What factors contribute to real estate dips or crashes?

[Alessandra Verbena]

It seems like the conversation always starts with... Will the real estate market crash in 2020? Or, will it crash in the Bay Area? Or will housing prices dip in California? I would like to pose the question from a different angle: What are the numerous factors that can lead to an overall decline in real estate market? I think this could help people gauge the factors that precede a dip and how many of those boxes are checked at any given point in time.

Please name as many as you can. For example, we know that interest rates are one, what are some others?

Also, I would like to pull the knowledge from long-term investors who have memory of previous declines in real estate that were as marked or less marked than 2008, so we don't just rehash the most memorable real estate dip in recent history.

Thanks in advance.

[Marc Winter]

Federal legislative policy (meddling) with a free market and the Federal Reserve Bank (which isn't Federal nor a real 'bank') with their interest rate manipulations are the two biggest factors affecting housing.

The Fed cannot decrease interest rates any time soon to further stimulate the virus-stricken economy, (unless we go to negative interest) so their only weapon left is creating money out of thin air.  

That course will effectively monetize the national debt and further drive investors into real assets.  Expect further rising prices in real estate, stocks, and other items of real value, because the US $ will buy less and less.

Just remember (and be prepared): kicking a can down a road works...  until you run out of road.

Hold on tight--it's gonna get bumpy.