Well, the nice thing after the wipe-out is that people will buy homes again for one reason and one reason only - to live in them.
Ah, the old days...
It's funny to me too that the biggest bubble markets are the cities with the cheesiest, flashiest, live beyond your means, get-rich-quick, uneducated lazy losers - Miami, Las Vegas, Phoenix and Los Angeles. Couldn't be more different than quality, hard working folks in Kansas, if you know what I mean.
Good commentary on the crash. Here's some out-takes...
In 1998, I began loudly warning people about the approaching dot-com bust. I had analyzed the situation and knew the bubble was going to burst. There was no doubt in my mind, because I looked at the fundamentals of these internet companies' finances... the internet startups that had stock prices in the billions of dollars but had sold no products, had no revenues and had no customers. You don't have to be a genius to figure out that bubble was going to burst, and something very similar is happening today in the housing market
First, let's get back to the dot-com market, because, in hindsight, it was easy to see that it was a bubble about to burst. Think about what you were doing in 1998, 1999 or 2000. You were probably invested in the stock market. You thought you were doing pretty well. You thought you were building up a huge retirement. Everybody was getting rich, at least on paper.
In a sane, normal housing economy, that's the thinking that's going on. But today in the United States, especially in key cities, there's something amiss. Increasingly, people are not buying houses to live in them, nor to rent them out. They are buying them for speculation. They're buying them because they are anticipating a price increase. They're buying houses for the same reason they bought stocks during the internet boom. They don't even care what it's for. They don't care if the house is a place to live in. It's just a way to double their money.
December 30, 2005
Posted by blogger at 12/30/2005