MSNBC.com By Liz Pulliam Weston Overconfidence can be an investor's most deadly flaw. Yet many people are displaying plenty of overconfidence when it comes to real estate. They're sure home prices can only go up -- or that values will crash tomorrow. They're committing to risky loans and not thinking about how they're going to make the much-higher payments to come. They're gambling their current wealth on future, speculative returns without truly understanding the risks. "I'm nervous," said financial planner Delia Fernandez of Los Alamitos, Calif., who says she sees plenty of clients act as if they have a crystal ball. "We know we can't sustain this growth rate … but nobody knows what the future holds." ... "Prices in real estate don't come down overnight like the stock market," said economist Delores Conway, director of the Casden Real Estate Economics Forecast for USC Lusk Center for Real Estate and a veteran of the Los Angeles market crash of the early 1990s. "If (real estate values) come down, they come down gradually." ...
June 30, 2005