Quote:
Originally Posted by woj
Only real estate flippers get slaughtered, those that make long term investment in cash flow positive real estate are always fine... in the worst case, one may be briefly underwater for a few years, but if the cashflow is paying all the expenses, so what... or am I missing something?
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Builders get slaughtered as well. Sitting on a development that cant be sold or multiple homes even.
As far as the ops question I can tell you that my town is in for a very rude awakening very soon. Prices here are pretty much double what they were pre-2008. People are paying stupid prices for homes and the only reason they are is because interest rates are low so they can afford to pay more.. They aren't thinking about what the house is going to be worth a few years from now. Only the interest rate. As soon as they sign the paperwork they've lost money. So in 2008 houses were over-priced/valued with higher interest rates but now that rates are low they aren't? It's as if home buying has turned into car buying. Knowing that when you drive it off the lot you've lost. It's no longer an investment. How did they fix 2008? Lowering payments by shaving off the interest. How will they do that when there is no interest to be shaved? This bubble is going to make 2008 look like childs play.