[wil421]

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale.

I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

[JPKab]

Keep in mind that you'll see a corresponding increase in rents as more buyers in a given area hold off on buying. The demand ends up just shifting. That's been the effect in Boulder, CO.

It all comes down to this: If you are looking at housing as an investment, you are buying into a decades long market aberration driven by super low interest rates and government policies.

Otherwise, if you look at it in terms of the specific supply and demand curve in your geographic area, you can better steer your decision making. My area (northwest of Denver, CO near Boulder) has local government policies which have seriously constrained housing supply. That made me choose to buy despite a less favorable macroeconomic landscape to home ownership.

[gnicholas]

In Palo Alto, we have been seeing softening real estate prices for a month or two. My guess is that sellers are concerned that tech stocks will tank (as they have) and that potential buyers will dry up. I am personally waiting on the sidelines to trade up because I'd rather sell for less and buy for less in order to lock in the lower property tax rates. Most realtors I've spoken with seem to think a pause/dip in Palo Alto area real estate is inevitable in the next 6-12 months, and we're starting to see it already.

[rootusrootus]

Lots of factors in play, you'd need to bet correctly that the recession will actually affect prices that way in your area.

Also, the yield curves just inverted within the last week, and the average time-to-recession from that point is 12 months. So you may want to wait longer than a year.

Or... just buy something and be done with it, as long as it fits your budget and your income is stable, it's just housing and in the long run it'll probably work out fine anyway. Timing the housing market isn't any easier than timing the stock market.

[nemo44x]

There was a slight inversion but it wasn't on 2-year and 10-year. The recession indicator is from when the 2 and 10-year yield inverts and yes, it's about a year lag.

[rootusrootus]

My bad, I thought 2/10 had inverted earlier this week. Maybe it was just for a short time during the day. Still, they are very close right now.

[TACIXAT]

Interest rates rising will lower prices a bit (in the end, a buyer taking out a loan will likely be paying the same, because what ever drops in house prices goes to the bank in interest). I dropped my home's price (undesirable neighborhood) pretty aggressively in the last 6 months before hiring a property manager to rent it out. I would recommend just keeping your eye out for deals. Right now is off peak season (in the US) so you might find someone desperate and get a bargain.

[mortivore]

This is where I am right now. On the one hand, waiting allows me to save up more, and put more thought into where exactly I'm buying. On the other hand, waiting for a recession to buy is timing the market which is notoriously difficult to do.

If your area is already a buyers market, then you should just go ahead, and buy some place you like.

[dawnerd]

Depends on the area. Like here in Portland prices were already way lower than surrounding areas so prices have increased a lot over the last couple years. It's been a shock to people that are in their little bubble and don't realize it's still cheaper than Seattle, SF, LA.

[neaden]

If people here really knew whether or not that was a good idea we would be billionaire rock-star investors. Trying to time the market is a fools errand for most folks.

[FooHentai]

I was gonna say similar, and fall back on the old 'Market can remain irrational longer than you can remain solvent' trope :)

If you really want a safe(r) hedge in this situation, one option is to buy the cheapest property you can live with. That way:

- You're off the rental ladder - Are building up an asset with mortgage payments - Are in as shallow as possible if an event occurs that puts your ability to service the morgage in jeopardy - Are out less if you do lose the property - Can make a jump to a more expensive/nicer property in due time if market conditions allow - BUT potentially miss out on capital gains/leverage as a lower cost property will increase, in real terms, less value if property prices rise.

If you're risk averse (I am) it weighs up as a good option. But you miss out on significant potential rewards (not living in as nice a place, not reaping as much capital gains, longer commute or lower wages in the area). Such is gambling.

[rubyn00bie]

My Econ game isn't as strong as it used to be, and this is by no means financial advice, just some spitballing...

I'd guess interest rates will rise, hopefully not like they did in the 80s, but I think Trump has been running the economy too hot... meaning inflation and your payments will go up. We want people to save (invest) not spend (consume) to fix this upcoming case (if I understand it correctly). As a result, I doubt lending will freeze since interest rates are likely to rise so getting a loan really shouldn't be too difficult if you've got good credit and a downpayment...

To be honest, I'd say it likely won't matter as recessions of some kind are fairly common and generally relatively benign with even moderately good economic policies. I highly doubt we'll see anything like the 2008 recession...

/shrug

[SubiculumCode]

Historical, but I do not see an upward swing in inflation. https://inflationdata.com/Inflation/Inflation_Rate/CurrentIn...