More than two-thirds of Americans responding to a survey believe there is a real estate bubble, though many said they wished no one would discuss it in the interest of avoiding a self-fulfilling prophecy.
According to a survey conducted by real estate advice and information site ThinkGlink.com, 66 percent of respondents said there is a housing bubble, and nearly 45 percent said that people shouldn’t talk about a real estate bubble because the more it is discussed, the more likely there will be panicked selling that would lower property values.
Speculation over whether a real estate bubble exists has persisted in the last few years as home-price appreciation has outpaced income growth.
Of those who believe there is a real estate bubble, 18.1 percent said they believe the bubble will burst within six months, while the other 81.9 percent think the bubble won’t burst for at least six months. Another 41.3 percent indicated that the bubble won’t burst for at least a year, and the remaining 40.6 percent predicted a real estate bubble would burst six to 12 months from now.
“In recent years, home-price appreciation has been running far ahead of rates of inflation, wage increases, and national economic growth,” said Ilyce Glink, real estate expert and ThinkGlink.com editor. “Real estate is a huge part of the typical American family’s net worth, so it’s important to assess whether Americans believe their net worth is here to stay or is at risk of steep decline. For better or worse, when it comes to real estate, perception is often nine-tenths of reality.”
The ThinkGlink.com survey also asked what effect a real estate bubble burst might have on the economy. Of those who believe there is a bubble, 57.6 percent said they think a bubble burst would have a mildly negative effect on the economy. Nearly a quarter of respondents have a more dire view, predicting a massively negative effect on the economy. To the contrary, 16.8 percent of those who think the real estate bubble will burst believe it would be good for the economy.
The survey, conducted by ThinkGlink in November 2005, had 475 respondents. The complete results and comments are available at ThinkGlink.com.
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