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Originally Posted by LegendaryLars
anyway my prediction is in many areas vegas california florida arizona and the north east will suffer a 10-20% drop in price and it will take 5-10 years to recover that ammount !
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Does that 10-20% prediction factor in the panic selling? You know how the stock market works lars... maybe something happens to a company that should legitimately result in a 20% drop... but the public freaks the fuck out and creats a 60% drop... sure, it bounces back and recovers eventually (to that legitimate 20% drop level... not always full recovery)... after they've shaken out all the people who don't understand that game.
In RE there are no stops like in the market... and a lot of people set themsevles up pretty bad. People everywhere buying way more house than they can really afford because they think RE is a guaranteed money tree.
EXAMPLE: many people had a $100k house go to $400k.... then they cash out $300k ahead, go wild with $50k and take the other $250k and use it as a down payment for a $750k house. They didn't get a new job or anything.... but now they have a $500,000 mortage instead of a $100,000 mortage. Hehe.
So when RE starts to lose its value... people in the example above are going to bail and try renting for awhile "until things settle down".
When are people going to learn that the people pulling the strings don't just hand out money to the masses like this... by the time it gets to the point to where everyone and their mom is doing it and making a little change -- it's a trick. They are about to flip on your ass and have you broke - for the rest of your life.
It almost makes me sad.