Basically, WT, if people don't want to buy houses, we can't stop them. At the same time, if they want to buy houses, we can't stop them, either.
For a little perspective, we are only 50% of the way back to the prices of 2004-2006. And, today's buyers are FAR MORE Qualified than they were during the last boom.
We're definitely on an upward movement...whether it's good or bad remains to be seen.
I do not see the Bay Area prices going down. Possibly the increases slow down. The buyers today are different than in the last boom. They are coming in with larger down payments, stronger credit history, fixed rate principal and interest loans vs. option loans or interest only and teaser rates, and they are truly capable of making the payments. Our economy is very strong combined with low interest rates is fueling the current boom. Today is the most affordable time in 30-40 years to buy a home. Home ownership is often less expensive than renting. Check our my recent blog concerning the lack of homes for sale in the Bay Area. http://leesellsmore.com/RealtorWebPage?template=embed&cu
Keep in mind, Case Shiller reports on a national level, not a local level. The Bay Area is an entirely different market when compared to the rest of the nation.
These are called cycles and they are here to stay. If you are purchasing real estate, it's not just how much you pay it's also how long your in it. For those who are financing, money is almost free at these interest rates. If rates go up one percent, you will lose 10% of your buying power. There is also a ton of cash too.
Real estate has a track record over 200 years that you can see on a flow chart. Some companies that you invest in on the stock market are no longer in business.
At the end of the day, everything in life is a risk, enjoy the ride while you can. The ride is very short.
Lastly, (OPT). Only positive thoughts. Everything else is a waste of energy.