I've seen all this before (market highs and market lows), and it can change on a dime. Here's an example that 'may' parallel todays situation, or rather the potential future RE market.
Some 36 years ago (I was 27ish) : ten years into my RE career, raised in the industry by a father that managed the real property of deceased estates. By the age of 15 I had already attended circa 1,000 auctions and, through my old man, knew every prominent RE principal along the east coast. So, like most young bucks at 27, I thought I knew it all. Hu! The market was pumping back then (mid-1970's). I'd made a fortune buying, renovating and selling. The world was my oyster: the boom times would never end - I thought. I was filthy rich. Then came the crash. Interest rates doubled within 4 months and the value of property fell by circa 40%. Out of the six properties I was still holding I was only highly leveraged on one to the tune of $250,000. Big money in those day's. In any case to finance that debt I had to sell everything, some for half price. In the end I was debt free, but had lost EVERYTHING. A salient lesson, which took me ten years to recover from. A mistake I would not and did not repeat. Lesson learnt!
Today, I'm watching a similar market unfold. The TV is awash with young property moguls flipping RE. They are highly leveraged and under the illusion that the good times will last forever. They have not seen a property market crash in their lifetime - the last being in the early 90's. I'm seeing young couples borrowing huge sums to enter the market, thinking they and their jobs are secure. And while history does not always repeat itself, given the change in world economic dynamics, there is one thing that never changes: and that is economic cycles. She goes up, and she goes down. No matter what anyone of age in the RE industry is saying in public, behind closed doors they are all saying the same thing: sooner or later this market will end in tears.
So be aware. There will be winners and losers. The cashed up swoop and the highly leveraged fall.
In conclusion, I came on this property forum to help folks, given my experience in the RE industry. Its a purely altruistic gesture. I make nothing from it. So beware any who think to insult me or make gratuitous return comments. I am the RE soup Nazi. There will be no RE soup for you. The 'ignore button' will prevail
