RE Journal - 9.30.2005 - Poll Shows Homeowners Expect Continued Price Increases
NY Post - 9.20.05 - MBA's Doubt Real Estate
Two quick pieces here expressing vastly different opinions. Homeowners, with nearly a decade of rapid appreciation behind them are expecting continued price increases. At the same time, MBA's from Dartmouth, having studied markets and investor behavior, are increasingly wary at the prospects for continued appreciation.
The Journal piece reminds me of one of my favorite visuals regarding market psychology and I want to share it here to start a discussion:
This chart was created by Dr. Chris Cagan, Chief Economist of First American Real Estate Services. We'll discuss this in future posts but pay special attention to the "bubble psychology" area of the chart. Consumers have shown time and again that they wrongly assume the current trend will extend into the future. Hence, at the end of an uptrend consumers are their most positive and aggressive when they should actually be wary and defensive. Food for thought.
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