Wednesday, May 11, 2011
Perception is reality in housing, and the reality is that housing prices continue to be crushed under the weight of millions of foreclosures. This, of course, is devastating to the real estate industry -- the hundreds of thousands of brokers, developers, financiers and builders who can only work if people believe it is a time to buy. When one stands back and considers the present situation, it makes little sense because housing prices will rarely be lower than they are now. One would expect renters to be shopping, but it isn't happening. The perception of a marketplace disaster has infected every level and one can only wait until there is a change in thinking that may still be months away. Housing has always been somewhat of a manic depressive business -- from bubbles to disaster and back. It would be an interesting communications challenge to try to bring proportion to the field, but that would be unlikely. Housing is one more example of the irrationality of many economic decisions.