Makes sense. The thing that’s very different now vs. the 70’s is that wages are not keeping up with price increases. I don’t see any way that wages will go up very much for most people any time in the foreseeable future. This means that eventually asset prices will HAVE to come down substantially because no one will be able to pay the prices and banks have pushed lending standards too low already. The purchasing power to pay the current prices doesn’t exist and the prospects for the future indicate a worsening of the purchasing power scenario.

When you look at the younger generations and think about their career/income prospects, current asset prices look even MORE inflated. I too think there’s a high probability of us experiencing a Great Depression II, if not as a result of the current R/E downcycle then at some time in the not too distant future.

I find it funny when all the baby boomers say “my kids won’t be able to afford to live here”. Well, nobody’s kids will be able to afford to live here and that’s why there can’t be any buyers to replace the baby boom generation when their houses come on the market! The house-price problem will take care of itself and it’s started already.