Many people made a lot of money on smaller houses they bought to live in. Then they figured that if they could make $100k (after a number of years) on a $150k home, why not scrimp to buy a $300k home and make $200k? They thought that what had happened would continue to happen.....
It will happen again. But you have to be able to “time the market.” Most folks don’t because they buy high and sell low, instead of the other way ‘round.
“They thought that what had happened would continue to happen.....”
Well, in some places it has. We bought our first home here in Northern California in1968 for $30k. Lived in it for 12 years and sold it for $190k. Bought an acre and a half and built a new place (with 18% money, thank you Jimmah Cahtah) for about $325k. The house across the street just sold for $2.1 million. And thanks to Prop 13, our property taxes have remained low so in retirement we can still afford to live here. California real estate has always been good, just better sometimes than others.