Market Watcher: This Time Is Different? Nope

graph
James Bednar, who writes the blog Northern New Jersey Bubble, went back to the real estate bubble of the 1980's to try to put the current market in perspective. This graph shows per capita income creeping dangerously close to the median home price line which proved to be turning point last time round. He also culls through all the relevant New York Times article so the time and tracks the collective mentality by year, as in "1982 - Real Estate Buzz Begins" and "1984 - Prices Begin to Skyrocket." If we had to guess, we bet Bednar thinks 2006 is a lot like 1991, a "False Glimmer of Hope."
Home Prices Do Fall [NNJ Bubble]

Comments

here's the link to article

http://www.youdovoodoo.com/80sbubble.htm

Posted by: Anonymous at February 16, 2006 9:33 AM

If interest rates start to climb, we'll start to hear the slow hissing of the deflating bubble gather speed fast. But, until then, who can know. And wasn't the tunring point in the late '80s, the ripple effect of the stock market crash of '87?

Posted by: anon at February 16, 2006 12:46 PM

is the fact that the two nearly converged causing a fall just once in the last 20 years really a paradigm, or even reasonable to fuel a prediction of the same happening in the future or now?

Posted by: jp at February 16, 2006 1:57 PM

That's a good page. I wasn't around here back when the market tanked. I always wonder if there was a real "tipping point" where people realized that the market crashed.

Posted by: JoshK at February 16, 2006 3:14 PM

Well though, it doesn't show "per capita income creeping dangerously close to the median home price line which proved to be turning point last time round," so much as per capita income creeping dangerously close to 10% of median home price. Which is not to say that might not be a tipping-point ratio, but it only really looks dramatic because of the 10x scaling of income.

Posted by: CE at February 16, 2006 4:09 PM

Since 9/11 the bubble heads have been in full song about the pending "crash". Not only has it not happened the market conditions are very very different from 87. The NYC market is driven by "FIRE", Finance,Insurance, and Real Estate. As long as they are strong, and more people move into the area than move out the law of supply and demand will set the tone and prices.

Posted by: Anonymous at February 18, 2006 11:38 AM

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February 16, 2006

Market Watcher: This Time Is Different? Nope

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