I’m convinced that the housing market in Silicon Valley is going to cool down. Maybe it’s wishful thinking. But here’s why.

  • Supposedly, downturns in the stock market are historically followed after some time by downturns in the housing market
  • A Bay Area study said there’s a disconnect between housing prices and rent prices – they don’t correlate. Either housing prices are going to come down, or rent prices are going to go up. I’m betting on the first.
  • The Mercury was saying how a lot of people have been defaulting on their home loans. They keep their houses by refinancing, something like that, that’s based on their equity in the home. But this is all sustained by rising housing prices. Which seems to me like a bubble situation.

I dunno, I know nothing really about housing, and people like Greenspan say there’s no bubble. But yeah, I still think that’s what’s gonna happen. I say by first quarter next year.

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