[quote=deadzone]FLU, all I’m saying is your thesis that the stock market being up somehow buoys the RE market doesn’t pass the smell test. If that were the case then why did the RE market take off at the same time the stock market collapsed in 2000?
Furthermore, in 2000/2001 we wire in a mild recession, 9-11 happened and the stock market collapsed. Phsychology was very negative. Yet, the RE market took off…
But going forward I agree it is most likely that if RE market prices collapse in the next few years, stock market will also. I just don’t agree that it is a cause and effect like you guys do.[/quote]
Actually, the housing market DID slow down in ~2001, right along with the stock market. IMHO, this marked the “natural” top of the housing market, everything after that was a result of the credit bubble. It rose during the stock market bubble, as well. Prices in our old neighborhood had already doubled by 2001, and things had started to slow when the stock bubble burst — and I was watching a number of areas, just like today, and the slowdown hit everywhere.
The reason many people didn’t notice the slowdown in RE was because of this (note 2000-2002):
