We sold our house 6 weeks ago or so ago (significant cash out) and moved across the country, and we decided to rent for a bit and gamble that the market would collapse more. But we hate renting and we are already capitulating and putting an offer on a house we found and love. Even with our cash the mortgage will be about the same as before, due to the interest rates. So now we will be gambling that the interest rates will not continue up for long, and that they will decrease below their current level within a couple years. It feels wrong from an investment perspective, but it feels right from a life decision perspective, and it feels right from a security perspective (owning a place we can secure, and where we can grow a garden, etc.), and in the event of a currency crisis it would be bad to be super long cash. Side note: we don't have kids or pets, so it's just my wife and me; and we both have family nearby.
What would you do? And why?
Thanks man. Ugh, this sucks. We want to buy so bad, and prices came down some here, but it's not a cheap house. From an investment standpoint, this would need to be long term (10 years). But as much as my instinct tells me the market is heading lower, I also know that the real course of events always surprises everyone. People like Michael Burry and Peter Schiff are talking about how it's gonna crash big. Whenever the people who predicted X last time start predicting X this time, and everyone starts believing it, it never ends up happening.
Then... the elephant in the room, the 7% interest rates. The same monthly mortgage costs somebody +35% more than it did last year, and I feel like that just has to be reflected in the prices, but, like you said, houses are not liquid, so there's stickiness... it might take 2-3 years.
Part of it is impatience, for sure. Part of it is us being afraid that we are going to wait and then the market is not actually going to crash, since everybody seems to think it is going to, just like in 2015. And then part of it is us being afraid that we are going to be in a rental with no good ability to produce food when SHTF (not to mention a lot of our food and other survival gear is in storage, which, depending on the kind of SHTF, could be inaccessible).
[now going back to pulling my hair out]