09-11-2006, 08:21 AM
Simple econ 101, the market is controlled by supply and demand. There is greater supply and less demand today compared to last year so prices are going down. The speculators have swamped the market with their spec houses and now they will reap their bitter harvest when they can't sell them for a profit.
While it is true that emotions and sentiment can affect demand, this is only in the short term. Interest rates also affect demand. The higher the rate the less demand there will be. The analysts which you are so critical of are just doing their jobs by providing information to prospective buyers. They don't control the market.
If what you say is true, that the market is controlled purely by emotion and hype, then the RE collapse will be incredibly huge and it will surely happen because the majority of analysts say it will. Mind you, I'm not saying that it will. I'm just expanding upon your reasoning of "self fulfulling prophesies".
To conteract this bubble all we would have to do is get all the analysts and reporters to publish nothing but good news and opinions. Actually this may work for a short time but when the sh*t hits the fan watch out! The collapse will be even bigger. Wallstreet analysts and reports have got into big trouble for doing just that.
Rabi,
I applogize for getting personal. It's just that you epitomize the cheerleading realestate bull. I congratulate you on 14 years of success but think you will have some tough times ahead. Laugh now but you may not be so jolly in a few years.
While it is true that emotions and sentiment can affect demand, this is only in the short term. Interest rates also affect demand. The higher the rate the less demand there will be. The analysts which you are so critical of are just doing their jobs by providing information to prospective buyers. They don't control the market.
If what you say is true, that the market is controlled purely by emotion and hype, then the RE collapse will be incredibly huge and it will surely happen because the majority of analysts say it will. Mind you, I'm not saying that it will. I'm just expanding upon your reasoning of "self fulfulling prophesies".
To conteract this bubble all we would have to do is get all the analysts and reporters to publish nothing but good news and opinions. Actually this may work for a short time but when the sh*t hits the fan watch out! The collapse will be even bigger. Wallstreet analysts and reports have got into big trouble for doing just that.
Rabi,
I applogize for getting personal. It's just that you epitomize the cheerleading realestate bull. I congratulate you on 14 years of success but think you will have some tough times ahead. Laugh now but you may not be so jolly in a few years.