IMO the doomsday scenarios some of you are wishing for won’t happen. What most of you fail to analyze or consider is the average person’s PERCEPTION of price levels.
The average cost of gasoline in April 2003 was around $1.67 per gallon.
What’s it today, $3.30 plus or minus? Does the average person yearn for $1.67 gas again? Probably, but if it dropped just below $3 I reckon the average person would PERCEIVE the price had dropped so much they are now getting a good deal. I bet that would register as an increase in consumer confidence and a PERCEIVED increase in disposable income.
Sure the fundamentals have to correct… sure prices must come down to make sense.. but they will not go down to the levels some of you predict because human nature will not allow it. 2002 levels is my guess – that is when things last appeared to be in a general state of balance.
There are some smart people around here, but most of you are blinded by over-analysis and a lack of real world contact with the AVERAGE person. Many of you have expressed your amazement at how friends/family refuse to listen to your spiels. Instead of pounding them with facts and figures, next time take a few minutes to talk to them about their expectations and how they perceive whats going on.
I know there are holes in this theory, and I don’t have the time or inclination to argue it.. but I really believe there is some basis here.
I would like to hear what Bugs and the realtors think about this, since they are out in the field talking to the average person.
