All real estate - both residential and commercial- is at least 50% overvalued - meaning debt is MASSIVELY undercollateralized at this point.
“All real estate - both residential and commercial- is at least 50% overvalued “
The term “over valued” is subjective and especially so when it comes to a commodity such as real estate. A property is “worth” whatever someone pays for it and if it is financed then the lender assesses it and puts a real and current market value on it. They then hedge the loan by requiring a down payment which is supposed to cover any depreciation should they be forced to foreclose.
The problems in 2007 arose because loans were being made without income verification and no down payment.
Really?
Where did that opinion come from?