None of the above IMO.

IMO we will see slow steady (somewhat boring) growth.

Boring for the next 5 years is what I see coming.

Anyway IMO.

The crash happens when people least expects it.

To be honest, I have been an ardent observer of things happening and I can say for sure things have been pretty bad in general for middle class.

Jobs are being created but most of the jobs are lower paying jobs.

A lot of good jobs are being outsourced to cheaper places. A drop in unemployment rate, sure ..

Housing Market: The prices are being propped up artificially by Govt.

When life is going well, it is human nature to think everything will be fine–forever. As a society, I think Americans as a whole are, perhaps, the most guilty of this ridiculous mindset, and, unbelievably, many raise their kids to think that way (I know quite a few, and it hasn’t worked out well.) The reality is–everything will be fine–until it isn’t–as many found out during The Great Recession.

Imo, those who financially survive, and even thrive during the inevitable cyclical economic corrections they will encounter throughout their lifetimes–are those who expect the best and plan for the worst. That, of course, means different things to different people, but it is possible to position yourself in that way.

Whenever someone asks these questions, you have to ask yourself are you asking because you want to buy and want it to crash or are you a seller or owner and you want it to keep rising?

You can just scan the posts above and get the same read from the same posters as to where they stand since they have posted about the same thing before and their position is the same. This makes it so that the poster and most anyone is very biased as to what will happen when generally, most of the time, a lot of people are just flat out wrong. Also, the things you hear in the news are to sell news and sensationalize the situation when really, it’s all pretty boring so it’s not as bad as people state in the media. It’s all pretty stupid, but they are there to sell ads.

People have a tendency to also put too much in what they want and think that their position is the “correct” one.

Ask yourself where you are based on my comments above and be careful that you are actually wrong to think that way since you are simply choosing to see what you want to see or happen.

That said, a lot of people (mass media, business shows) have actually been predicting a housing crash so I don’t see that everyone thinks that it’s going to go up forever. People keep harping that interest rates will go crazy and inflation will be out of control and they have been wrong for the past 5 years already.

All that said, I agree with the general view of some posters that it will just move up slowly and that’s it. There is way too much cash on the sidelines (look at all time highs on stocks) for it to crash because if there is a drop, money will move in.

You also have to look at the most important thing such as rents. Rents are insanely high as been posted here and Rich (owner of this website) have stated very clearly with data that we are nowhere in bubble as in 2006-07…

I have posted also that buying at times maybe even cheaper than renting in the same area in the same house (20% down, tax benefits for higher income folks) so how can it go down or “crash” as some people want?

If you aren’t in dire straits, everyone in that situation (owners) will simply rent out their house instead of selling and I see a ton of these (not literally of course) in my area because their loan payments are so low.

Also, anyone who bought recently had very strong finances as the mortgage market was overly hard. Contrary to many other people perhaps, for many areas in San Diego and LA and the coast in general, I don’t think any “middle class” are really the buyers here anymore.

For 500-1 mil houses, the down payment (using how houses used to be bought), people would have to come up with 100k – 200k in cash. Most regular “middle-class” folks can’t get anywhere near that so the market these people support now are moveup buyers, foreigners (large chunk) and lots of highly educated, well paid folks. These people tend to have better jobs, better family support, and more savings so unlike when the bubble crashed with 0 down, ninja loans, these people won’t sell houses for less than they paid if they don’t have to, especially if they can rent it out.

Unlike 30-40 years ago (I was already in the states)…communities are not as diverse where the doctor is living next to the blue collar guy etc so certain areas will continue to slowly command a premium.

tl;dr:
Slow growth in desired areas mentioned (SD, LA, Coastal, Bay Area). No crash at all. Low inventory…all IMO.

I’ve been saying so:: Of course, this time is different than others..
It would be interesting to see how long govt can keep the rates low.
Japan’s rate is low for looong time..

[quote=wallers]Hi

Stage I: Hot to Cool: Active since Summer 2013*, Price growth is slides across the country as flippers lose money outright in the red-hot investor markets (NYC, San Francisco and Las Vegas); New home absorption rates – sales per community – are declining; investors slow their home purchases; total home sales decline year over year; developers lose pricing power, press outlets shift from positive to mixed about the health of the housing market.

Stage II: Demand to Supply: Small shocks convert demand pools into supply ripples. A first wave of investors begin trimming prices to get ahead of future declines; discounts increase to incentivize purchasers as purchasers increase their delays for better deals; developers reduce land budgets as cancellations tick up; major financial press outlets take a more negative tone toward housing lowering confidence overall.

Stage III: Deflation & Response: Falling home prices create a negative deflationary feedback loop that foreshadows a once-in-a-lifetime policy response. Deflationary economics take full hold; leveraged bets on real estate unwind in quarterly ripples due to the public reporting cycle & asset manager redemption schedules; willingness to lend shrinks; the broader consumer finally understands it is a bad time to buy a home, a shrinking housing market negatively impacts jobs causing recession; the estimated effects of never-before-seen public policy reactions determine when and where prices eventually trough.[/quote]

There is a lot of truth in the above that was particularly relevant to the previous housing bubble. I think what is different this time is the finger is very much on the pulse, or as some may argue, in the dike. 2012/2013 saw price increases reminiscent of 2004, but by 2014 it leveled off probably due to affordability issues. The point is it didn’t crash, or least it hasn’t yet. It is really anyone’s guess as to what happens from here on. There are too many variables to even take a stab at it. I personally would like to see a correction of the more recent gains, but in a civilized manner. If you look at everything that contributes to asset bubbles you need to ask two questions: What happens when they are removed, and when will they be removed? The logical answer is that the reverse happens—and possibly at a similar rate—when it is realized prices are neither sustainable, nor supported by fundamentals. For that to happen, things need to get heady. Since we just experienced the bubble of all bubbles, mini-me bubbles are met with complacency. So nailing down the inflection point, or turning tide, is much harder. Complacency, though, could be what continues to feed bubbles in other assets that then infects everything else. The writing is on the wall, but the script isn’t legible yet.

Right now, assuming with 20% down,even with historic low interest rates, it is cheaper to rent than to buy a house. At Least in my area: SR/Sabre springs..

From what I experience/observed, rent never increased drastically as some people mentioned in this forum.

A 2 BR/BA condo in Mira Mesa was almost 1600/month 8 years back and I see the similar rate today as well.