The foundation of wealth, currency, and value in real estate.
Real estate is never going to crash. It never has and will not. It’s impossible.
Yes, corrections happen, but the general market will not crash completely. A $500,000 house will never become a $5,000 house. It won’t make a difference unless everything else is devalued. If real estate sells for “pennies on the dollar,” the days of penny candy will return, and you’ll be able to receive change from McDonald’s once more.
Real estate is the foundation of all other values in the world. Everything else would suffer if real estate prices fell. It will not, however, happen. A 5000 square foot house will never sell for $5,000, while a Mazda sells for $25,000.
If prices started to fall, money would pour in so fast that your head would spin. This is how capital from Japan, Germany, and dozens of other countries would flow.
The local market “corrects” itself.
The market was severely harmed when Boeing ceased operations. “Will the last person leaving Seattle, please turn out the lights?” read a billboard. So, where has that market gone? What happened when the locals left?
Canadian investors bought up properties and made millions upon millions of dollars. I’ve seen some corrections in different states over the last thirty years, but nothing that resembles a crash. I have books about the coming real estate crash of the 1970s, 1980s, etc. It will never happen. It’ll never happen.
The real estate market doesn’t crash. Not on a national scale. Not without a complete meltdown of everything. The same stock market analysts who predicted a real estate crash would throw themselves off a cliff. And believe me, the stock market, commodities, and other financial markets would have collapsed long ago.
Local markets can now correct themselves. California has a reputation for being expensive. It updates itself, and money flows to other states. A few years ago, 100,000 people left California every month following the quakes. 40,000 of them were on their way to Utah at the same time. Then the values are restored, and everyone returns to the beach.
I’m talking about the residential market and only the residential market. Wider swings can occur in commercial real estate and other areas. As seen in New York years ago, hotels and shopping centers, as in Denver a couple of decades ago, can be overbuilt.
However, it corrects itself. An investor’s plan and path should not be one of panic.