No Soft Landing

It is a given that housing prices have skyrocketed in the bubble markets across the country. There are three basic opinions with what happens to these housing markets in the next few years; a hard landing ( price declines / bust), a soft landing ( price stagnation or very mild price appreciation), or continued rapid price appreciation. This blog has argued that the hard landing scenario will happen. There is certainly a solid speculative nature to the housing market in the bubble cities. As famous economist John Kenneth Galbraith writes in his book "A Short History of Financial Euphoria":

Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destoyed abruptly, and they, also, respond to the newly revelaed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.

A soft landing will NOT happen. There will be a bang. A hard landing scenario is inevitable.