It depends where you are. Some properties have dropped by over 25% and that’s a crash by any measurement. Other places have dropped only a few percent. Some areas have no change at all. Currently the big price drop appears to be in new construction. Developers are making deals.
One thing that’s clear is that we are in the early days of the price drops. There is very little demand at the current interest rates and prices.
For me the really weird thing about real estate investment is that it’s an investment. Maybe we should stop looking at houses as financial instruments and look at them as places to live? I’ve done plenty of things with my property that supposedly hurts resale value. That means nothing to me as I’m not looking to sell. The things I’ve done are for my use, comfort, and enjoyment. Why anyone would be concerned about a hypothetical new owner is a mystery to me.
There are a lot of things that artificially push up the cost of housing. I’m not against safety standards or anything like that. However, when you are prevented from building a tiny home because of zoning restrictions something is wrong. There are places that restrict the use of solar panels, rain catchment, gardens, outside parking and on and on.
I wonder how much less homelessness there's be if we didn’t focus on the neighbor’s resale value?
The ultimate expression of real estate as investment happens in China. They’ve built whole ghost cities where nobody lives. The only function of those properties is to get resold. There’s even a popular distinction in China between houses you invest in and houses you actually live in.
I’m hoping this current downturn will refocus attention on what houses and apartments are actually for -places for living.