In Floyd Norris’ (always great) column [The Wisdom of Wall St.? Sometimes It’s Wrong [NYT]](http://www.nytimes.com/2006/01/03/business/03stox.html?pagewanted=print) he explores the conventional wisdom we are all comfortable with. He caught my eye with his commentary on the housing market. The principal is that housing and other economic experts have been largely wrong over the past two years. Here are some of his thoughts:
* Conventional wisdom:Housing boom will weaken, hurting the economy.
* Unconventional wisdom:Investors may have to wait a long time for bargains that may not exist and no bust will occur. Housing sales to continue at a brisk pace. If long-term rates decline later this year, sales volume could increase even more.
* Unconventional wisdom – with a twist:A declining housing market could be less benign than expected. “If the housing market were to decline, that could be reflected not only in lower construction spending but also in some retrenchment on the part of consumers who suddenly felt less well-off.”
* Conventional wisdom:The stock market forecast a decline in the housing market this fall.
* Unconventional wisdom:Builders stocks rallied at the end of the year as profits continued to be strong.
I am now not sure which way is up and which way is down, conventionally speaking, of course.
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The confusion that Mr. Norris speaks of just goes to show that in these uncertain times we need to make the effort to make the right decisions in purchasing real estate. That means thinking with our heads instead of our emotions.
My guess is that we will have a better picture of what is going after the Greenspan/Bernanke transition.
But I will not be surprised that, at least for January, buyers exhibit extreme caution and some sellers decide to pull their properties off the market until the fog lifts.