sure; if you’re writing naked puts on Amazon. But if you’re writing one on DAL with moderation, and you want assignment of shares, that’s a different story. So I wouldn’t go as far as saying all naked puts can kill your account. I often write naked puts for a better entry price to shares I want to own.

 

On individual shares if you're willing to own the stock, sure, no problem. I trade cash settled options on SPY so always using protection to limit the risk. I should have been more specific.

 

I think it was John Gruden who said “ When opportunity knocks, it’s too late to prepare.” Anyone who had cash on hand after the 2008 crisis, had their pick of cheap high quality stocks or real estate investments. This pandemic, not so much. Yes, there was a substantial drop for a month or two in the markets, but real estate never got cheap, in fact, just the opposite happened.

What cash I had on hand during the drop in March/April, I wanted to keep liquid because of uncertainty, and I expected the pullback to last a lot longer, which it didn’t. But I have done well trading this year and have done well in my 401K.

 

Word! Its absolutely crazy to me to see the real estate market the way it is right now. I have been expecting a correction, but it just keep going up and up. Stuff is going above ask with competing offers, the day it hits the market. Selfishly, I'm hoping for a correction in the real estate market since I'm hunting for my "forever home."

 

2.25% 30 yr notes will do that. Uncle Sam can’t stop the presses on the “quantitative easing” binge we’ve been on or things will get ugly. Prepare for the ugly. It’s an opportunity.


Sent from my iPhone using Tapatalk

 

Can only speak to my locality (Norfolk/Va Beach) but there is stupid low inventory right now here.

Some of it is fear of "people with covid being in my house looking at it" which had about 30% of my wife's listings drop or become unshowable. But we are in an area that people still move in and out of (heavy military presence, 3-4 years average time on station) and a few corporate HQs with people always moving in and out.

Anything on the market, that is priced around market will sell within a week. My rental sold in 3 hours, with a bidding war.

Selling the rental was easy. I too was expecting a major correction and wanted out before that hit. Got F'ed with that in Jacksonville in the 06-08 crash. Problem is, if I sell my main house to cut expenses, not much to buy. And certainly none of it would be a cost savings.

We have enough people coming in with steady gov't or high enough up in the corporate structure they don't get laid off, checks. We do have the second highest percentage of people in the US for a metro that have their checks come from FedGov, just behind DC, so it is semi insulated here, because so many of the people are in jobs that won't go away short of the USA ceasing to exist as a political entity.

My basic plan if the market tanks here hard, and I still have a job, is to just ride it out. I'm a block from the bay, I have a dock, my area will be one of the first for housing prices to recover unlike cookie cutter subdivision #844 that only justifies the price because local HS and ES are A rated.


If the economy tanks hard, I'm going to learn from my parents, and if there is no prayer of getting out of the house clean, and I have no income beyond unemployment and VA disability coming in and no prospects of that changing, say we hit a 1930s level depression, or worse, I will just sit on what liquid assets I have and let the bank take it..

In the 08 crash, my dad became very ill, lost his medical, (no major airline style decent disability) and their farm that was worth $800k that was mortgaged for $600k, became worth $400k overnight. They blew through all their savings, both normal and retirement, only to delay the inevitable foreclosure by 18 months, and were instead **** broke living with me at the end of it.. Only so Bank Of America would lose less money (and get a govt bailout anyway)

 

I am looking for the same. I also feel like the only person who doesn't like housing prices that are always climbing.
What good does that do for the average person? The example I use: If you buy a house for 200K and it goes up 10%, you gain 20K. If your next house was worth 400K and went up 10%, it increased by 40K. Now that 20K you thought you had gained in value is actually a 20K hit. It helps the lenders as you will need to borrow even more for the next house. It helps the lenders when you take out a HELOC because it increased in value to make improvements to your house. Climbing home prices is definitely good for the lenders. I look forward to not having a house payment someday.

 

I can’t believe housing prices now compared to 20 years ago. I got into mine in 2000. Then did what you are not supposed to do.... Tore down the old house and built new becoming the most expensive house..... Well, in the last 5/10 years, there have been a lot of tear downs and rebuilds/remodels that are waaaaay more expensive than mine was in 2000 (obviously I’m no longer most expensive house) and housing prices have gone stupid/crazy here and just keep going up and up. If I ever sell it, it will be the first time I make money on a house.....but it will way more than make up any previous losses which weren’t much.

Denny

 

The people that moved in next to me paid $75k over what comps showed. Well into the $600s.

Maybe I’m just old fashioned, but that’s a ton of debt to be carrying. Normally, I’d write it off to a wealthy Aunt, hit the lotto, frugal savers, married rich or what have you, but it’s been happening all over our area. People just walking in and financing a $600-700k house. A new development nearby with that price range was completely sold out in about six months.

A handful of people I could see, but it’s like everyone can swing a 600k note these days.

 

P&I on 600K is $2,293 for a 30 year loan at 2.25%. Just a few years ago at the historically low rate of 4%, the payment was $2291.59 on a 480K loan. At 5.5% (2009-2009 rates) that payment would equate to a 400K mortgage. People buy houses on monthly payment more than purchase price. Buyers are skipping the middle home and going from the starter home straight to the forever home.

Inflation will wipe out much of the debt, might as well go big.