That was me. Really? You don’t see people walking away from an asset that has substantially lost value? Yes people do have to live somewhere so why would anyone choose to live in an overvalued asset that is losing value, pay property taxes on it, pay homeowners insurance on it, possibly pay mello roos and HOA on it, while it loses value daily?
Look around you right now… The cost of basic food goods, utilities, water and fuel has gone up WAY WAY WAY more then annual rents. You can have inflation without strong rental rate increases. Similarly people with large cashpiles will make a KILLING on real estate when (NOT IF) when rates rise and real estate drops. It may be 2 years away, maybe 10 years away, maybe longer… However to think that people will not walk away is foolhearty. I am not saying it is not a good time to buy now, certainly better then 03 but the sytem we have in place promotes home ownership that is nothing more then a rental. By that nature it can behave in a more transitory nature because we enable it to be that way. You create a much more stable market buy demanding a much harsher equity stake.
