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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (21838)	6/28/2004 4:11:06 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

Real estate bubbles traditionally run out of buyers. Once everyone has made their purchases, there is no one left to participate and the party ends abruptly. Though many may wish to buy additional real estate at excessive valuations, they are protected from disaster by their inability to find the resources needed to pay for it. Bubble participants often settle on an alternate explanation for the implosion, however implausible. The Southern California real estate boom of the 1880's collapsed in 1890 with prices declining 90%. Participants of the time blamed a flash flood in Arizona which had washed out railway tracks to the East Coast, interrupting rail service for two weeks. Can you imagine a two week rail outage between New York and Connecticut collapsing the Connecticut real estate market? Every real estate bubble has produced a similar myth to explain why the buying stopped. None of these myths ever look to excessive valuations as the cause.