Tuesday, August 29, 2006

Sell Your McMansion!!

This is a looong term graph of the value of existing homes in the US housing market. A similar bubble, to varying degrees, has occurred in housing markets across the world. I believe that some Euro countries like the UK and Spain have even larger bubbles, while Canada has seen a somewhat smaller one. Regardless, they are economic 'bubbles' nonetheless, i.e. price and supply rising too rapidly causing a subsequent collapse in demand.

Well it looks like the US housing market is really starting to take a turn for the worse, could be the biggest housing bust in 4 or 5 decades. Housing prices are sticky for the obvious reason that it isn't easy to move, so you still have time to respond to this. If you're thinking about selling a house do it now. If you're thinking about buying one, if it's at all possible try to hold off for a year or two, you'll likely get the property at a cheaper price, at least in real if not nominal terms. And don't listen to the majority of useless economic pundits out there, this will likely lead to a recession in the US, and a possible corresponding downturn across the globe, in the next few months.

P.S. that cover on the top of the post is about a year old now. It's when you start seeing stuff like that in the most mainstream publications that you should think about selling rather than buying...it's way past due now.


Blogger eugene plawiuk said...

If you sell your house move to Montenagro properties are hot there and moving fast according to the Wall Street Journal

10:25 PM  
Blogger A. Shah said...

I sense some sarcasm ;-)

12:18 AM  

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