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Real estate prices have greatly exceeded wages in many areas. That simply can't continue.
Doesn't mean there will a crash, although some areas like Florida have always been boom and bust and will remain so, it does mean that the ridiculous appreciation of the last half century can't continue forever.
Our area did suffer a flattening in pricing for a couple years in 2009-2011, with houses taking months to sell. But when we refinanced our house in 2009, it still appraised for $3K higher than we paid for it at the height of the market in 2006. And if we were to sell it today we'd be able to sell it within a couple days for about 30% more than we paid for it in 2006. So our area continues to be okay for the most part.
I guess I mean any market correction in which RE prices decline and ultimately lose over 40% of their value. And obviously no one knows, I am just curious to know others' opinions.
How many 40% RE market crashes do you think there has EVER been in the general US market or at least a good chunck of it (as opposed to a small localized market?
The 1st choice you list is 1-3 years out. I would say there is about 0.001% chance of a 40% value in that time frame.
Last edited by TimtheGuy; 02-21-2017 at 12:56 PM..
When do you think the next housing market crash will be?
And why?
OP, 40 % is not correction, that's a slaughterhouse.
Market is regional. I live in suburbs of Houston, and our market just hit bottom couple of weeks ago. We are very dependent on oil business.
Personally, I think that CA just got to the peak. But that's just my opinion, of course. Nobody can really predict what will happen.:-) No crystal ball here.
At least in Los Angeles, the real estate market seems to function under "The Greater Fool" theory. So I suppose the crash will occur when we run out of "greater fools".
Let me elaborate, the Trump picture is starting to be painted. I still think it's a good time to buy a house.
Juice the economy with Reaganesque tax cuts, and loosen lending standards. When that happens, let the irrational exuberance begin. But that also takes a few years to set in.
So say you buy a place for $350k today. 5% down, then gain some equity for 5 years before it "crashes" again. After 5 years, you owe $300k. The value at crash was $400k. Subtract 40% from $400k, your home is worth $240k. You owe $300k, so you're only $60k under. And you have to live somewhere. So pay on it for 5 more years, loan balance is smaller, economy is recovering again and values rise again, soon you're back at equilibrium. That's why they say stay put for 10 years. Now as the economy is recovering and your equity is again building, you're back to normal. And if you're around for the next crash another 20 years later, you're home is paid off and doesn't matter.
Join Date: Aug 2010
Location: Los Angeles
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At least in Los Angeles, the real estate market seems to function under "The Greater Fool" theory. So I suppose the crash will occur when we run out of "greater fools".
Demand is insane in L.A., and supply is short. We are not at peak L.A. yet
When do YOU think the next Housing Market Crash will be?
I really don't have a clue.
Luckily, I don't plan to move so I am thinking maybe it won't affect me.
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When do YOU think the next Housing Market Crash will be?
