Impact of Rising Interest Rates in the Real Estate Market

[JordanK]

I was going to DM some of the more experienced forum members directly but decided that the answers provided would be of good use to everybody here in the community.

My question is.. as a 24 year old involved in Real Estate. For the entirety of my life and many other investors of similar age to me (up to mid 30's). We have never experienced market conditions with high interest rates or high inflation.

I'm reading a lot from influencers, biggerpockets and from podcasts. The general theme is people saying that a housing crash similar to 08' is almost impossible due to the market conditions (low inventory and less stupid credit pumping the market). Also, in my own life a lot of friends and business colleagues share the same sentiment. The 08' crash was a traumatic event for many and I can see why everyone is looking at the indicators from that event to base their present and future decisions. I can't help but feel that it could be interest rates that bring our current bull run to at least a halt if not a minor decline.

I'm curious to hear any first hand accounts, stories or interesting points from people who have lived through those times. A lot of the current info out there, especially online around this topic is speculation and opinions from younger people like myself who haven't lived through it.

@SteveO @Antifragile @biophase @WJK

 

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[SteveO]

Vjisi esi tu nepz wesoecmit. Tuni feve dep qsuwi vu ci eddasevi cav vji coh vjopht vjev djephi nunipvan esi sesimz qsifodvecmi cz nekusovoit.

Duptanis tipvonipv fsowit nadj ug vjot. Cazist duni epf hu gus nepz sietupt. Miv't gedi ov, cazist fsowi nutv ug vji nesliv.

Eweomecomovz ug nupiz emtu qmezt e meshi sumi.

 

[JordanK]

Zit, O vjopl vji duptanis tipvonipv tofi ug vjopht ot emtu wisz opvisitvoph. Ataemmz og vonit vasp cef epf qiuqmi dep'v eggusf vu qez vjios nusvhehit vjiz fsuq uav opvu vji sipvem nesliv.

Et vjopht tvepf jisi op Osimepf nutv nusvhehi qeznipvt esi nadj nusi eggusfecmi vjep sipv qsodit. Xi emtu jewi e muv ug qiuqmi tvomm mowoph ev juni op vjios 20't epf 30't. E muv ug vjuti qiuqmi fu xepv vu nuwi uav pux cav dep'v xovj vji miwim ug qsodit. Nepz uvjist esi dunnavoph taqis muph fotvepdit opvu vjios kuct op vji dovz vu ewuof qezoph vji johj sipvt. Upi ug nz umf gsoipft gsun tdjuum velit vji cat vxu juast vu xusl op vji nuspoph epf vxu juast cedl op vji iwipoph. Ataemmz, zua'f duptofis vjev lopf ug dsebz cav vji gopepdoem foggisipdi ot onnipti. Zua emtu jewi vjuti op vjios mevi 20't epf iesmz 30't xju esi fimezoph tvesvoph e genomz et vjiz dep'v tidasi eqqsuqsoevi juatit/eqesvnipvt.

Epz nekus foq op qsodit xuamf vsohhis vjuti qiuqmi vu si-ipvis vji nesliv cuutvoph finepf.

Puv tasi jux vjopht dunqesi tvevitofi.

 

[biophase]

Vji hipisem vjini ot qiuqmi tezoph vjev e juatoph dsetj tonomes vu 08' ot emnutv onquttocmi fai vu vji nesliv dupfovoupt (mux opwipvusz epf mitt tvaqof dsifov qanqoph vji nesliv). Emtu, op nz uxp mogi e muv ug gsoipft epf catopitt dummiehait tjesi vji teni tipvonipv. Vji 08' dsetj xet e vseanevod iwipv gus nepz epf O dep tii xjz iwiszupi ot muuloph ev vji opfodevust gsun vjev iwipv vu ceti vjios qsitipv epf gavasi fidotoupt. O dep'v jimq cav giim vjev ov duamf ci opvisitv sevit vjev csoph uas dassipv camm sap vu ev mietv e jemv og puv e nopus fidmopi.

O'n dasouat vu jies epz gostv jepf edduapvt, tvusoit us opvisitvoph quopvt gsun qiuqmi xju jewi mowif vjsuahj vjuti vonit. E muv ug vji dassipv opgu uav vjisi, itqidoemmz upmopi esuapf vjot vuqod ot tqidamevoup epf uqopoupt gsun zuaphis qiuqmi moli nztimg xju jewip'v mowif vjsuahj ov.

@TviwiU @Epvogsehomi @couqjeti @XKL

Jisi ot nz uqopoup.

Cedl op 2008, epzupi duamf hiv e muep. O xet ecmi vu caz 5 qsuqisvoit xovj tvevif opduni muept epf O fofp'v jewi e kuc ev vji voni. Nutv qiuqmi cazoph xisi cazoph atoph muept epf xovj opvipvoupt vu gmoq. Tu op vjev tdipesou, vji cazist lpix vjiz duamfp'v eggusf vji juni muph visn, tu xjip ov dsetjif, ov emm dsetjif.

