San Francisco/California

Take It Off the Table

Carol Lloyd writes in the San Francisco Chronicle about the practice of the pre-emptive offer — in the context of buying San Francisco Bay Area real estate.

San Francisco-April 16, 2005In the end, the pre-emptive offer is emblematic of the way the real estate market has come to represent the businessification of the average citizen.

Once, buyers were just home seekers; now, if they want to join the game, they are aggressive players in a dog-eat-dog industry.

Meanwhile, this reminder from Robert Shiller as posted on the Housing Bubble blog:

In a bubble, high prices are sustained only by the expectation of more high prices. That is what makes a bubble a bubble, prone to bursting.

The reason we cannot expect a soft landing today is that right now people are willing to pay these very high prices only because they expect them to go up even more in the future.

Prices can’t just level off, because when people no longer expect them to go up, some of them will not want to hold at the high price.