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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Tradelite who wrote (11834)7/28/2003 9:39:25 PM
From: Jim McMannisRead Replies (1) of 306849
 
RE:"Even people who sell real estate every day don't know a dip when it occurs---it's only concretely visible long after the fact. Movements in the real estate market are far more stealthy than stock movements---there are no 15-30-minute charts to tell you where the pivot points are."

This for the most part is true. Realtors simply sell real estate. If the market slows or (god forbid) collapses they are simply out of a job but not a fortune.
Similarly, builders just build until they simply get crushed. They know nothing else and certainly few can time it.

On the other hand there are indicators, charts etc. that will give the trained eye a pretty good indea when the jig is up and the market is topping.

It appears these (bubbles-loose term) occur every 20 to 25 years. They don't just fall off a cliff either. More typically it's a plateau and a grind down. A liquidity thing like you said. "It's different this time" is often the typical clarion call but maybe it's different this time because of the slope of the linear regression line fitted to the soon to be parabolic curve up as evidenced in the last year.

Also the "financial planners told clients to just dollar cost average into stocks despite ridiculous valuations because "over time stocks go up about 9% a year".
So now you are telling us that houses will do the same or similar...over time...but what fool doesn't take into account that the next 10 or more years of appreciation may have already been factored into the price? Maybe 20 years.

Jim
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