...I’ve heard the same story so many times since 2015. It never seems to materialize.
... until it does.
Even with good equity, if you lose your job or die, you cannot pay a mortgage. The essence of the article is that the market has again been flooded with liquidity, which is inflationary. That, driving up borrowing rates along with additional risk premium for Covid 19 effects, puts upward pressure on mortgage rates. Many buyers could qualify only at these historic low rates. Even a move from 3% to 4% puts many out of the market. Lower sales volume in a buyer's market = lower prices.
Then there are people like me that are retired, with no mortgage. We have a substantial part of our net worth invested in our home. On a fixed pension income but with having other investments hammered and with inflationary pressures in the economy, we may at some point be forced to downsize. Will there be willing buyers for our home at today's prices?
And of course much of real estate price escalation was driven by speculation. When people are worried about the future and offshore investment dries up will speculators leave the market? Especially if they cannot count on more buyers behind them leveraged with low interest rates and inflated equity positions.
Also, the general economy is rapidly moving into recession, some say depression. Corporate earnings will be hit very hard this year and many companies in many industries will be scaling back or failing. Many more job losses on the horizon. Fewer people in the market for expensive real estate = lower prices. Simple supply and demand.
All in all, it's a poor time to be a real estate speculator. This unique Covid thing with all its ramifications has not been fully discovered yet. Markets have turned and we are now waiting to see where the bottom is. Good luck!