Quote:
Originally Posted by Slava
That is what I'm saying. The conditions were ripe for a bubble in 2007 (particularly) and we are now three years removed. Not saying that prices can't go down from here, but prices are certainly not sky-rocketing at this point.
The lowering of the interest rates should feed the bubble (and as a result delay the bursting). That didn't happen here though because the rest of the economy was also dropping and so what we've seen is more of a "deflation of the bubble" as opposed to a "popping of the bubble". (I'm using the word deflation here as in a balloon and not in its economic sense).
Its also important to recognize that a correction in prices doesn't equal a bubble bursting either. Corrections are part of the natural economic cycle and shouldn't induce panic and hysteria...which is what takes place in the sector where the bubble bursts.
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Regardless though I would still bet my house that the next 20% is down and not up. Just a matter of time. Might not be a bubble but I would make this bet. Then again what is a bubble these days.....maybe 20% gets you there? That could incite enough panic/emotion that it just snowballs from there and when people go to renew they can't etc.