I remember the 90s vividly. I had a front row seat for it, albeit I was working in the OC at the time. I watched the prices peak in late ’89, watched it plateau for 3 months and then start to decline in early-mid 1990. The media finally figured it out in late 1990, about 6 months after it had already been in motion. Does that lag ring a bell with anyone?
From mid-1990 on it dropped at a pace that was only slightly slower than the run-up that had preceded it.
If we extend the same reverse slope to this run-up the decline would be faster and farther because the run-up was both (much) faster and farther than the run-up in the late ’80s.
I don’t know if the past will repeat this time, but so far it sure looks that way. As far as I can see, 2006 is playing out exactly like 1990.
