[adam_arthur]

Having equity can be important for:

1) Cash out refis. e.g. if you want to renovate, purchase a rental property or better yielding investment with the funds. Say you can take out cash at 2% rate, and buy a SFH rental with a 6% cap rate... you can build net worth faster (at more risk)

2) Being able to move without writing the bank a check. If you're underwater, you will have to pay out of pocket to sell, and then save a new down payment. If you don't ever plan to move, then this doesn't matter.

I consider valuation before purchasing property, rather than just whether I like it. But many don't, and that's fine too.

Commercial RE will definitely be driven by the fundamentals though, so I'm sure we will see cap rate expansion there unless rates begin to fall again. Residential can move out of line with fundamentals, for sure

[jurassic]

I think it makes sense to have a different approach for your primary residence vs your real estate investments. If I were a real estate investor, I probably would be hoarding cash waiting for deals, licking my chops at the prospect of another housing crash.