Real estate isn't supposed to be a speculative asset. Yet we have learned over the years that it absolutely is. People have taken every dollar the banks and lending institutions will give them and bought the maximum they could get. Everything is all good while the market is moving upward. Nothing to worry about. But then one day, something changes. Oops.

You can't have prices escalating so high and people buying into these homes with maximal debt and not have it backfire. It's inevitable. Most people would say it's ok because prices will just come back up. That's most likely true. However, what they haven't thought about it how on the way down, people will be destroyed. Happens every single time.

Do you know anyone who went way overboard on their purchase of real estate?