Emotion is a big player in prices. The purchasing of recent years has been a stampede of irrationality. Everybody and his dog were making a ton of money on their house without doing a thing. People went crazy and paid whatever they had to for fear they going to get priced out. When reality begins to sink in, the stampede is going to go the other way.
There has been a lot of irrationality among otherwise smart people. A relative of mine just paid 550K for a condo in the LA area. It was a first time purchase. They had to streeeetch to buy it. Then they put in a top of the line real wood floor and new stainless appliances even though the old ones worked just fine! These are very smart people but I’m worried about what is in store for them.
