Self fulfilling crash or contrarian perspective?

I’m not necessarily interested in predicting a bearish/bullish trend for RE, I’m more interest in everyone’s opinion on how current sentiment may influence the markets. I find investor/consumer psychology interesting, and dynamic.

I think a good number of us are in tune with the global economic climate at this point, or at least the most persistent talking points. Main stream media has started to pick up frequency on topics that a smaller number of economists were concerned with in December of 2021 to January 2022. So sentiment (IMO) is very different today than it was January 2022.

Chiefly the recurring discussions are about a global decrease in expected GDP for 2022, persistent inflation concerns, Ukraine/Russia impact on commodities/energy/food supply, China’s covid policy effect on supply chain, Europe and China downward revisions on economic output in near term, US equity market declines, inversion of yield curves, bond markets historic mismatch in performance, potential inflection point in home sales, and many other bearish sentiments.

I’m not a perma bear, in fact I don’t have a strong inclination one way or the other. But I wanted to see what your thoughts are in regards to how the current sentiment may effect the RE market in particular.

I often hear euphemisms such as “ain’t gonna be a crash if everyone expects it, there’s too much money on the sidelines waiting for the opportunities we all see coming!” And conversely, “if enough people think something will happen, the herd mentality delivers on a self fulfilling prophecy!”

Both arguments sound plausible on the surface, but are opposing in principle. So what says you?

For RE in particular, will current sentiment cause a self filling drop in valuations? Will the contrarian view provide support to prevent a material decline due to money in waiting? Or am I overestimating current bearish sentiment (confirmation bias from too small a sample size repeatedly reporting on bearish sentiment)?

submitted by /u/pancho4e
[link] [comments]

I’m not necessarily interested in predicting a bearish/bullish trend for RE, I’m more interest in everyone’s opinion on how current sentiment may influence the markets. I find investor/consumer psychology interesting, and dynamic. I think a good number of us are in tune with the global economic climate at this point, or at least the most persistent talking points. Main stream media has started to pick up frequency on topics that a smaller number of economists were concerned with in December of 2021 to January 2022. So sentiment (IMO) is very different today than it was January 2022. Chiefly the recurring discussions are about a global decrease in expected GDP for 2022, persistent inflation concerns, Ukraine/Russia impact on commodities/energy/food supply, China’s covid policy effect on supply chain, Europe and China downward revisions on economic output in near term, US equity market declines, inversion of yield curves, bond markets historic mismatch in performance, potential inflection point in home sales, and many other bearish sentiments. I’m not a perma bear, in fact I don’t have a strong inclination one way or the other. But I wanted to see what your thoughts are in regards to how the current sentiment may effect the RE market in particular. I often hear euphemisms such as “ain’t gonna be a crash if everyone expects it, there’s too much money on the sidelines waiting for the opportunities we all see coming!” And conversely, “if enough people think something will happen, the herd mentality delivers on a self fulfilling prophecy!” Both arguments sound plausible on the surface, but are opposing in principle. So what says you? For RE in particular, will current sentiment cause a self filling drop in valuations? Will the contrarian view provide support to prevent a material decline due to money in waiting? Or am I overestimating current bearish sentiment (confirmation bias from too small a sample size repeatedly reporting on bearish sentiment)? submitted by /u/pancho4e [link] [comments]

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