For fellow housing bears

[Anonymous]

Reducing the Fed's balance sheet and unwinding QE will hurt. We are coming up on close to a decade of monetary policies that have decimated the middle class.

[Anonymous]

I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

[Anonymous]

Speaking of rent, we've got over a century's history of the relationship between that and sales prices. In a normal, healthy market, a house should sell for about 150 times a month's comparable rent. Less than that, it's a deal to buy. Anyone who pays over 200 times a month's rent gets burned.

Prices are running 300-400 times rents, in many cases. It's really not hard to figure out something is very, very wrong.

[Anonymous]

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

This all depends on movement of people. It's supply and demand economics which anyone claiming to be a bear should understand. If the population continues to increase in an area, won't demand for housing continue to increase?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

Not exactly. The land generally appreciates because demand increases and there are other inflationary factors (e.g., cost of living). The structure itself does not really depreciate. It should be maintained, which is a cost. So in that way it can feel like depreciation. Certainly, over time the cost to repair to a standard condition (usable or appropriate for the area) is a factor. If the repair is not made, the property has to depreciate by an appropriate value. Nonetheless, not all of these things depreciate relative to replacement or repair costs or at all. Moreover, because material and labor costs do go up, the structure actually does appreciate from that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

PP is cutting off their nose to spite their face. You need a steady supply of monied buyers to keep prices up. By trumping your own imagined virtue and youngsters seeming vice, you're missing the fact that the pain of millennials could mean your dues don't pay off financially, because they can't afford the prices needed to make you whole when you sell.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

But does a pile of rotting wood and construction materials warrant exorbitant price increases?

The land should appreciate, but the structure should depreciate. The current model has both appreciating wildly.

This all depends on movement of people. It's supply and demand economics which anyone claiming to be a bear should understand. If the population continues to increase in an area, won't demand for housing continue to increase?

Bears also know that anytime 37% of home purchases are made by investors, something is funky with the supply/demand model.

[Anonymous]

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Your missing that boomers also had:
1) much cheaper educations, especially the public universities were more competitive and much cheaper then
2) massive increases in the number of professional class jobs
3) and my personal favorite, NEGATIVE real interest rates. Everyone talks, often naively, about high or low interest rates. But the fact is that early boomers got most of their mortgages, for much lower priced homes, paid for by inflation. Understand this and you realize that much of boomer wealth wasn't about sweat, it was about windfalls.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

PP is cutting off their nose to spite their face. You need a steady supply of monied buyers to keep prices up. By trumping your own imagined virtue and youngsters seeming vice, you're missing the fact that the pain of millennials could mean your dues don't pay off financially, because they can't afford the prices needed to make you whole when you sell.

It's very hard to let go of feeling like you earned something because of your own hard work and diligence than luck. The reality is that it's a combination of both. Millenials will NOT enjoy the same type of growth because of the fundamentals. Our population only increases because of immigration, what happens if that is reduced significantly?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Without trying to read the tea leaves on proposed budget cuts, my take on the DC area is that housing costs are way beyond historical norms, relative to HHI. This has been made possible by abnormally low interest rates. When rates rise (and they will) to historical norms (the average thirty year rate is 8.5% or higher) housing will be hit and probably hard in this area.

Households can and have borrowed four and five years' income at three percent interest for housing. That will be impossible at 8.5% or higher. Ergo, prices will come down. The math determines it, not some agent's opinion.

DING, DING, DING! Virtually everyone I know sitting in a 1.8 million house had one or both of the following:

1) "Help from family" - which is to say, money that was likely not earned in the region
2) The enjoyment of some ridiculous equity explosion, that they kept rolling forward to properties - which is to say, they could never pay to house themselves and live a good life in the region, while saving for a $700,000 down payment. They "saved" for their down payment by living in a house that just magically increased in value.

DC salaries, when you look at other ultra expensive cities are very low. We don't have loads of hedge fund folks or techies who are getting multmillion dollar bonuses, and we consider "rich" people to be big law attorneys. Further, government salaries are capped very low at $200k.

Also, Millennials have absolutely no money. Yeah, sure, a few of them do. I am a Millennial and it is very hard to break into the housing market, and no Millennial is going to enjoy the easy equity Gen X and Boomers took for granted. Millennials also aren't willing to buy properties they don't like. Millennials spend all their money on chai lattes and Chop't salads, and they want the best of everything with minimal inconvenience. In 10 years, do you think they're going to line up to buy your crappy new build which will by then be dated and probably falling apart?

I love that you started this thread, OP. I am a home owner (hot area, close in burb, straight 10s on the schools), and I'll still be delighted when this ridiculous market right-sizes.

I'm adding 3) foreign $. I'm in an area with great schools and there are lots of wealthy foreigners buying houses in the $1.5-$1.8M with cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think people are in denial. What has been happening here is just simply not sustainable.

