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I think we’ll see the housing market weaken and some investors / flippers may lose money, but not the kind of broad credit contagion we saw in 2008 since lenders have still kept their credit box much tighter this time around. Prices may fall in some markets but nationwide averages won’t come down much, they’ll just bounce around a bit.
Neither. I think we’ll just see average appreciation slow down a lot relative to the variation and risk. Instead of an average growth of 20% with most local markets growing 10-30% like last year, the next 10 years might average more like 0% with individual markets returning -10% to 10% in any given year
I don't think today's situation is similar to either of the most recent housing busts (1989 and 2008). Interest rates in 1989 were at 15% so we have a long way to go there. It's just that we've been spoiled with seeing really low rates, so this uptick feels worse in comparison. And 2008 was tired in poor lending practices which have now been solved with more regulation and underwriting standards. We're definitely in uncharted territory here, so any speculation you see on where the market may go is just that: speculation. My personal opinion is with the laws of supply and demand. Home buyers will tell the market when it is overpriced.
Personally I see a very flat road ahead. Higher rates may discourage debt financing, however with demand still substantially outpacing supply it would be pretty hard to imagine prices falling at a substantial level nationwide.