A few of us put out a warning late last year regarding the situation we are experiencing now and what will come in the next 6 months. Myself and a few others on this forum went through 2010. Real Estate has always depended on financing. If the terms are in sync with prudent investing the market moves forward.
If not the market stalls. Inflation - it can help investments, giving a higher return. Or it can depreciate. If you buy at the wrong time! Thats what is going to happen now. I’m in South Fla. Prices are and have been 30% over priced.
I’ve been pointing my finger at the administration being the progenitor as they have spent trillions on borrowed money, but I just read that 1/2 of home sales in the past year have been INVESTORS. Amazing. Seeing the price escalation in homes, they jumped on the bandwagon. Top and bottom fueled the inflation we are living in now. So who suffers — the middle class, who have no hope of stopping the government spending and had no money to invest.
I feel sorry for the investors who cashed in their IRA’s to buy a house…they think their investment will escalate, when the adjustment of the 30% overvalued prices comes about they are holding the bag.
Take a $300,000 home sale. When the a 30% drop comes their down payment and costs they paid is GONE. Foreclosures will be the next item to come about.
If you doubt what I have written, just go back to 2010 and exam the market.
It happened before and we are seeing it happen today.
Thanks for lending an ear.