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The title link will take you to an article with an explaination of why a real estate crash is inevitable. The old saw among stock investors, "When everybody thinks the same thing, nobody’s thinking," has never been more true. Is there anyone who owns real estate who doesn’t think it will be worth more tomorrow than it is today?

The main reason investors should worry about real estate bubbles is this: most experts say that real estate bubbles are simply impossible – at least on a national scale. In a recent article posted on, David Lereah, chief economist for the National Association of Realtors, was quoted as saying, "There is no national price bubble. Never has been; never will be."

To anyone not participating in it, the bubble here in Costa Rica is almost as obvious as the rapidly collapsing real estate balloon in Key West. "Se Vende" were the first words of Spanish I learned. "For Sale" signs festoon buildings and lots all over the country. The P/E ratio for housing here has reached the lofty heights of the Keys market, 20 to 40 times annual rent. The historic mean is under 10. Everything returns to the mean.

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