Crazy On Tap - If the housing bubble bursts...

Crazy On Tap - If the housing bubble bursts...: "Yes, most housing stock flatlines (sometimes for many, many years) rather than falls. There's a psychological barrier to sell something below the nominal price one bought it at. This is even more pronounced for investments which are perceived as 'real' rather than 'investment' vehicles (as single family homes are).

The exceptions pretty much prove the rule - they occur in towns which are over-reliant on one or two industries and their boom/bust cycles - finance in NYC and San Fran (late 80's), energy in Houston, New Orleans and Denver (60's and 80's again), and vacation homes in beach communites everywhere."