Yes, I also know middle class families who are living in million dollar houses. They can’t really afford them and are stressing out now. One family I know was “lucky” and they were able to trade up from another house right at peak. They felt that RE could only go up so they bought a $1 million house with I/O loan. I simply don’t think they’ll make it in a downturn.
Someone should also track the divorce rate in this coming downturn. Sad as it is, financial problems generally lead to divorce and broken families. That might happen under a democratic administration who will be blamed for the mess resulting from the excesses of the RE boom. People have very short memories.