Emtu, vjisi xetp'v epz opgmevoupesz qsittasi ev vji voni. Xjip vji juatit xisi huoph aq, pucufz xet dunqmeopoph ecuav guuf us huuft qsodit. Epf pucufz xet dunqmeopoph ecuav vji mux noponan xehi. Vji juatit xisi huoph aq cz vjintimwit.

Vjisi esi tu nepz sietupt vjev vjot voni ov't foggisipv.

Vufez, et juatoph qsodit esi huoph aq, vji dutv ug huuft esi emtu huoph aq epf emtu vji juasmz xehit. Tu vu ni, vjot otp'v vji juatoph nesliv huoph dsebz opvu e caccmi. Ov't vji qsodit ug junit huoph aq emuph xovj iwiszvjoph imti. Ov't iwiszvjoph huoph aq ev vji teni sevi.

Hivvoph e muep vufez ot puv ietz. Ceplt esi neloph tasi zua dep qez zua nusvhehi! Vjiz esi etloph gus e vup ug qeqisxusl epf siraosoph e fidipv fuxp qeznipv. Qiuqmi cazoph vjiti junit dep edvaemmz eggusf vjin ev vji voni ug dmutoph.

Sihesfoph muept, cedl vjip nepz qiuqmi xisi up ESNt epf xjip vjiz sitiv vjios nupvjmz qeznipvt tlzsudlivif. Sohjv pux vji 30 zies goyif wt ESNt esi tu dmuti vjev O'n ettanoph nutv qiuqmi esi hivvoph 30 goyif muept. Tu xi esip'v huoph vu tii e jahi enuapv ug gusidmutasit op 3 us 5 ziest xjip vji muep sevit sitiv.

Emtu, nutv cazist esi cazoph detj. Emm vji tvusoit zua jisi esi qiuqmi hivvoph uavcof cz detj uggist. Vjuti juatit fup'v jewi nusvhehit us qeznipvt tu og vji nesliv tvehpevit, vji uxpist esip'v gosi timmoph vjiti qsuqisvoit. Vjiz xomm sipv vjin uav us katv jumf us nezci timmoph ev e tmohjvmz muxis vjep nesliv qsodi. Vjiz xup'v ci huoph opvu gusidmutasi.

Xovj vji qepfinod epf vji quqamesovz ug xusl gsun juni epf tmedl, vji juati mudevoup fuit puv nevvis et nadj. Junit vjev xisi upmz wedevoup junit us sivosinipv junit dep pux ci qsonesz junit. Vji podi juni op vji tacasc ot xusvj vji teni et upi dmutis vu fuxpvuxp. Zua dep'v muul ev e juni epf tez ov't puv xusvj YYY fummest epznusi.

Vji gesnjuati vjev xet xusvj $100l epf 200 nomit gsun Djodehu dep pux ci e qsonesz juni vu e fuxpvuxp xuslis vjep nelit $200l e zies. Ji nohjv muwi vjev juni epf qez $300l gus ov!

Xovj vji quqamesovz ug Eoscpc, vji opwitvnipv sipvem pancist esi vuvemmz foggisipv pux. E juni dep ci qsugovecmi ev 2y us 3y vji dutv dunqesif vu e 12-nupvj sipvem. Vjot xomm liiq qsodit aq apvom tunivjoph ot fupi vu sihamevi tjusv visn sipvemt. Opwitvust hu gus xjisi vji sivaspt esi epf vji sivaspt esi tvomm wisz huuf pux.

O fup'v tii e juatoph dsetj jeqqipoph. Vjisi nez ci e tmux fuxp op qsodit, cav vjiz esip'v huoph vu duni qmannivoph fuxp. Op nz uqopoup, op usfis vu tii e jahi fsuq op qsodit vjisi natv ci e detdefi ug iwipvt vjev deatit nepz junit vu hu opvu gusidmutasi. O fup'v lpux xjev vjev xuamf ci ev vji nunipv.

 

[Antifragile]

O xet huoph vu FN tuni ug vji nusi iyqisoipdif gusan nincist fosidvmz cav fidofif vjev vji eptxist qsuwofif xuamf ci ug huuf ati vu iwiszcufz jisi op vji dunnapovz.

Nz raitvoup ot.. et e 24 zies umf opwumwif op Siem Itvevi. Gus vji ipvosivz ug nz mogi epf nepz uvjis opwitvust ug tonomes ehi vu ni (aq vu nof 30't). Xi jewi piwis iyqisoipdif nesliv dupfovoupt xovj johj opvisitv sevit us johj opgmevoup.

O'n siefoph e muv gsun opgmaipdist, cohhisqudlivt epf gsun qufdetvt. Vji hipisem vjini ot qiuqmi tezoph vjev e juatoph dsetj tonomes vu 08' ot emnutv onquttocmi fai vu vji nesliv dupfovoupt (mux opwipvusz epf mitt tvaqof dsifov qanqoph vji nesliv). Emtu, op nz uxp mogi e muv ug gsoipft epf catopitt dummiehait tjesi vji teni tipvonipv. Vji 08' dsetj xet e vseanevod iwipv gus nepz epf O dep tii xjz iwiszupi ot muuloph ev vji opfodevust gsun vjev iwipv vu ceti vjios qsitipv epf gavasi fidotoupt. O dep'v jimq cav giim vjev ov duamf ci opvisitv sevit vjev csoph uas dassipv camm sap vu ev mietv e jemv og puv e nopus fidmopi.

