When the bubble bursts, all the people who paid premium prices are going to regret it.
It is likely that the economy will decline, jobs will be lost and enough of the folks who overpaid for real estate will default because they will not have the option to sell.
Housing loan crisis 2.0, here we come.
I always tell my clients that the "A" in zillow stands for accuracy.I had my vacation rental under contract for 269k back in May. I ended up letting it expire, mainly due to complications with all the existing reservations (AirBNB).
At the time, Zillow showed it valued at 259k.
Checked it last week….332k.
Tempting but I do enjoy using it. About 15min from SpaceX spaceport and the area is really growing. Hopefully it doesn’t swing back too much but I’m rolling the dice and holding.
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Yup, many did the same in 08', even if they had the income they chose to just default when their overpriced $450k home dropped to $150k.
I'll never forget when the crash started and people were loosing their shit. The ones who cut and run all had the exact same excuse/reason. I heard them all say "I was told this house would gain xxx value in xx time and now it's lost over 100k so ****em".
Before that happened I knew things were going to turn hard based on two things
1. There was a report read on a radio station I used to listen to that said the average income in my area could no longer afford the average house.
2. I was told by a coworker that I needed to hurry up and buy a home before I couldn't afford one.
These two hit me hard because at the time I made slightly more than the average income in my area at the time. I crunched the numbers and realized I'd be house poor. I passed on the idea and made out better in the end because I picked up a massive house in 09 for cheap and it still paying me today so to speak.
What's disturbing to me now is that there are a reported 1.5 million homeowners who are behind on their mortgages.
Then you have anti eviction laws in place that are preventing landlords from making payments on their rentals.
Couple this with dementia Joe freezing student loan payments until January and it's not hard to see how a financial reckoning of sorts is essentially being kicked down the line. Eventually it's all going to come to a head and I would be surprised if it's worse than 08.
Just my .02 cents.
Mine isn't even on the market and I was offered 200k more than I paid for it in cash. Problem is there isn't anywhere to go and I'd end up overpaying for something else.