I am asked this question constantly and often times it’s the first question. I have many thoughts on it but it all goes back to education and understanding real estate and its cycles.
First, and because of Dodd Frank, lenders are lending to the most credit worthy borrowers. The “best of the best” including those with high credit scores, high income and down payment monies are qualifying. For this reason I don’t see the likelihood that these homeowners will default and walk away from their homes. They will likely be able to weather any downturn in prices because of their financial situation. It is not necessarily values dropping but values dropping and people selling en masse which then can start a serious drop in prices.
The crash of 2008 was in large measure due to the fact that banks were lending to everyone. There was loan fraud on a scale we have never seen before in this country. The situation is completely different now. This is one of the main reasons I don't foresee a "large" correction coming.
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