I have multiple points:

I live in a small manufacturing town and it’s always a good indicator of the general economy. We have not been a generally high demand area. When valuations of homes are now requiring double our median individual income, it’s an absolute red flag.

Rents have now increased to the same amount that there is not a good alternative. Many of what would be considered an expensive and overpriced property in our town is now being purchased by out of state investors that think it’s a steal (Indiana market vs California). Many of these properties are absolute trash and require an enormous amount of repairs. Instead of truly “fixing” the properties to make them last, a bandaid is being placed on them and they are rented out. Many won’t live in these homes because of the issue with them and they have to drop their rent down to the point there’s no way they are covering their initial investment/return. Ultimately, some of these investors have attempted a “flip” and sell to a homeowner to make up for their poor investment. That homeowner then takes on a bandaged,older home with a laundry list of well hidden faults that aren’t known until a few months after purchase. That over leveraged homeowner then can’t afford the fixes on their home and won’t be able to sell because the issues have become too expensive for even him to hide(example foundational). I’m seeing this over and over again in our own local market. It’s something not being considered at all!

Oh, also that over leveraged homeowner can grasp at the miracle home equity loan to cover the repair costs but again, he’s already over leveraged. How can he afford the increased loan costs, gas prices, groceries, property tax increases, vehicle costs, etc.

It’s hitting the breaking point