Next point to address is TG personal experience. He was one of us following things much closer than most. He’s a sharp, opportunistic guy and his expereince does not match the average. Some people always beat the market. He caught the bottom and got himself a sweet deal in a market that was particularly hard hit and overshot what it should have.
More reasonable price for that was probably more like the mid 300’s vis a vis rent vs buy. Then he invested in improvements on a house that was not cared for. Fake lawns dont grow on trees or lawns nor does anything else he put into making his house his own. End of the day a more typical base price for the cost of that house as it is should be closer to $400K.
That was 13 years ago. At just over 5% /yr a house will double in 13 years. Thats only marginally more than what we have truly expereinced in inflation. Time passed and we got older. Interest rates are almost half of what they were back then also.
The fact that houses have more than doubled in 13 years isnt so astounding as to how it happened and usually does.
We would like to think homes go up gradually over time in a even climb. They dont! At least not here! They muddle, they climb slowly than they gap up astromically in a very short period of time. It happened between Nov 2003 and Feb 2004. It happened again between Nov 2020 ans Feb 2021. Its the way things work here.
I will happily take your bubble bet right now! Bubbles burst they dont slowly deflate. Im not sayiing prices wont slow, flatten or pullback but barring a cataclysmic event like a natural disaster or foreign invasion there will be no burst
About 10 years ago I wrote about what I thought would happen and it did. There are 3 main levers. Passage of time, Interest rates and inflation that will make what seemed unreasonabvle pricing levels reasonable again. The last time it was mostly time and interest rates with a little inflation. This round it inflation and time with sustained low interest rates bring us back into balance.
There will be better opportunties ahead but anyone expecting 20% + declines in the better areas of SD will be sadly disappointed. I dont follow TG’s area as closely but know prices there have not gone up there close to what they have here. They dont have the desireability up there to the big money relocators we have here but folks from here will increasiong get pushed up there to commute. So I’ll go with no more than 20% there as well.
