One thing I noticed over the years about people and real estate is that they seem to lose perspective about the money. It’s almost as if they see the dollars involved in RE as being equivalent to Monopoly money or some currency other than the same greenbacks we use to buy our groceries.
Many people are incapable of saving $20,000, yet we visualize a $20k loss on a condo as no big deal. I especially see this trivialization of a dollar among appraisers, who often get into treating the values they conclude to in an appraisal as if it were some abstract number with no basis in reality.
Assuming this trend plays out these losses we’re seeing right now will continue to accrue. Once we start reaching and surpassing a 25% decline scenario there will be some people who will be looking for a 15th floor window to jump out of, because their lives will be ruined. The party leading up to this point was a lot of fun but the hangover is going to be a killer. Literally.