Is This the Top?
Anecdotally, this feel very much like the top. Over the past few months I have seen numerous young people (early-mid 20's) buy houses wayyy above market prices and seemingly very far outside their ideal price ranges. I also know for a fact that these same people do not make anywhere close decent money and have to be levered to the absolute max in order to pay for these homes. This seems to be thematically indicative of the broader market. It makes me very nervous with interest rates rising. Are this all going to go up in flames? What are your thoughts here?
I think that while rising mortgage rates should allow for a correction in prices, a complete meltdown of the market is unlikely. A lot of people seem to be comparing the current market to that of 08/great recession - however, subprime lending is nowhere near as prevalent and we’re dealing with a shortage (not surplus) of homes that can largely be attributed to the pandemic. Are the insane increases / houses selling over asking price within days something to keep an eye on? Probably. And if they sustain throughout 2022, perhaps my opinion on a bubble will change. But right now I think fears are a bit exaggerated
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