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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Classic signs of a RE bubble popping (in no particular order):

- Realtors selling their own houses. (i.e. Listing agent is the owner...). If they are selling...
- You see more and more of "No home sale contingency" - Really? You wanna sell yours, but I shouldn't sell mine?
- Multiple, relatively fast paced price reductions - They overpriced it, and now are just trying to find a floor where a buyer will step in.
- RE is all over the news. Real estate is boring. If the media is talking about it, it is NOT boring and that can mean only one thing.
- Quick flips on the market - Really? You bought it last year for xxx and now you want yyy? For...holding onto it for a year? Because...you know you'll never get this price down the road?
- Lots of immigrants selling. This is a bit unusual, but I've been an agent for over 30 years, and I've seen this many times. Immigrants, especially from Asia, are very prudent and rarely flip RE for profits. If they are selling...
- Opendoor/Zillow/LLC owners selling. This one is self explanatory.
- New houses sitting on the market - If new houses are sitting...with presumably the latest in design trends, layouts, finishes etc...
- Price reductions on new builds - see above.
- You see lots of "defensive" talk from current owners that it's not a bubble. Pretty self explanatory. They are scared.

There's many many more reasons, but in the end it's all about wages vs real estate. If wages are NOT rising in line with real estate, then by definition it's a bubble. Don't be the "Greater Fool", buy what you can comfortably afford, is priced realistically, and plan to be in it for many many years. The transaction costs for RE are about the worst for any asset class. [/quote]
Do you work in the DC area? If so, which part?[/quote]
I'm mostly semi-retired now but yes, I used to work the entire DMV area.[/quote]
Are you seeing places where what you outlined above is happening more than others?[/quote]
All over.

Not just in the DMV, but across most of the country. While work-from-home HAS changed the dynamic a fair bit, when it comes to RE, the current prices in most of the country are unsustainable. It doesn't matter if interest rates go up or even lower from where they are now (a popular excuse for high home prices), WAGES are still not where they need to be to support these prices. The few ways the current prices can be sustained are:

- Wages go up. By a fair amount, not just tiny fractions. Fairly unlikely to happen.
- 40/50/or more year mortgages become mainstream. This is actually the most likeliest thing to happen.
- Negative interest rates. By a lot. i.e. the govt essentially pays you to borrow money. This is the least likeliest to happen in the US, our country will break down if it ever happens.

And that's it. I can't think of any more scenarios. People talk about "inflation" as the reason RE prices are going up, but that's not true in general. If inflation is going up, the average person has even LESS money for a house payment, whether it be renting or buying, [b]if wages don't up[/b][I].

What's more likely to happen is "stagflation" - i.e. prices of things (including RE) become too high to be sustained, and the consumer just stops. They will still need to spend on essentials, and RE IS an essential item, but people will just go for cheaper housing, even if it affects their living standard (well, duh, it's already affected by inflation), kids' education, commute time, whatever. Money is money, and a typical consumer only has so much of it per month.[/quote]

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