“Vuja de“: the distinct sense that somehow, something that just happened has never happened before. Nothing seems familiar. And then suddenly the feeling is gone.
Worried about an overheated stock market, the smart money took some of their chips off the table, and started moving it into real estate — an asset class not only beaten up in price, but one that offered tangible benefits.
Seeing the uptick in prices, “fence sitters” and other Buyers took note, and joined the fray.
Suddenly, excess inventory got soaked up, and home sellers discovered that they could price more aggressively.
It happened in 2000.
Could it happen again in 2011?
Before the stock market tanked in 2000, the euphoria (and capital gains) generated by the Go-Go ’90’s lit a match under the housing market.
Could the same thing happen again?
Perhaps, but probably not in exactly the same way, if only because mortgage securitization has been so thoroughly discredited (pun intended) that there’s less capital available to fuel home purchases this time around.