My company had a picnic today. I sat next to my boss, who was telling stories about the previous dot com boom.
Apparently, one guy who struck it rich at a major networking company decided to buy a house. His stock had done extremely well, and he now had 3 million dollars to his name. This guy was an engineering manager, a position that would probably net around $170k today.
He saw a house that he liked listed for $1.5MM. Since the market was "going up", he bid $1MM over, for a purchase price of $2.5MM. Since the stock was also "going up", he decided to get a mortgage instead of selling the stock and paying for the house outright.
Then, the markets - both real estate and stock - plunged. The stock dropped like a rock (more than 11 years later, it hasn't recovered) though real estate has come back. At the same time as the stock market fell, companies started having quarterly layoffs. I don't know whether he survived, but he certainly went broke and lost the house.