I opened up this week’s issue of Businessweek and saw the article Bubble, Bubble — Then Trouble [Businessweek]. I basically could anticipate the content of the article without reading it (but I read it because I really like Businessweek online). The subject of the story was Loudoun county, Virginia which has been the nation’s fastest growing county since 2000 and the analysis of this location might be interpreted to mean whats in store for the remainder of the country.
Local real estate brokers are quoted as saying that the market is now more balanced, nothing worse than that.
However, the quote of the day came from a local businessman who assessed the real estate slowdown like this:
They ran out of stupid people.
Of course my favorite interpretation of the above quote is from George Carlin:
Think about how stupid the average person is; now realize half of them are dumber than that.
The article says that “What’s happening in Loudoun is a rapid shift in psychology — a classic sign of a market turn. The buoyant optimism that fueled speculation and expectations of ever-rising prices is now succumbing to the fear of being left standing when the music stops. Real estate, the hottest play of the century in Loudoun, is rapidly cooling.”
The dynamic here is interesting. A booming bedroom community with a strong economy – why would prices collapse? Perhaps one could speculate that worry here seems to be more closely tied with the adjustment to a slower pace or “cooling”, rather than a looming crash. Or I guess I am just stupid.