Tuesday, February 10, 2009
Morons Bidding Against Themselves
The above house has been for sale near me for some time now. It was most recently listed at $849,000.
I just found out it is *going to contract* at $825,000.
Big deal, right?
Well look where it sold 1.5 years ago:
It sold even cheaper - at $800,000!
Who the heck would bid higher than its June 2007 sale price?
[Answer - some fool from out-of-town, a Georgian whose company is helping with his relocation costs.]
Can y'all see why I am so frustrated?
Morons keep bidding against themselves, not only dragging out the inevitable collapse, they are in fact making sure it's more painful. Because, the slower the drop, the more fools who'll have gotten sucked in at high, unsustainable prices.
Real estate, as an asset class, still has such a long way to go before it's washed out.