Inflation solidify home price stay at top level.
Yes, when FED knows (many ignorant people believe FED does not know anything about economy !) cracks are going to hit economy, they stop raising rate so that they can take control at worst period !
Seemingly right, but it does not work like this way. You will see year 2022 home prices shoots up sky high with increase in interest rate.
Marcus is right here, inflation increases home prices. Inflation solidify asset prices, holding same level or up raise level as inflation continues to grow (Money value decreases).
This is very common for all MV,SV,CU and RBA shacks. People are buying dilapidated shack homes with high cash down payment. Reason: No lender will give any loan more than replacement insurance values of shack homes.
This means 4M shack homes loan must be less than $750k (150% of insurance replacement value of home), and rest must be stock RSU/ESPP/Options…etc. In short, loan leverage is very low and defaults are very rare at MV,SV,CU and RBA areas. There is no reckless (or very less such) loans after 2008-issue.
This is silicon valley, any one holding espp/rsu would have original value $500k, but current value may be multi-millions by growth of AAPL, GOOGL, FB, TSLA…etc so many money makers. Silicon Valley (most USA) is stock economy. Real estate follows stock with bond value (hardness) with it.
Even if there is stock market dip next week, market keep going further bullish new ATH until the last rate hike of FED. Until then no homes in bay area coming down, but keep going up and up, never stops its growth. Entire stock market will come to an end 3 months after the last rate hike, then real estate shows max range 5%-10% as lot of the owners are high cash down payment homes.
Okay, as usual, I do not plan to reply any questions endless way. I saw really valuable/constructive discussion in this real estate forum after a long time, tried to add value to it.
Whether anyone believe it or not, it does not matter !
Good Luck again, going to sleep mode now.