One of the reasons the prices are so high is because of low inventory. There's low inventory because Boomers don't want to sell. Boomers don' t want to sell because they a) can no longer buy property cheap someone else (normally, they buy in Florida or Arizona, but their housing prices are just as bad) b) they don't want to move into senior homes because of COOFID.I recently spoke with a friend in Toronto. He presented a case for a possible pause in Toronto real estate (which is basically a bear for Toronto).
Simply put, as the prices are flying so high, more people are getting greedy and putting their homes on the market. Simply put they want to cash out. As this occurs, you get more supply, which then reduces the competition for the homes and causes a price decline or normalization. I think this makes sense, the market needs to normalize. Many have been smart jumping into real estate with this money printing. But it's hard to know where the money printing stops and the frenzy begins. You'd have to be a master in econometrics to be able to gauge it, along with an economy that must be shrinking.
Either way, we just don't know where we stand. The rules of the game can change at any moment with stimulus spending or a fed announcement.
Also, interesting little strategy here to present against downside if you do decide to buy into the climb. As you buy a home with an over inflated price, hedge it with a Short on Real Estate ETFs to balance out your risk.
People also won't want to sell unless they absolutely have to because prices are high everywhere. If you sell, you still have to buy.
The only way the housing market will correct is with a crash, or with a return to complete normality (i.e. pre-COVID).