Mark's Notebook


	And this is the simple truth - that to live is to feel oneself lost. He who accepts it has already begun to find himself, to be on firm ground. Instinctively, as do the shipwrecked, he will look around for something to which to cling, and that tragic, ruthless glance, absolutely sincere, because it is a question of his salvation, will cause him to bring order to the chaos of his life. These are the only genuine ideas; the ideas of the shipwrecked. All the rest is rhetoric, posturing, farce. - Soren Kierkegaard

Will housing bubble burst?

San Jose Mercury News

Friday 6 May 2005, 10:58 am
Keywords: News Articles

SOARING BAY AREA HOME PRICES WORRYING BUYERS AND ECONOMISTS

By John Boudreau, Mercury News

Some economists have watched soaring home prices with alarm, fearful the steep rise could lead to a plunge. They see a combustible mix of low interest rates, easy credit and rising speculation, coupled with a widely held belief among buyers -- especially younger ones -- that real estate values never decline.

But other economists point to forces that buttress the housing market, at least in the Bay Area, from steep drops. Those include a chronic shortage of homes, a lack of available land for new developments and a willingness of many people to pay what it takes to own a home here.

Robert Shiller, a Yale University professor of economics, probably paints the most dire bubble scenario of all prominent economists when he predicts a plunge in housing prices rather than a leveling off.

Housing price volatility is not new to Silicon Valley, which just a few years ago experienced a drop in prices.

In November 2000, eight months after the Nasdaq stock bubble burst, the median price in Santa Clara County was $510,000. A slide began the next month, with the median eventually dropping to $435,000 in November 2001, according to DataQuick.

http://www.siliconvalley.com/mld/siliconvalley/11580640.htm