![]() ![]() 2008’s recession was caused by the subprime mortgage crisis. ![]() This consequences of the crash – specifically, the subprime mortgage crisis – rippled out into the rest of the economy and caused a recession. When this hot-potatoing stopped (because mortgage-backed securities collapsed due to defaults, which dried up the free-flowing credit that these speculators were using to finance their flips), the demand for housing plummeted and we saw a crash in the real estate market. This happened because flippers and speculators with irresponsible leverage became the market price-setters and were responsible for significant deal volume.įlippers were flipping houses to other flippers, and the market grew due to artificial demand from these speculators hot-potatoing houses between each other. In other words, a house that cost $500k in 2007 might have cost $400k in 2009. If companies make less money, does this correlate with deflationary real estate prices?ĭuring the 2008 Great Recession, the housing market specifically became deflationary. That bag of coffee that costs $5 today will cost $4 tomorrow. A bag of coffee that costs $5 today will cost $6 tomorrow.ĭeflationary = prices tomorrow are LOWER than today. Inflationary = prices tomorrow are HIGHER than today. Repaying your mortgage with cheaper dollarsĪ lot of people have it in their head that recession = a crash in the real estate market.īut if you pause and think about it critically, these two things don’t correlate.Ī recession essentially means that companies are making less money.Ī real estate crash essentially means that real estate prices are deflationary. A locked-in fixed-rate mortgage that you secured before interest rates increased further An asset that performs incredibly well in inflationary periods If you were to get started investing now, with a fixed-rate mortgage, you’d essentially get “triple-dipped” benefits… This adds up to make now a great time to get started in real estate investing. So in other words, if you were to wait another year to buy a house, inflation alone would likely make it effectively cost more, since your money can buy less stuff in general. You pay the bank back with weaker dollars over time, but you were able to secure the full inflation-protected value of that house on day one. You put that money into a rental property that will likely increase in value as inflation increases (even though we primarily invest for the cash flow, not the capital appreciation) The bank gives you your $200k today to buy a rental property You essentially get to repay your mortgage with cheaper dollars due to inflation. (Are you starting to get an idea of why real estate prices are going up so much?)Īside from the value of parking your cash in a tangible asset, there’s another benefit to getting into real estate in inflationary periods if you’re a borrower on a fixed-rate mortgage… Arya ( Maisie Williams) is forced to go a bit over-the-top murder-crazy to drive home the point, but a break between the two might open up the younger Stark sister for more interesting, and murdery, subplots.This is coupled with the already-hot market due to the housing supply shortage we’ve been experiencing for years. Less interesting, but foreshadowing trouble in Winterfell to come, is the machinations of Littlefinger ( Aidan Gillen) playing out as he drives a wedge between the two sisters based on Sansa the Bland‘s ( Sophie Turner) actions leading up to their father’s death. ![]() Snow’s survival is also a bit unbelievable given the chain of events. There’s plenty of action here (although the show once again plays very loose with things like time and distance). Despite the risk to herself, and the loss of one of her dragons to the enemy (okay, how cool was that last scene?), Daenerys Targaryen ( Emilia Clarke) rides to the rescues getting the remainder of the fellowship, other than Snow, out alive. On an island, separated by the harsh arctic water, the group stills themselves for when the water re-freezes and the undead army can march once more. Shocker! An indeterminate distance above the wall the attempt to capture a single undead soldier gets the entire group surrounded by White Walkers and their undead enemy. The worst plan ever backfires on Jon Snow ( Kit Harington) and his companions. Title: Game of Thrones – Beyond the Wall.
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