Unprecedented craziness in the world. 2008-2009 seemed not that long ago, and at the time, it was ultimate craziness. Looking back, there were people who got massively wealthy and there were those who massively lost and there were those who were hardly affected at all. This time won't be too different in some ways.
I've been thinking about this a lot, because as we all know, big events tend to shake things up, and what you decide to do at the time can affect your finances (and usually life) for years to come.
The stock market is going crazy, up and down every other day. Real estate is at a standstill because it's an uncertain time, and government restrictions are in place. Oddly, prices in LA on average are only slightly lower (about 3-4% drop recently) than last year. And about 25% of listed properties are selling--while this is low for the Spring/Summer months, it's amazing to me that there is still activity at all. When I dug deeper, a lot of these sales were investor buys. This is telling me that people with cash or other leverage, are buying up properties. This is exactly what happened in 2008-2009, history repeating itself.
Who bought real estate and other depressed assets back in 2008-2009? Warren Buffett, as an example. Couple weeks ago, he sold off hundreds of millions in stocks to amass some cash--clearly gearing to buy up things. Yes, WB has cash to burn, but is this something the little folks like us can and should do? Considering that we're going into inflation and cash will be worth less over the next several years, YES. Considerations are buying rent control properties (which are not good for landlords right now) vs non rent control. More on that later.
Who sold real estate back in 2008-2009? Panic-sellers and those who were stretched to the eyeballs in debt and sold to investors mentioned above. These same panic sellers are also selling stocks and gearing to unleash their assets. If you have lots of equity in your properties and have thought of selling in the next 2-3 years, you might want to sell now since selling activity will be slower for the foreseeable future. If you have no equity and are able to pay the bills, then you might want to hold and wait for the next rise, even if it's a micro-rise.
It's a strange time, but we overcame the 1918 Flu and the Great Depression, and we'll overcome this.
