bostonbubble.com

GenXer · Joined: 20 Feb 2009 Posts: 703

Yes, but we are not talking black swans here. The only 'black swan' would be for prices to jump, which would only happen when our economy is growing and unemployment is next to nothing. Otherwise, complex market dynamics will do their job.

As before, don't let predictions hurt you. I don't mind if my predictions are be off the chart. If anything, as long as one is immune to black swans that affect real estate, being wrong is fine, and if being right actually makes you money, this is the best hedge one can possibly have. Total downside protection and a possibility to participate in the upside.

Being 'immune' means having a very good reserve fund, as well buying a house with a very low forward-looking price/earnings ratio (probably 2:1 at most). Since both of these are wishful thinking for most people who buy in Boston area, the usual caution is in order - if you are not robust to economic changes (price movements, job loss, emergency expenses, etc), do not buy, ever.