I don't know why people keep talking about "when" the real estate market is going to get back to "normal". It has not been "normal" since 1945 and the end of WWII, so get use to it. What drove the real estate market after 1945? Answer that and then look at what has changed since and you will see that the real estate market will not be getting back to "normal", it will be getting back to the "real" normal.
Now let's look at the facts. What drove the real estate market after 1945 was the fact that a lot of hard working people were having a lot of kids. Remember the baby boom? These people needed homes and bigger homes than the ones they had in the past. Further, people were moving from rural areas to urban areas. This alone could have caused the real estate boom all by its self. Drive around rural USA and you will see all kinds of abandoned homes. This was a one shot deal that can never happen again.
Now back to the boomers. These were hard working responsible people who were having all those babies. Now who is having the babies? You know. Most are to the very poorest, people who will never be able to buy an expensive home. We have more people in public housing than any time in our history. What did the boomers do? They moved to the suburbs where they had better schools and safer neighbor hoods. To keep the criminals from following them to the safe suburbs, they bought larger expensive homes. This was sponsored by government policy. It made for a real estate boom, but at what cost? People who are having kids today can not afford the expensive homes that those after 1945 could. Isn't that clear? The people who were having kids after 1945 were hungry for education and worked hard. That is not the case today. Look around. 40% of our kids don't graduate high school, while the rest of the world acts like we did after 1945, hungry for education and technology. Ever hear of the "internet".
There will always be some people at the top who can afford larger more expensive homes, but here we are talking about the average person. Besides government policy that encouraged spending more of our wealth on homes, many people thought that a big expensive home was the definition of a better quality of life. Now we do not have the "national wealth" to squander on big expensive homes. Looking backwards, it seemed logical. People did not move around much and had extended families all in one place, but not now. I don't think we will ever see a time when we spend so large of a percentage of our smaller wealth on homes. The standard of living in the USA is going down as is the quality of life. That can only mean one thing and that is that growth in the real estate market as we have seen in the past is over so "Kiss Off The Real Estate Market". The future will be a "new" "normal".
