One thing that makes it very hard to forecast home prices right now is that we’re living in a totally artificial real estate economy”
said Robert Shiller, co-creator of the Standard & Poor’s/Case-Shiller Index, a widely followed measure of housing prices.
Shiller pointed to the Federal Reserve, which last week reaffirmed its policies on bond purchases and record-low interest rates. In September, the Fed launched a third round of quantitative easing (QE), in which it has bought $40 billion of mortgage-backed securities per month, primarily in mortgage-backed bonds.
Ultimately, even considering its recent history, real estate does have one advantage over the alternatives. People tend to need homes, and many love them. A social network, on the other hand …
When it comes to investing, it might be better to go with something people need and love, rather than simply “like.”
said David Weidner on MarketWatch where he compared investing in Facebook to the bricks and mortar of real estate.