Getting the Market Sentiment Right
Great article in the NY Times today about the role of housing as an investment vehicle. What caught my attention was this:
In an annual survey conducted by the economists Robert J. Shiller and Karl E. Case, hundreds of new owners in four communities — Alameda County near San Francisco, Boston, Orange County south of Los Angeles, and Milwaukee — once again said they believed prices would rise about 10 percent a year for the next decade.
With minor swings in sentiment, the latest results reflect what new buyers always seem to feel. At the boom’s peak in 2005, they said prices would go up. When the market was sliding in 2008, they still said prices would go up.
An annual survey of real estate sentiment is not sufficient. Can you imagine the uncertainty in the market if the Consumer Price Index was based on an annual survey? Our Real Estate Market Sentiment Index is based on real time data from thousands of active real estate buyers.
