Originally Posted by WarrenC12
I bought at a time where mortgage payments were equal to rent on the same property, at higher interest rates. We are so far away from that today that it's laughable.
Real estate moves relatively slowly compared to other markets, but it is very cyclical and history does repeat itself.
True it is very cyclical and will repeat itself.
Real Estate has always held steady with the rate of inflation over the long term. And this will be a biggest factor in knowing how much of a correction we can expect.
What will be a big factor in how fast this correction happens. Is how many homes are owned buy those who use it as their principal residence compared to how many homes are owned buy those purely for investment reasons.
The first group really has no reason panic if their is a drop in the value of their home. So long has the drop doesn't put them in a position where they are unable to refinance their mortgage.
However the second group is the ones that will probably panic and try selling off what they have. Thus creating a surge in the supply and a race to the bottom.
So if the first group is more prevalent I expect a slow correction over the next 5 years or maybe longer.
But if the second group is more prevalent then I expect a major fast correction to happen.