Real Estate Bubble

[lentinman]

Death: Rebuttal:

This one is the easiest thing I have ever done in my life. His own quote is his own rebuttal.

"From 2001 to 2005, the average homeowner saw the value of his or her house jump by more than 50 percent. Many homeowners doubled, tripled, and in some cases even quadrupled their wealth in just five years because of exploding real estate values."

I'm not typing this Post in 2001. I'm not typing it in 2002 or 2003 or 2004. This board started on June 1, 2005. THAT is the ONLY pivot point I'm interested in. Up to that point, let's hope everyone made a fortune on their homes. Now, if they can just find a way not to lose the fortune they "made", good for them.

But, any reasonable (and experienced) person knows that nothing like that is sustainable. The very fact that it existed to the magnitude it did is precisely the same reason why the postulation is faulty going forward.

You could have said in March of 2000, "From 1992 to 2000, the average Tech stock investor saw the value of his portfolio jump more than 400%. Many portfolio owners made five or six or ten times their wealth in just 8 years because of exploding Tech stock values." Presumably, you would have used this argument to justify investing further into the bubble.

The NAS hit 5,150 on March 10, 2000. Today, 6 years later, the NAS is -56%. I rest my case.

Len