Re: Housing Bubble Pops

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Article #2030

#2030

From: Bob Kolker
Date: Thu, 23 Nov 2006 17:51

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Anonymous Sender wrote:

> THE VIEW FROM the back patio of Greg Stone's
> three-bedroom house in Reno, Nev., is
> stupendous.
> 
> But last fall, when its owners put it on the
> market for $835,000, there were no takers.
> 
> For nearly a year, the price sank.
> 
> The Stone signed a contract on the home for
> $590,000 � 30% below its original asking
> price.
> 
> The Stones' house could be a tombstone for
> the recent real estate boom.

That is what happens when homes are bought on speculation. It is like 
the great tulip bulb bubble in the 1600's. It is the fate of all bubbles 
to burst. When ask prices rise way beyond all reasonable levels of 
value, a bust is inevitable. One cannot bet on the outcome forever.

Bob Kolker

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From: Bob Kolker <nowhere@nowhere.com>
Newsgroups: sci.econ,ba.general,la.general,sac.general,scruz.general
Subject: Re: Housing Bubble Pops
Date: Thu, 23 Nov 2006 12:51:36 -0500
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