A bit late to this thread, but having watched these cycles in LA, it was “different this time” back then, too.
In the 80s, we had the Japanese and the Iranians (TONS of money) pouring into the RE market. On the other side of BG’s interest rate issue were the creditors who were making 8-12% on their earnings, even in “safe” bonds and regular savings accounts! The stock market had started rising, and there was a general sense of panic as people were worried about inflation and being priced out of assets, so lots of people were heavily into buying real estate in those days, too.
Then, the market peaked in 1989/1990 (yes, it was a bubble), and prices fell anywhere from 30-50%, much like the crash in 2007-2009, even in some of the most desirable neighborhoods like Malibu and Beverly Hills.
There are a number of possible issues that could trigger another collapse. Our interest rates are near historical lows (meaning there is more room to the upside than downside), and national debt levels are so much higher now than they’ve been throughout most of our recent history…
