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Real estate disclosure forms warn consumers about price fluctuations

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While the debate continues over the existence of housing bubbles and potential fallout from a fizzle or pop, real estate agents in some sizzling markets are asking consumers to sign a disclosure form stating that home prices can – and do – go up and down. In October 2004, the California Association of Realtors announced the release of a new disclosure form, the "Market Conditions Advisory," which states, "In light of the real estate market's cyclical nature it is important that buyers understand the potential for little or no appreciation in value, or the actual loss in value, of the property they purchase." The form also states that it is "impossible to predict future market conditions with exact accuracy," and describes "hot" versus "cool" real estate markets. Many real estate markets in California have not experienced a cooling trend in the past 10 years. "In a less competitive or 'cool' market there are generally more sellers than buyers," the form states, "often caus...