Self fulfilling prophecy??

[Loosehead]

http://newsforums.bbc.co.uk/nol/thread.jspa?fo rumID=3973&edition=1&ttl=20071224110036

regardless of the true situation I think a crash will be triggerred by a fear of a crash! I mean everyone is scared to death of buying something and having it drop like a stone shortly after. Is there going to be a major correction?

[jno]

if people buy housing as an investment, they take the risk any investor does, that it can go down as well as up. I don't feel a lot of sympathy for the buy-to-let guys, they're distorting the market and making it impossible for first-time buyers who actually want a place to live in rather than make a fat profit from. If there is some kind of crash, those buyers will at last be able to afford a home, which I think would be a good thing.

Personally, I bought at the top of the market 20-odd years ago and the place didn't appreciate by a penny for years. I didn't care: it was my home, not a machine to make money.

[buildersmate]

Undoubtedly a crash will be caused by a fear of a crash.
To bring it down to basics, do you not remember the shortage of loo paper a while ago was caused by shoppers fearing a shortage of loo paper. Its the same (in reverse - no buyers instead of too many buyers)

[kwicky]

It does not take much working out. When a house increases way beyond inflation the person owning that house becomes that much richer, on paper anyway. That means someone has lost out, usually the first time buyer. There comes a point when they refuse to join, demand falls, and prices revert to equilibrium. The winners will be those that sell at the peak and only re-enter the housing market near to the trough. Sound familier.....it is just aping the stock market.