Friday, December 23, 2005

Do You Think There's a Bubble?

by Osman Parvez


Do you think there's a bubble? According to a recent survey of 4,000 consumers, 66% of respondents believe there is. Of those, 58.7 percent believe the bubble will burst within a year and 41.3% think the bubble will still be alive and well a year from now. Few believe that real estate will suffer as badly as the stock market did when the bubble burst in 2001.

The results of this survey aren't surprising given the endless media hype about the bubble. The opportunity within bubble mania is within its potential cooling affect across all real estate markets, not just the ones where everyday dick and janes were flipping condos like flapjacks. In a bubble, the volume of transactions increases dramatically with artifically increased asset values due to speculation. It's a telltale sign of a bubble.

Investors take note: To take advantage of a bubble bursting mania, the smart money will look for areas that have strong underlying drivers of housing demand rooted in demographics and quality of life benefits that have not seen a large run up in prices from speculation. This region in our lovely state of Colorado should get your consideration.



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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

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