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      07-31-2010, 10:20 PM   #24

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Originally Posted by lauer87 View Post
The prices we saw in 2007 should be regarded as the exception, not the rule.
To expound upon this for a minute, as I'm hoping to clarify. The housing market, like any market will, developed a price bubble - this part is not the exception, as all markets will do this to varying extents. Which leads me to the exception part - the size of this bubble (meaning the extent to which prices were artificially inflated) was extraordinary, and may in fact have been an exception. I will stop short of saying it will won't happen again to the extent that it did, however, because it is certainly possible. Additionally, it is also entirely possible that prices reach the levels they did and be completely legitimate - this is the inherent problem with such large markets with so many particpants, it is impossible to completely eradicate uncertainty and therefore bubble creation.