Wednesday, January 26, 2005

Irrational Exuberance in the housing market

Must read article about the real estate bubble.

2 comments:

David Foster said...

He makes some pretty convincing arguments, but when he says "Technological progress in the construction industry may proceed faster than in other sectors," I think he's on shaky ground. The construction industry is highly fragmented, geographically dispersed, and subject to a byzantine maze of local building codes...not exactly a recipe for productivity. And in many of the "other sectors," production can be moved offshore much more easily than in construction.

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Brian Ochsner said...

The real estate market is already tanking here in Denver. Foreclosures are way up, and people are shocked that the party couldn't go on forever.

The low level of financial literacy in America absolutely astounds me. If you look back over history even 25 or 30 years, you realize that real estate, stocks, and commodity markets go in cycles. What goes up will eventually come down.

I'm gonna sit back and laugh my ass off at these cocky, idiot realtors and mortgage brokers when their business tanks even more. I don't usually wish bad fortune on anybody, but I know one jackass in particular who's riding his high horse and is about to get smacked with a low branch.