/biz/ - Business & Finance

Real Estate Prices were propped up by the widely available credit. As we move into a recession and possibly depression credit will not be widely available. Especially in locations where a starter home requires a jumbo loan. The pool of buyers in these locations will get dramatically smaller. There won't be hyperinflation because banks and financial institutions will hoard the money in order to shore up their own balance sheets and regain profitability.
Banks and financial institutions will start hoarding money in order to shore up their own balance sheets and regain profitability. Meaning banks strict lending on jumbo qualification are here to stay.

Only the top 5% making 250k annually with 500k+ in savings will be able to take advantage of the low interest rates with jumbo loans.

On top of that people who went on forbearance with jumbo loans do not qualify for the cares act. Meaning the banks can do whatever they please once the forbearance period comes to an end.

Real Estate in overpriced cities with Jumbo Loans will see a massive foreclosure and price adjustments.

Strict Lending requirements + no forbearance protection from the government + massive unemployment + pay cut = small pool of qualified buyers. Even with a limited inventory most houses will not sell = price adjustment.

Prove me wrong.