if you have nothing nice to say maybe just don't say anything?

[LivingAlmostLarge]

Says the guy who owns rental properties! Preaching much, are you? I am sorry I even posted my info here as it seems like people just have to stamp down and kick people who are already down. Must give you people a high to feel so superior to people likw me that you just have to lash out & preach things you would never do yourselves ? I don't know if you believe in basic human kindness (obviously not) but apparently some of the posters here think it ok to put down someome who has the same dreams as they do but are in a bad place and venting here.

If you must hypocritically accuse me of "self entitlement" or patronizingly "advice" me to "rent at market rates for life" then why don't you wait until I ask you for down payment assistance? Until then if you have nothing nice to say maybe just don't say anything?

Scallywag, my first property was in San Diego CA in 2002. So I got it. I've never lived anywhere cheap. But I'm going to give you the same advice I give others who are in the same boat. You have to think outside the box. I think that something you can consider is buying a property in central coast CA, TX, AZ. Rent it out. Make that your retirement home with the goal of paying it off by the time you retire. You can't buy where you live. Okay. Well what can you do? You can't move, is your husband working from now? Is he able to work remotely? That would make moving now a possibility.

My DH was offered a letter saying "would you be interested in working 100% remotely and taking a commesurate paycut?" Our answer no. We like where we live. But i can say that I bet more than a few people actively consider it. I certainly would if I were from somewhere else and could have family help and it's cheaper. I would think long and hard.

So I think consider where do you want to retire? What is stopping you from working remotely? If that is absolutely not an option, how long until your son graduates from school? Then consider buying now and having renters and be secure in the knowledge that you are "in the market" somewhere. Maybe not california but you are getting the homeownership benefit and planning for the future.

Also you can consider buying a smaller place where you live a condo maybe 1-2 bedroom and renting it out. Then renting a house if that's what it sounds like you need. Or what about buying a duplex and living in half and half is rented? I mean sort of hard to kick out the OWNER! Sometimes being flexible is key. Also if your husband were to be laid off what would you do? Stay, Move?

I have advised multiple clients mostly single people who are in 50s to buy something where they want to retire. It's a little late to buy in a HCOLA but you can still perhaps come out ahead somewhere like AZ and buy a house and prepare to pay it off by the time you retire. Good luck! I think that sometimes you have to think outside the box.