Everyone lambasted the millennial poster who started the thread asking how they were ever going to be able to get a house, but I do agree that it is a problem if the generation coming up simply cannot afford to get into the market.

And the jobs issue isn't just about govt. budget cuts. Some very smart economists have been talking about AI and concerns that there will be far fewer jobs going forward. That's another topic for discussion, and maybe it won't come to fruition. But it is something to look at.

The Boomers had high interest rates, but they also had lower prices. Most Boomers also saw HUGE increases in equity and were able to refinance to lower rates and take cash out. Gen X had low interest rates, but they had high prices.

The millennials are facing exorbitantly high prices and eventually steadily increasing interest rates AND a tighter job market.

The attitude on that other thread was, "Well, we paid our dues; they'll have to struggle and pay theirs!" But I don't think people realize how that affects all of us.

When the middle class was really strong, housing was not seen as something you got rich off of. It was seen as something that you invest in for practical reasons -- to have a place to live that is paid off when you near retirement. The concept of the 30-year loan was that you live in the house.

This whole notion of starter houses and flipping and building equity only works if prices are going up, up, up, and up. In a normal market, the value of your house doesn't increase that much in the short term. Buying a house and then selling it in 5 years, for example, wouldn't give you enough to pay a down payment on another house. But meanwhile, salaries aren't high enough and rents are too high that there seems to me little way people can realistically save for a down payment.

I don't think what has happened to real estate is sustainable.

But who knows. We'll see.

Sorry pal but we paid our dues, we lived in the exurbs for 12 years to afford a house close in. We aren't rich and we built up equity by making house payments. If millinials are upset they can't afford a million dollar "starter home", well that's because it's not a starter home.

PP is cutting off their nose to spite their face. You need a steady supply of monied buyers to keep prices up. By trumping your own imagined virtue and youngsters seeming vice, you're missing the fact that the pain of millennials could mean your dues don't pay off financially, because they can't afford the prices needed to make you whole when you sell.

It's very hard to let go of feeling like you earned something because of your own hard work and diligence than luck. The reality is that it's a combination of both. Millenials will NOT enjoy the same type of growth because of the fundamentals. Our population only increases because of immigration, what happens if that is reduced significantly?

Don't get me wrong (and yes I'm the pp that bought in the exurbs 12 years ago), we did get lucky but years of making the house payment does build equity. Plus we put in substantial sweat equity.

The key thing to remember is, ithere are only so many areas with very good schools and the wealthy will always compete to purchase there. Buying in areas the wealthy like is as close to a sure thing as you can get.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Without trying to read the tea leaves on proposed budget cuts, my take on the DC area is that housing costs are way beyond historical norms, relative to HHI. This has been made possible by abnormally low interest rates. When rates rise (and they will) to historical norms (the average thirty year rate is 8.5% or higher) housing will be hit and probably hard in this area.

Households can and have borrowed four and five years' income at three percent interest for housing. That will be impossible at 8.5% or higher. Ergo, prices will come down. The math determines it, not some agent's opinion.

DING, DING, DING! Virtually everyone I know sitting in a 1.8 million house had one or both of the following:

1) "Help from family" - which is to say, money that was likely not earned in the region
2) The enjoyment of some ridiculous equity explosion, that they kept rolling forward to properties - which is to say, they could never pay to house themselves and live a good life in the region, while saving for a $700,000 down payment. They "saved" for their down payment by living in a house that just magically increased in value.

DC salaries, when you look at other ultra expensive cities are very low. We don't have loads of hedge fund folks or techies who are getting multmillion dollar bonuses, and we consider "rich" people to be big law attorneys. Further, government salaries are capped very low at $200k.

Also, Millennials have absolutely no money. Yeah, sure, a few of them do. I am a Millennial and it is very hard to break into the housing market, and no Millennial is going to enjoy the easy equity Gen X and Boomers took for granted. Millennials also aren't willing to buy properties they don't like. Millennials spend all their money on chai lattes and Chop't salads, and they want the best of everything with minimal inconvenience. In 10 years, do you think they're going to line up to buy your crappy new build which will by then be dated and probably falling apart?

I love that you started this thread, OP. I am a home owner (hot area, close in burb, straight 10s on the schools), and I'll still be delighted when this ridiculous market right-sizes.

I'm adding 3) foreign $. I'm in an area with great schools and there are lots of wealthy foreigners buying houses in the $1.5-$1.8M with cash.

Capital flight from China is yuuuuuuuuuge right now.

[Anonymous]

If home values stagnate or fall in the near- to medium-term, then current owners in desirable areas are going to stay in those houses forever, because they won't want to sell at a loss. This was something of a problem during the last downturn, when it took something like a decade to get back to 2004 or 2005 prices (and some places still haven't). So even if prices come down, it will only help buyers so much.