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 (27978)	3/10/2005 12:53:51 PM
From: mishedlo	Read Replies (2) of 306849

I can assure you that prices have not risen in my part of the country due to real estate speculation. Prices have risen because of job growth, population growth, and limited housing inventory to satisfy the first two factors. This might not be true elsewhere. I can assure you that you THINK you know the reasons. While what you say may be true is that really the reason? I doubt it. What it does do however, is eggagerate the nature of the trend. Over the long haul home prices can not rise above the wage growth of the local population. When that happens (and affordability is at all time lows), there WILL be a reversion to the mean regardless of supply, jobs or anything else. Show me wage growth and I will believe sustainability. If you can't then you are witnessing speculation eggagerated by the factors you mention. check this graph out: globaleconomicanalysis.blogspot.com Mish

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