Sunday, March 19, 2006

Some Current Market Observations.

Nothing has really changed in the last month or so since I posted. As I follow my local market in northern NJ, I see perhaps a bit of cooling. Less bullish sentiment among the herd. My sense of the market right now is that there is a bit of a stand off between buyers and sellers. Sellers are not willing to lower prices, and buyers are nervous about the housing bubble popping and rising interest rates. However, I still see houses that are "priced right", in good locations, selling. But no doubt there has been a swelling of inventory. There still has not been any "market event" that will cause a large drop in housing prices. I still subscribe to the theory that the government will not allow a large amount of asset deflation to occur. Only a rare event that would force the government's hand would cause this. I believe that a modest drop in asset prices, along with dollar devaluation and more stealth inflation and taxation is the master plan. Good luck to the bubble watchers!