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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Tradelite who wrote (14857)11/6/2003 8:34:39 AM
From: russwinterRead Replies (3) of 306849
 
Housing IS NOT in short supply. I was a large apartment owner in Tacoma until a year ago (sold, I know a bubble when I see it). I recently spoke with one of my comrades in that business, and he owns some fine mid-level vintage buildings. This is what he told me:

1. his insurance costs are up sharply , property taxes are up sharply, services (plumbing, etc) are up sharply because of the housing construction bubble, gas bills are up sharply, just about every material he uses is up generally, etc, etc.

2. He has more vacancies, then at anytime in the last decade. He can't raise rents. He feels two things are causing it: every higher end tenant with two nickles to rub together has gone out and bought starter houses, and the lower end crowd (usually young people starting out) are losing jobs and moving in with mom and dad in their four bedroom homes. Tacoma is no worse or better off than elsewhere, in fact it's been a hot home market.

3. Every month some speculator with access to "cheap" financing comes along and offers him a great price for the buildings. Each offer is higher than the one three months ago.

Translate lousy fundamentals= even higher prices. It's ALL credit induced. I asked him, "don't you recognize a bubble when you see it?"
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