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Housing Bubbles

Housing bubbles can be compared to a game of musical chairs. In this game, there are a limited number of chairs available, and when the music stops, everyone must find a seat. Similarly, in a housing bubble, there is a limited supply of homes and a high demand for them. As long as the music is playing (the housing market is booming), people keep buying homes, and prices keep going up.

However, when the music stops (the market crashes), people suddenly realize there aren't enough chairs (buyers) for everyone, and prices start to plummet. Those who were late to find a seat (buy a home) may be left standing and lose money, while those who managed to find a seat earlier may be able to sell their homes before prices drop too much and make a profit.

Just like in musical chairs, timing is crucial in the housing market. Those who enter the market at the right time and manage to buy a home before prices skyrocket can benefit greatly, while those who enter the market too late may find themselves in a precarious position.

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