Thursday, July 28, 2005

Why A Real Estate Crash Is Imminent!

I am currently reading about the bursting of the tech bubble, and the one think that strikes me, something I have thought about for the last few months, is how similar the present real estate market is to the tech bubble. I didn't believe a crash was imminent a few months ago, when many naysayers were forecasting it. But as crash failed to materialize, many bears became bulls, arguing now that things had changed, that traditional ideas about bubbles were no longer valid. This is the same as what happened in the tech bubble - the early bears missed tremendous profit opportunities, thought to themselves, jeez we must be wrong, and bought into the myth of structural change.

The tough part is predicting when the bubble will pop, and how will we guard ourselves? I don't own any real estate, but when housing markets crash, it will ripple through not only our stock market, but those around the world.

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