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Gallup Poll: 7 Out Of 10 Expect House Bubble To Burst

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http://poll.gallup.com/content/?ci=22468

April 19, 2006

Seven in 10 Consumers Expect Housing Bubble to BurstStill, only about 4 in 10 expect housing prices in their areas to remain the same or decline

by Dennis Jacobe

Most consumers expect the "housing bubble" to burst in the next year. Increasing interest rates, surging energy prices, and increasing housing inventories add credence to this outlook. While consumers remain much more optimistic about their local housing markets than those of other areas around the nation, the overall economic effects of a slowdown could make current consumer expectations seem prescient later this year.

Negative Ninnies or Realistic Bears? :lol:

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Most consumers expect the "housing bubble" to burst in the next year. Increasing interest rates, surging energy prices, and increasing housing inventories add credence to this outlook. While consumers remain much more optimistic about their local housing markets than those of other areas around the nation, the overall economic effects of a slowdown could make current consumer expectations seem prescient later this year.

Negative Ninnies or Realistic Bears? :lol:

This is a fascinating result IMHO. Most believe that prices will crash, but not my house? Do we have any psychologists in the house who can elaborate on this further. My simplistic analysis - DENIAL.

Billy Shears

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This is a fascinating result IMHO. Most believe that prices will crash, but not my house? Do we have any psychologists in the house who can elaborate on this further. My simplistic analysis - DENIAL.

Billy Shears

The good DrBubb is probably best placed to give a diagnosis.

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This is a fascinating result IMHO. Most believe that prices will crash, but not my house?

Nothing unusual. I've seen a couple of studies showing that people could much more clearly predict other people losing money than they could losing their own.

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This is a fascinating result IMHO. Most believe that prices will crash, but not my house? Do we have any psychologists in the house who can elaborate on this further. My simplistic analysis - DENIAL.

Billy Shears

I suspect many people have drowned denile :ph34r:

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self vs other bias. bad stuff happens to other people, good stuff happens to me.

it's fairly widely documented.

For example, in relation to health:

(just googled this, it's not my chosen field or anything)

http://www.users.muohio.edu/shermarc/p324opt.shtml

Optimistic Bias in Perceiving Physical and Mental Health Risks

Ed Berger, Angela Magnuson, Missy Maxwell, & Jamie Tubbs

Please Note: These materials may be used for research, study, and education, but please credit the

authors and source.

"People will come to believe what they want to believe only to the extent that reason permits" (Kunda, 1990).

The optimistic bias is the tendency to view oneself as invulnerable (or less likely than others) to experiencing negative life events. This personal fable (Elkind, 1967) also involves the tendency to overestimate one’s probability of experiencing positive life events. For example, in the area of health, research has shown that more than half of surveyed individuals perceive that they are less likely than others to be afflicted with such health outcomes as drug addiction, cancer, tooth decay, and auto injury. Harris and Guten (1979) found that only a small proportion of the subjects in their study reported to be at a higher risk for a given disease while a much larger proportion assessed their risk as being lower.

...

Another factor contributing to the optimistic bias is the nature of the comparison other. Studies have shown that when subjects are asked to compare their futures to the future of the "typical other person" (e.g. Perloff, 1987), " the average other" (Perloff, 1987), "(most) people they know" (e.g. Drake, 1984), or "other students at the same university and same sex" (e.g. Weinstein, 1980) the optimistic bias is prevalent. However, when comparing themselves with a good friend instead of "the average other," subjects do not display unrealistic optimism (Perloff & Fetzer, 1986). Perhaps the reason for this is that comparing oneself to good friends implies a comparison of individual to individual instead of a group as is the case with "the typical other person," for example. This can be explained by the "person positivity bias," which says that people value the individuals of a group more positively over the group as a whole (Sears, 1983). Hoorens and Bruunk (1993) tested both of these factors and found that subjects unrealistic optimism was high when compared to a random other or average other but diminished when comparing themselves to their best friends.

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Hugely important if true. The crash won't really start until the wider public start to see it, if 70% believe that prices are going to come down the the crash is almost underway.

Edit: Just seen SCB's post, the economist described it as a global house price bubble so even though it is US, the bursting of the bubble has important effect on the UK.

Edited by Young Goat

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This is a fascinating result IMHO. Most believe that prices will crash, but not my house? Do we have any psychologists in the house who can elaborate on this further. My simplistic analysis - DENIAL.

Billy Shears

I think denial is a major part of it, but there is also a familiarity factor. Eg people often feel safer in their local environment simply because they know it, or if they don't feel safer, they know the areas to avoid. It's a lack of knowledge that breeds insecurity. They think they know what's going on in their local property market and are more than happy to believe the spin if it makes them feel more empowered (ie richer and more able to move pretty much anywhere else and bag a bargain!). I agree though, denial is big.

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Oh, you can drop the bomb on my town, but it wont affect prices in my street as I have a lovely pond and porch, this alone is a force field against price falls, both are collectively worth upwards of £100k. My House Is Special!

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This is USA not UK.

Yes, I suspect you'd get a much lower percentage thinking the bubble will burst here, simply because the media there seem to have been more forthright about the fact that it a bubble.

The "it will happen to other people, but not me" thing is still fascinating though - I'm sure that would be similar here and it strikes a bit of a chord with me as I tend to think London won't crash as badly as elsewhere... might just be fooling myself...

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This is USA not UK.

Yes, WSJ picked the story up:

http://www.realestatejournal.com/buysell/m...-morrissey.html

National Housing Bubble
Will Burst, Consumers Say
By Janet Morrissey
From The Wall Street Journal Online
More than 70% of U.S. consumers believe a national housing bubble will burst and home prices will collapse within the next year, although 56% believe it's unlikely to happen in the area where they live, according a new survey.

