The problem lies in the fact that the appreciation may not be real... it only works if you sell before the collapse.It is nuts. But we've been able to say its nuts for a long time. I remember in 2003 I guy I know (fairly well to do, owned a finance company so wasn't (or shouldn't) have been clueless around economics) was absolutely convinced prices had become so outrageous in Toronto he was going to cash out. Buy back in in the coming crash. He sold and rented.
At time, given he was credible and prices did same crazy, I wondered if he was right. Good think inertia kept me in place!
Detached houses have gone up about 250% since then. That's a heck of lot. You might counter that the DOW has gone up 267% however two things 1) You need a place to live so rent would have severely cut into the sell and buy stocks scenario (the benefit of the house isn't just appreciation, its also use), and 2) unless you are mortgage free, you're getting leverage with the house not available (to that extent and as inexpensively) in the shock market.
One strategy works well, buying a home to live in for your entire life and not caring about the market.
One strategy is fraught with risk... trying to flip and flip leveraging yourself more and more thinking that you can predict a downturn and get out in time. These are the type of people I know plenty of because they've been my client base for years.
Myself, I sold our home and found a rental townhouse for $1300 a month to sit tight in until wife retires. We are saving substantial money every month. I don't worry what the market does or need to try to time the market. We can leave TO any time in any conditions. The rent is trivial and we carry no debt of any kind and have investments that do well. As far as our hypothetical economic position, we are about even, however that should shortly change since the latest interest rate hike is going to push the thousands of homeowners who were on the cusp of disaster over the edge. If that happens we will be way ahead. If not, meh being even is better than being down.
That said I'd be quite happy to see the market correct along with municipalities opening up their long held single family strongholds, because I would then be well positions to start building infill 4 to 12 unit) multiplexes to sell... with current prices it is too costly for the typical investor.