The most prominent and most to be regretted of the academic sages was Irving Fisher of Yale - as already indicated, the most innovative economist of his time. Heavily involved in the market himself, he too surrendered to the basic speculative impulse, which is to believe whatever best serves the good fortune you are experiencing. In the autumn of 1929, he gained enduring fame for the widely reported conclusion that "stock prices have reached what looks like a permanently high plateau." (A Short History of Financial Euphoria, John Kenneth Galbraith)
Back in December of 2005, David Lereah had this to say:
David Lereah, chief economist at the National Association of Realtors, expects home sales next year to be the second-best in history. He called the recent slowdown a "tapping of the brakes" on a red-hot market. "Home sales are coming down from the mountain peak, but they will level-out at a high plateau, -- a plateau that is higher than previous peaks in the housing cycle," Lereah said.
Sure, nominal homes sales are likely to fall to a "plateau that is higher than previous peaks in the housing cycle" due to a significantly larger population and a larger 2nd home market. However, if one looks at residential construction as a percentage of US GDP there will be no 'high plateau."
Unlike the post 1929 stock market collapse, the US is NOT headed for a depression type situation in the next few years. A recession? Yes. A depression? NO.
Just like Irving Fisher, David Lereah also owns speculative shares, in the form of multiple condo units. The parallels in history are really fascinating.