Just Like Japan
In today's New York Times: Speculators Seeing Gold in a Boom in the Prices for Homes. Two quotes from the article reminds me of the real estate market in Japan in the late 1980s:
Like the day traders of the 1990's dot-com boom, people are investing in a market that seems to just go up.
...
"It seems that real estate always goes up," in the long term, Ms. Finley said.
The Japanese (especially around Tokyo) also believed that real estate prices could only go one way - up. They were wrong. And when people in this country start believing the same thing, it makes me worried for the entire economy, because a severe downturn in the housing market could have widespread repercussions throughout all financial markets.
Posted by Tom Nugent at March 1, 2005 08:36 AM