Monday, December 05, 2005

44.7% of Americans are in Denial

The results of this survey really make me laugh. Apparently, a whopping 67% of Americans believe there really is a real estate bubble ('yes Virginia, there really is a bubble') and 44.7% think that no one should talk about the real estate bubble for fear of causing panic selling. ROFLMAO! Sure, right, 'maybe if we don't talk about it, it will go away.' Never mind all those bulls who claim that panic selling can't happen in the real estate market because "real estate isn't like stocks", "people live in houses", "real estate only goes up", etc. This is nothing short of mass denial.

Then the survey results go on to say that the bubble will burst due to a "self-fulfilling prophesy". Well of course it will! Aren't ALL markets the result of a large number of human beings getting together to buy and sell things? And isn't all human buying and selling behavior the result of human psychology? So if someone realizes that housing prices are ridiculously high, he won't pay the price. And if a lot of someones come to the same realization, then the market as a whole is affected. Dismiss it as a self-fulfilling prophesy if it makes you feel better, but it all ends the same way. Then there is the fact that it is ok for there to be a self-fulfilling prophesy when prices are going up but when it works in reverse so as to re-establish a market balance then that is bad.

Some choice quotes:
"Over two-thirds (67%) of Americans believe there really is a real estate bubble, according to a recent survey by, a leading real estate advice and information site."

"...a large percentage of respondents to the survey (44.7%) indicated that people shouldn't talk about a real estate bubble because the more they talk about it, the more likely there will be panic selling that will lower property values. The respondents are concerned that simply discussing the real estate bubble might create a self-fulfilling prophecy."

"Of the survey respondents who believe there is a real estate bubble, just 18.1% believe the bubble will burst within six months. Accordingly, the other 81.9% of those respondents who believe a real estate bubble exists think the bubble won’t burst for at least six months. Another 41.3% indicated that the bubble won’t burst for at least a year and the balance (40.6%) predicted a real estate bubble would burst six to twelve months from now."

"Respondents voiced varied opinions on the topic of a real estate bubble. “The real estate bubble has got to burst. The housing prices in the suburbs are outrageous,” wrote a survey participant who lives outside of Washington DC."


Blogger David said...

"and 44.7% think that no one should talk about the real estate bubble for fear of causing panic selling. ROFLMAO!"

Yikes. The word is out. The bubble is bursting. And yes Mr. Lereah balloons can also pop.

Dec 5, 2005, 8:43:00 PM  

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