I marveled at the REQ (real estate question) in this country (Canada) for years. I said circa 2015 that "the bubble can't last much longer".
It used to be that I couldn't grasp how regular people were affording these prices. I am a physician and I wouldn't want to buy a 400k home, let alone... the obscenities they are paying in the major metros.
Eventually, it occurred to me that it comes down to this: people are justifying it to themselves by saying, pshaw, don't worry, yes the price is insane but "real estate always goes up so eventually it will turn out ok". It really is that simple, that is how people are thinking about it.
And the answer to the question: what happens, how does it end? Very, very badly, terribly and tragically for a lot of people, when the bubble finally bursts. Many, many folks will endure financial hardship for the rest of their lives, be underwater, have to declare bankruptcy, etc, etc., with ripple effects on the broader economy, banks, etc.
That really is what is going to happen, unfortunately.
No politician wants to touch the issue because there's no solution.
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branchandroot
(no subject)
Date: 2024-05-19 05:19 pm (UTC)I marveled at the REQ (real estate question) in this country (Canada) for years. I said circa 2015 that "the bubble can't last much longer".
It used to be that I couldn't grasp how regular people were affording these prices. I am a physician and I wouldn't want to buy a 400k home, let alone... the obscenities they are paying in the major metros.
Eventually, it occurred to me that it comes down to this: people are justifying it to themselves by saying, pshaw, don't worry, yes the price is insane but "real estate always goes up so eventually it will turn out ok". It really is that simple, that is how people are thinking about it.
And the answer to the question: what happens, how does it end? Very, very badly, terribly and tragically for a lot of people, when the bubble finally bursts. Many, many folks will endure financial hardship for the rest of their lives, be underwater, have to declare bankruptcy, etc, etc., with ripple effects on the broader economy, banks, etc.
That really is what is going to happen, unfortunately.
No politician wants to touch the issue because there's no solution.