takeashot30: What will happen if the real estate “bubble” pops.?
I’ve read some things saying Real estate is a bubble and it is going to pop sometime in the future. What does this mean and what will be the effects of the burst?
Has this happened before in our history?
Answers and Views:
Answer by mabaitnadalawangsapatos
It won’t. It’s not a bubble, it will just fluchuate back to the right prices, where they will adjust to where people can afford them. Depending on where you live and in terms of the economy, that’s how house pricing is done.
The person who paid $ 250,000 for a home will now have a home that can only be sold for $ 100,000.
People will owe more on their home than what they will make selling the home.
It think the demand for homes will decrease and with that the amount of money people are willing to pay for a home will decrease. People will not be able to make a killing by ‘flipping’ houses (buying and selling to make a profit.)
I have seen it in the area where I currently live. For a long time, people were frantic to buy a house because the market was so hot and they paid hundreds of thousands for a ‘shack’. Now, the home sales are declining (just a bit) and the shack that sold for $ 200,000 will no longer sell for that much.
Answer by akc1106The real estate market runs in cycles, always has and always will. Sometimes it’s up and sometimes it’s down, but it always returns either way. Lucky for me, I live just outside of DC so there are plenty of jobs and always a huge demand for housing, so this so called bubble won’t effect my business.Answer by Jill B
Keep in mind………..
Times and markets are changing!
In California with average homes selling well over $ 500,000, a 20% decline is $ 100,000! In any market ‘timing is everything’! So, could you afford a loss of 25% of your investment all because of poor timing???
This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.
From 1990 to 1996, the average home in San Diego lost 20% of its’ value! The cycle we are now enterng looks like it could well exceed that on the downside!
With all the 100% financing, interest only loans, EZ qualifing etc…even a slight decline will cause many to be unable to sell for the amount due on their loans!
For some great ‘insider’ articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years…..visit:
Times and markets are changing!
In California with average homes selling well over $ 500,000, a 20% decline is $ 100,000! In any market ‘timing is everything’! So, could you afford a loss of 25% of your investment all because of poor timing???
This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.
From 1990 to 1996, the average home in San Diego lost 20% of its’ value! The cycle we are now enterng looks like it could well exceed that on the downside!
With all the 100% financing, interest only loans, EZ qualifing etc…even a slight decline will cause many to be unable to sell for the amount due on their loans!
For some great ‘insider’ articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years…..visit:
https://www.brokerforyou.com/brokerforyou/
https://www.downtown-san-diego-real-estate.com/san-diego-real-estate-article-index.htm
https://www.brokerforyou.com/brokerforyou/
https://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
https://www.brokerforyou.com/blogger/index.html
https://san-diego-coastal-real-estate.blogspot.com
https://sandiegofsbo.blogspot.com
https://downtown-san-diego-real-estate-views.blogspot.com
https://san-diego-coastal-real-estate.blogspot.com
https://sandiegofsbo.blogspot.com
https://downtown-san-diego-real-estate-views.blogspot.com
https://www.poway-real-estate.info
https://www.del-mar-real-estate.info
https://www.los-angeles-real-estate-brokers.com
https://www.orange-county-real-estate-brokers.com
https://www.san-francisco-real-estate-brokers.com
https://www.sacramento-real-estate-broker.com
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