My guess is that in the UK, where VIs lie more, the perception may well be the other way around with only 3 out of 10 seeing a crash. I wonder if any polls have been undertaken in the UK? Who would dare publish one if they did is more to the point?

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This is a fascinating result IMHO. Most believe that prices will crash, but not my house? Do we have any psychologists in the house who can elaborate on this further. My simplistic analysis - DENIAL.

Billy Shears

Bad things only happen to other people. When prices have crashed I can by a much cheaper house, whilst having sold mine for top money. :P

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I lectured some psychiatrists recently.

When I said that people were inherently thick they had a good chuckle. It's true of course. I wonder how many of them have just bought flats...

In a way people need to trust their emotions more.

Everyone's ploughing into property - prices are sky high - people are trying to pressure you into buying.

My gut instinct is fear - run away! Trying to rely on some fancy economic theory to help you is just intellectualising what is essentially daft behaviour on the part of those around you.There's no "new paradigm", just sheeple doing what the newspapers and supplements tell them to.

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I hear this all the time, 'It won't go down round here because of the school/sea/park/Starbucks/shopping centre/poundstretcher etc"

It's NIMBYISM in the extreme :lol::lol::lol:

Edited by Badger

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I do reckon this will mean that the US will crash soon.

The herd is turning round.

It's just that most muppets don't realise how caught up in the herd they truly are.

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Haha, I knew it was too good to be true. I thought for a moment that RealBullshitter had been completely straight with us. More fool me! :lol:

it's called intelligent design misrepresentation .............RS is a BB nuff said :ph34r:

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I lectured some psychiatrists recently.

When I said that people were inherently thick they had a good chuckle. It's true of course. I wonder how many of them have just bought flats...

In a way people need to trust their emotions more.

But of course unless you go along with this mass insanity you're punished, if you over-analyze a market you may well be trumped by emotion, if you're clever you have to learn when to go along with the flow and then when to get the hell out ahead of the exodus.

Currency is the ultimate hallucination, we attribute intrinsic value to what is essentially a worthless bit of paper... we walk into shops and walk out with Cool Shit in exchange for a shred of paper!

Edited by BuyingBear

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Haha, I knew it was too good to be true. I thought for a moment that RealBullshitter had been completely straight with us. More fool me! :lol:

The influence of the American economy on other countries in the world is not insubstantial. An old saying "when America catches a cold, Europe gets the Flu" perhaps sums up the realities. You may not be aware, but the history of HPCs since WW2 has demonstrated that the US and UK markets have risen and fallen more or less in tandem.

You might also be unaware that interest rates moves by the Federal Reserve Bank in the US has an affect on the UK. This is why so many articles appear in our press discussing what the Fed is doing.

Thus perceptions and opinions in the USA are relevant to the UK.

I regret that some postings are very disturbing (to Trolls and Bulls and yourself) but I think we all agree that it is better to know what the world is thinking than to try to live in splendid isolation and regard ouselves as "Little Britian" against which no others will have an influence. That was pre Liz I.

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I lectured some psychiatrists recently.

When I said that people were inherently thick they had a good chuckle. It's true of course. I wonder how many of them have just bought flats...

In a way people need to trust their emotions more.

Everyone's ploughing into property - prices are sky high - people are trying to pressure you into buying.

My gut instinct is fear - run away! Trying to rely on some fancy economic theory to help you is just intellectualising what is essentially daft behaviour on the part of those around you.There's no "new paradigm", just sheeple doing what the newspapers and supplements tell them to.

From Science magazine:

"PSYCHOLOGY:

Tough Decision? Don't Sweat It

Greg Miller

On page 1005 of this issue of Science, researchers report a series of experiments with student volunteers and real-life shoppers that suggests that too much contemplation gets in the way of good decision-making--especially when the choice is complicated. "

Science

In Summary:

"Fretting over difficult choices really may be the worst thing you can do. New research shows that thinking too hard about complicated problems results in poor decision making. Study participants were given either simple or complex information about four cars. Half were allowed time to choose a favourite. The others were told that they could choose their favourite after they had solved anagrams. The distracted participants' choices didn't differ between conditions. Conscious thinkers generally made the best choice in simple conditions, but they made bad choices given complex ­circumstances. In another experiment, researchers quizzed shoppers and found that customers buying simple goods who had thought about their purchases were happier than ­unconscious thinkers. But for complicated products, the happiest shoppers had thought the least about their purchase. Expert advice is to go with your gut feeling (Science 2006;311: 935). "

Which kind of suggests that we are all wasting our time here. Buying property is a complex decision - best to go with your gut instinct, which for most of us is a big "NO".

Don't worry, you'll know when the time is right to buy. :)

This may explain the rash of bears turned bulls - they thought too much, and made a poor decision(i.e. to buy).

The influence of the American economy on other countries in the world is not insubstantial. An old saying "when America catches a cold, Europe gets the Flu" perhaps sums up the realities. You may not be aware, but the history of HPCs since WW2 has demonstrated that the US and UK markets have risen and fallen more or less in tandem.

You might also be unaware that interest rates moves by the Federal Reserve Bank in the US has an affect on the UK. This is why so many articles appear in our press discussing what the Fed is doing.

Thus perceptions and opinions in the USA are relevant to the UK.

I regret that some postings are very disturbing (to Trolls and Bulls and yourself) but I think we all agree that it is better to know what the world is thinking than to try to live in splendid isolation and regard ouselves as "Little Britian" against which no others will have an influence. That was pre Liz I.

I don't disagree that this is significant. I just find it highly amusing that you feel the need to put a little bit of spin on what is already good information. :lol: It's a disease for you now, but I didn't know it was this bad. :rolleyes:

Edited by Smell the Fear

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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