Because people who actually have money are smarter than you. They understand economics and know that we won't suddenly wake up one otherwise normal sunny day and find ourselves out of dead dinosaurs to burn.[...]
These being the same people that said real estate values could continue to grow forever?
You're engaging in a straw-man (these guys over here are wrong, so you are too), and yet you're using a terrible example because the people who understand the real estate market were years ahead of the drop. I can't count the number of very well written essays, articles and books I read about how the housing market works that included the prediction that the current bubble would burst within 5-10 years of 2005. Lo, they were right.
I bought a house at the height of the market, and what seemed like dozens of my friends asked why I would do so when it was so obvious that the market was at its peek. My answer and the answer of the real estate community as a whole was that three factors increased the real estate market from where it was in 1900 to where it was in 2005: 1) single-income families have very broadly become multi-income families 2) far fewer extended families live under the same roof and 3) the average family is far more mobile than it was in 1900.
These three factors increased both the demand and the available cash for purchases. At the same time, we became capable of managing long-term debt in ways that were not nearly as ad hoc.
So, has the bubble burst? Yep, just as it did in the late 80s.
Does that matter? Not really. The price will eventually return to where it was, though at a slower pace. What the doom sayers are suggesting is that the fains of the 20th century will also erode, and we'll return to $50,000 homes. That, simply can't happen unless the market changes pretty radically. Real market forces forced those increases, and unless we return to the model of single-wage, extended families, there's just no reason that people would want to sell their homes for so little, nor why people would stop paying the current rates.
The same guys that realize that buying laws and advertising is cheaper than product development and customer service?
Eh?
The point is this group has its eyes firmly set on next quarter with a long range forecast of 2011.
Heh. You don't now Big Oil very well, do you? This is an industry whose wealth is entirely based on expanding resources that they won't be able to take advantage of for 5-10 years. They spend more on exploration and R&D for long-term returns than any other industry.
For 10-40 year vision you need a group of people that cares what the world looks like in 40 years.
You've contradicted your own point. The person you're responding to said that change in pricing would be gradual as supply waned and market pressures would facilitate a rational response. You're setting a timeline of 10-40 years, essentially backing up his thesis.