Why real estate could crash deeply

The current real estate market may be artificially propped-up by a system of finance & regulations that could collapse at any time. Home values may further plummet if interest rates rise in any significant manner. In times of currency-devaluation (where hard assets such as real estate should appreciate) the uncertainty surrounding the political and social situation means it may become increasingly difficult to sell fixed assets which are not portable (blood in the streets).

Let’s examine the situation: real estate appears to be at all-time low interest rates; without Fannie Mae & FHA & the VA there would hardly be this much of a real estate market. There is/are a record number of foreclosures in many areas which are not selling. Mostly, it is the well-financed investor who is able to purchase real property. Wanna-be investors and current property owners with no rental management experience are basically screwed out of many opportunities without cash infusions and high-equity(70%) positions on existing properties. Appraisals continue to be a key problem for many lenders and real estate agents looking to close transactions even if the buyer is financially qualified to guarantee the gap between purchase price and loan value. Many home owners are stuck in their houses and cannot re-finance under the currently low rates due to massive the massive red tape.

On the other hand – perhaps after years of free-market abuse that has led to this situation, only those who meet the current governmental/corporate hurdles are best suited to buy homes in this environment? Perhaps real estate values will skyrocket along with stocks, equities because The FED policy is actually working?

… Do you have an opinion? Your comments are appreciated; this forum is now open to reasonable comments.