Just read an article that household finances are still fine. Sitting on a lot of cash. If there is a problem coming it’s not likely to be from that part of the economy.
What is getting dicey is commercial. The number of high rises in downtown LA that are underwater with high vacancy rates (avg 22.5%) is scary. Some have sold at half their prior sales price over 10 years ago. In SF, Hilton Union Square, Parc55, and Westfield Mall Union Square all have stopped making mortgage payments from what I read tonight (I haven’t verified). Those are some big players in SF tourism!
If enough commercial defaults then banks will have to deal with the bad loans. If the banks start collapsing, I’m not sure what happens next. But it probably isn’t good.
If we have rain clouds on the horizon, that’s where I think they are.
