As the extremely choppy decline of the stock market shows, there are always a significant number of people who either think the bottom is near or are scared the bottom is near and jump in prematurely. The stock market even has name for it: ‘value traps’ . I have made such mistakes in the last six months as individual stocks looked very attractive only for them to be dragged down because the market wide macro forces are too strong . The analogy to the real estate market is quite neat, with the added genuine difference that some people just love a house and will buy and not be too bothered if it falls in value.
Unlike the readers of these pages, many of those who visit open houses , as the realtors report, do not have the benefit of advice as to the level of the market in relation to long term drivers. And the realtors don’t want them to be . If they had any guts , they would have invited Rich , for example, to their conference with along Q&A session alongside their ex-realtors’ association economist.
