You raise an interesting point, that is also in the book Sell Now. Per the author, the housing bubble occured in our nation’s most exlusive communities: the coastal cities, plus vacation destinations like Aspen. He attributes this to the desire for status among people who live in those towns. People in the Midwest are more grounded and conservative, he says, and don’t chase the exclusivity of the status home. He delves into the economics of status buying, where supply and demand are inversely related. For a status buyer, the more expensive the product, the higher the demand. In a large city, people set themselves apart by having a better house than their neighbor. The role of psychology and emotion surely played a part in the runup. That is Talbott’s explanation, perhaps other people have different views.
rockclimber, as far as timing the market, I am sure I didn’t miss a run-up, since we sold after the peak and prices were already softening. At the time we listed, there were isolated reports of high pricing, and the PMI study had come out. But the mainstream media, like TV and the U-T, still had headlines of rising median price.
