The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Skeeter Bug who wrote (1694)	2/20/2002 2:05:32 AM
From: Spekulatius	Read Replies (2) of 306849

<< many marginal buyers have tons of cheap stock option money to throw at a home>> I do not know anybody who has stock option money right now. However, it does not matter that much, since almost no cash is needed to buy a house. Indeed, right now the common sentiment is that real estate is "safe". Of course the sentiment in 1999 was that investing in stocks was safe as well. I consider a 5/1 leverage (20% down) as fairly risky since a 20% retreat will wipe out your equity. However, i guess that people may have to learn this the hard way to understand this simple fact. I don't have a strong opinion if real estate goes up or down - there can be arguments made for either case. but without risk it is certainly not. In todays economy, one must be sure that the income (employment) is fairly stable before investing in real estate - but who can make this assumption nowadays?

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