Well, here we are, AGAIN.
The circumstances are slightly different but the victims are the same.
In 2005, 2006 and 2007 house prices were on the rise. There was no way they could come down according to every housing professional you talked to. If you wanted that house, you were paying the piper and that was that.
Then it turned out Bernie Madoff and his buddies were playing games with money that wasn't real, robbing Peter to pay Paul, and in September of 2008, it caught up and a lot of equity evaporated.
Here we are again. A lot of professionals will and have been telling you different, but the same outcome is inevitable.
The supply side economic plan of dropping interest rates increased buying power and agents made sure you bid as high as possible to capture that home, because you needed it(they needed a commission too). There were 16 parties bidding on one home. Inventory had decreased more than 50% since the last crisis and people had to have the house.
The decrease in inventory is not a new thing but is increasing exponentially because of the problem of "where do you go, now that you've sold".
Now interest rates are finally up. My kids are all adults now and don't even know about rates like these. We've been living in a dream world of cheap money. The good news is that the dollar will have value again. The bad news is that we have driven up prices.
This is the cure.
If you're buying a home, plan to stay there for the long run, unless you can find a home that is finally coming down since people are not willing to put in sweat equity.
Make sure your agent is experienced and not desperate.
I still blame most of my colleagues for the current market.