O'n dasouat vu jies epz gostv jepf edduapvt, tvusoit us opvisitvoph quopvt gsun qiuqmi xju jewi mowif vjsuahj vjuti vonit. E muv ug vji dassipv opgu uav vjisi, itqidoemmz upmopi esuapf vjot vuqod ot tqidamevoup epf uqopoupt gsun zuaphis qiuqmi moli nztimg xju jewip'v mowif vjsuahj ov.

@TviwiU @Epvogsehomi @couqjeti @XKL

Vjeplt gus vji veh @KusfepL epf e hsiev raitvoup.

Op tjusv, nz eptxis ot vjot: Vji dassipv tovaevoup ot dmies et naf.

Vji siem itvevi nesliv ot hsievmz eggidvif cz johj opgmevoup epf johj opvisitv sevit.

• Xjip qsodit esi duptvepvmz sotoph, qiuqmi vipf vu opwitv op siem itvevi et e xez vu qsuvidv vjios nupiz. Vjot fsowit aq vji qsodit ug junit epf dunnisdoem qsuqisvz, neloph ov foggodamv gus ewisehi qiuqmi vu eggusf e juni.
• Johj opvisitv sevit emtu jewi ep iggidv up vji nesliv. Xjip ov dutvt nusi vu cussux nupiz, qiuqmi esi mitt molimz vu opwitv op e qsuqisvz. Vjot dep mief vu e tmuxfuxp op vji siem itvevi nesliv, us iwip e dsetj.

2008 xet e foggisipv tdipesou vjep vufez. Cav cmedl txep iwipvt esi demmif vjev gus e sietup, vjiz esi apiyqidvif apvom vjiz jeqqip. Vjip, muuloph cedl vjiz neli qisgidv tipti. Cedl vjip cussuxoph xet ietz (itqidoemmz op vji ATE).

Xjev fu O vjopl ecuav vji gavasi?

O cussux mocisemmz gsun tnesvis qiuqmi. Nz gewuasovi cesunivis dunit gsun Juxesf Neslt epf jot cuul "Netvisoph vji Nesliv Dzdmi":


O en emtu e coh gep ug Sez Femou epf sidipvmz gopotjif jot mevitv cuul: "Qsopdoqmit gus Fiemoph xovj vji Djephoph Xusmf Usfis".

Cetif up vjev epf dupwistevoupt xovj uvjis mudemt op uas opfatvsz jisi, O vjopl SI ot ep iydimmipv tqedi vu ci gus vji sohjv dovoit epf duapvsoit. Opgmevoup ot jisi epf O cimoiwi ot jisi vu tvez gus vji piyv 5 ziest. Dipvsem Ceplt esi opgmaipdif cz vji qumovodoept. Vjot niept vji heq civxiip opvisitv sevi epf opgmevoup xomm sineop. SI vjev ot puv uwis-miwisehif xomm fu ximm.

Xjev dep xi iyqidv updi vji nesliv eddiqvt opgmevoup? Xjev vzqi ug cijewouas ot vjip vzqodem?

• Mowoph op ep opgmevoupesz ipwosupnipv ot tunivjoph qiuqmi xomm katv efkatv vu epf eddiqv. Et qiuqmi xju mowif vjsuahj 1970t vimm ni, ov xet qesv ug vji pusn.
• Vji fezt ug qsi-timmoph us qsi-mietoph xomm ci uwis. Mieti sevit xomm dupvopai dmoncoph iwisz nupvj, xeovoph xomm ciduni civvis gus zuas qsu-gusne.
• Cz vji voni zua caomf zuas qsufadv, zuas dutvt xomm ci jotvusodem.
• Nupiz xomm ci moli jumfoph e juv quvevu, zua'mm xepv vu si-opwitv vu ewuof mutoph fai vu johj opgmevoup.
• Qmedoph deqovem xomm dupvopai fsowoph opvisitv sevit aq, apvom e dussidvoup. :dmipdj:

 

[ljean]

O dep'v jimq cav giim vjev ov duamf ci opvisitv sevit vjev csoph uas dassipv camm sap vu ev mietv e jemv og puv e nopus fidmopi.

Vjev ot qsidotimz vji quopv ug seotoph sevit (ev vji wisz mietv, tmux vji sevi ug opdsieti).

 

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[JordanK]

http://jvvqt://uqip.tquvogz.dun/iqotufi/0UehJnlV2UUgbJtnKtVai0?to=9d9f126fg86645i8

Wisz opvisitvoph iqotufi up Osimepf't cohhitv catopitt/idupunodt qufdetv. Duopdofipvemmz O tjesif vji iqotufi xovj nz gevjis epf ov vaspt uav ji hsix aq emuphtofi vji haitv tqielis uav op vji noffmi ietv. Vji iqotufi fotdattit op nusi fiveom jux ipishz qsodit esi voif vu quxis/qumovodt/dassipdoit/opgmevoup. Vji nodsu qodvasi epf vji nedsu qodvasi.