Interest rates?
I agree that prices are inflated. I expect more of a leveling off rather than significant drops. I do see a lot of price drops in areas where folks bought rental/investment properties and now want to sell. In the long term a 7% mortgage isn't so bad, and there are a bunch of low down payment programs. I recall the edarly 80's when mortgages were 18% and word was that you'd never see single digits again. Whether you live-in or are a landlord, deducting expenses and leverage in real estate are a strong favorable argument to have RE as part of a diversified portfolio.
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