Every once in a while I check out The Housing Bubble Blog and I’ll just add, when pretty much every news site I read or news podcast I listen to does a show or article on the “deflating housing bubble: what to do” there is definitely a sea change in the air.

So it’s not really a surprise to read that interest rates are up, housing sales are down, inventory is rising, and people who took out financially risky interest-only mortgages or have pretty much spent all the equity in their homes are starting to sweat. Duh. Homes are staying on the market longer because the speculators have already left the party, and many of the folks looking to buy can’t or don’t want to pony up for a nutty mortgage at these higher interest rates.

The problem is many people assumed, and therefore counted on, double digit appreciation year over year to make up for all of this, and possibly fund their retirement on top of it. But this story is the same as the .com boom and bust, you know something is overvalued, every one piles in despite the lack of common sense, a few smart people see the crash coming and sell, and everyone else who thought they were “smart investors” while they were actually following the herd, gets left holding the bag.

I think it’s time to revisit the old adage for making money in investments: buy low, sell high. Or another chestnut: the easier it is to make a fortune, the easier it is to have it taken away from you.

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