If people, in general, believed in bubbles then you wouldn’t *have* bubbles. They would have objectively looked at prices back in 2002 (or whenever) and said, “you know, the price to income ratio is out of whack and price increases will not be sustainable”, and they wouldn’t have bought houses. Then, house prices wouldn’t have gone up!

I know someone who did this in 2002 – he sold his house because he felt like the prices were not going to hold up. He’d been reading too many reports by economists and had not got out enough and realized that prices were being held up by *people* and not fundamentals.

Ultimately, he was right, but only after missing another 50% increase in prices.