The common theme that I hear is, “I refuse to believe the nightmare scenario that the bottom is going to drop out and we will lose 20-30%.” So easy to accept 20% gains for five years in a row, but heaven forbid you even suggest that the market could correct a mere 20%. Even worse when you approach them with solid facts all you get in response is the above line with nothing to back it up.
Psychology plays a huge role in this market and involves greed, denial, refusal to accept data that doesn’t back up a preconceived belief. Confirmation bias I believe it is called. Not only is the data on sales, inventory, ARMS etc. bad right now, but psychologically the market is a mess with most people either not aware or flat out denying that a crash will even happen.
My advice is to wait it out, or consider moving to a city where you can make your same combined salaries but buy a $275,000 palace.
