A bull market leads participants to become complacent. Buyers simply don’t see the real risks in betting on continued RE price rises. They wouldn’t dream of buying stocks with 20:1 leverage, or of going to a casino, yet they take very large risks in RE without a blink. -vreaa
This from oh crap at vancouvercondo.info 29 Dec 2009 3:10 am -
“My brother in law just bought his 3rd investment property, taking advantage of these low interest rates. Overextended to the extreme. This is the same person who would crap his pants if he had to bet $100 on roulette.”
[NoteToEd: It's that time of year again... Two days worth of wading through assorted archival boxes to satisfy the multi-jurisdictional tax accountants... in the process, an odd assortment of deliberately forgotten BilletsDoux/LettresD'Amour presented themselves... [and, "No. I am not being audited " - and, "Yes, it's been tried in the past."... but fortunately, being rather 'anal' about receipts and supporting documentation... 'they've' always returned to their counting houses empty handed. To shorten this long narrative... In the course of my archeological excavations I was minded to think of some rather long-odds past 'gambles' which, nevertheless, paid off handsomely. Admittedly, most of the time - it is decidedly more judicious to stick with the statistically proven. That said... In the short run it is typically much, much more fun being irresponsible... Funny though, how the most irresponsible market participants frequently think themselves the very epitome of probity. Ergo the [hopefully amusing] link…]