<i>*** I have some younger friends who I BEGGED to start buying RE after 9-11 when rates fell to all-time lows a few years back...</i>
Why would you recommend buying real estate when interest rates are at all time lows? Since real estate values have an inverse relation to interest rates, isn't that the riskiest time to buy?
BTW, I thought this article in Fortune was pretty good. Check out the tables for the details on their price to rent macro analysis.
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According to our calculations, prices in most markets will fall by double digits over the next five years.
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But if you read the chart, some markets aren't overvalued at all, including Detroit and Cleveland. Since each market is made up of thousands of thousands of homes, even if the average home in a market is over-valued, that doesn't mean they all are (but bargains may be real hard to find). Use the same benchmark, price to est. rental income, to give you an idea of whether any individual house is a good deal or not.