Well that 'bubble' has been going out of control since about 2001, so its got to stop at some point. I'd just be concerned if I owned one of those higher end priced homes. They are the ones that typically lose much of their equity value quickly. I just got back from Australia, where we have some properties as well, and I noticed that their 'bubble' which didn't burst, but has deflated a bit has caused some properties in more expensive neighborhoods in Melbourne to drop 30% of their entire price in 3 months. I saw examples of properties that were selling for $900,000 in March, now lucky to get $600,000 on the markets. But average priced homes seem to hold firm on their gains.Originally Posted by scrow9
I've been doing real estate a long time, so this is a freak thing we are seeing. Just don't fall into the habit of thinking that these sorts of equity rises are 'normal'. They are far from normal, but when money is so cheap (ie. low interest) people often get silly in mass numbers about what they think they can afford. When those interest rates start creeping up, and they realize that they really can't afford that mansion they have anymore, then there will be some serious bargains for those wanting to scoop up foreclosures.