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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Les H who wrote (112852)7/16/2001 1:37:49 PM
From: TheStockFairy  Read Replies (1) of 436258
 
From the artical, it looked like there was a very strong market there still.

Ok, I spent about 3 hours talking to a coupla old timers this weekend regarding housing. here are the basics:

1) in his early 60s, has lived in the same house for 25 years (within smelling distance of a garbage dump) and currently has it on the market. He is asking 280 and hasn't had any offers for the last 5 months. He says he will not mark the property down anymore because he has spent a chunk of his life in that house and if he can't get that price. You can buy new houses in his market which look much better and are much larger for 260k. Also, those houses are not next to the dump.

His philosophy:

1) He talked his son into getting a loan for 110% of the property value so they could have a little cash and pay for the closing fees.

2) Buy as much house as you can afford

#2) Late 60s, nearing retirement

He bought a home in the 1950's for 55k. He just sold it for 175k. He moved into a house that is double the size and paid 169k, but it is located about 70 miles outside of chicago. There are no large corporations within 20 miles of his new place.

His observations:

1) He could have never predicted the "inflationary spiral" that caused his home value to rise.

2) Buy as much house as you can afford

3) 3% down isn't that bad because the housing prices are skyrocketing. He couldn't see anything on the horizon that would cause prices to fall.

My observation:

When the housing market gets to the point where I can spend 3 hrs talking to two guys about how housing prices are going to keep skyrocketing, that is the time where you sell your house and move into an apartment for a few years. I had similar talks with people about skyrocketing energy prices a few months ago. On a side point, I did notice that on the magazine rack at the grocery store, about half of the investment magazines had cover stories relating to how to cash in on the energy boom.

Got Enron Puts?
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