Name:   MartiniMan - Subject:   Crazy high real estate prices Date:   4/5/2022 10:06:46 AM

I was in the market for a home with better water but I am now officially on the sidelines as I have no desire to buy in what is obviously a real estate bubble that will eventually burst and lots of people are going to get burned, especially if they finance a lot of the purchase.  Most mortgages have a requirement that you maintain a minimum loan to equity value.  So take the home I show below.  Around on year ago that home value was estimated at around $800K.  It is on the market for $1.6M right now.  If you bought it with 10% down and its value drops to a more reasonable $1M or less your lender is going to require you put in more equity. 

Nothing against the house.  It's very nice and I would probably consider it for $1M but not $1.6M.  I hope the person who buys it for that price pays cash and can wait 20 to 30 years to get it back to that value, otherwise they will be taking a huge bath if they have to sell when the bubble goes away.  And I say this knowing I could sell my current house for far more than it's worth.  But I am not going to be able to wait that long to get my money out of the new house.