Quote:
Originally Posted by split_joel
I would not be 100% sure, I honestly think over the next year or two the dollar is going to make one hell of a come back then commercial real estate is going to crash and inflation is also going to kick in from all the debt consumed in such a short time, in 3 to 4 years the economy will fall twice as hard as it is now.
|
I've felt for a while that the real estate market needs to dip if we are to have long term stability. Right now the average wage in the US is $16 per hour. The average home costs 178K. That means if the average person puts down about 10% on the house and gets a 5.5% fixed rate the house payment alone will take up about 60% of their income and that doesn't include taxes or insurance. So the average person can no longer afford the average home. So what ends up happening is they buy it anyway and other things that they may have paid cash for in the past (cars, vacations, big screen TVs, ect) they now have to use credit to get. Things are fine for them until they lose their job or get sick or hurt then big trouble sets in really quickly.
Until the average home gets back to where the average person can afford to own it, there will always be the risk of real estate crashes.