That’s a nice ROI – 100k equity turned to $1.1m minus costs… not a bad few years (non-)work. If a buyer can be found. Thanks for the link, I’ve bookmarked it.
I would argue that your two pillars have fatigued and would have given way earlier except that a new pillar was propped in – exotic mortgages.
Simplifying a bit, ultimately a sale is a transaction between one buyer and one seller, and as long as one willing buyer can be found the trend continues. One bit I often find myself overlooking is that each buyer’s situation is different. Someone with an existing SD home has the bubble benefit in his existing property and is somewhat insulated from the froth. A home-owning buyer relocating from a non-bubble area does not have that benefit, but they have whatever equity they built at their last location. It is worst for people like us, young professionals looking to buy for the first time without millions on paper from which to draw.
I recall talking to my neighbor across the street about my frustration with the housing market impeding my desire to buy. She told me that she was the same way when she was young. She wanted a house of her own, but her husband and she could not afford it. So, she started babysitting and saved up enough for a down payment. Yes, babysitting. I think I politely pointed out in this market a 20% down payment on the smallest house on the block would be ~$130k, and while I don’t know what babysitting pays these days, assuming $10/hr that’s around 13,000 hrs of babysitting. If babysitting 4 hrs a day, every day, it would take 10 yrs to get the down payment. I think maybe she started to realize just how far we are out of whack, but it did nothing to diminish her optimism… like you said, her attitude was you just have to “make it work.”
