The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (16109)	1/16/2004 12:28:48 PM
From: GraceZ	Read Replies (1) of 306849

Question: When you sell your house, are you going to "overvalue" it, like everyone else is doing at the time.....or are you going to "undervalue" it simply because you think it's the right thing to do and are feeling charitable toward those irrational buyers? If I sell a house that I feel is over valued I don't lower the price, that would be silly. But the reason for selling might be that I expect the market to fall to a rational valuation and I don't want to lose that gain by holding. You sell investments that you expect to be valued lower in the future and buy what you expect to be valued higher in the future. One can say that real estate is over valued when there is no rational way to expect prices to be higher in the future. Prices may in fact move higher after this point but this is because the market is made up of people who aren't entirely rational in the short term but in the long term, over thousands of transactions they are. There's more money to made trying to bet on things reverting to normal than to be made trying to discover how irrational they can get.

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