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Non-Tech : Bill Wexler's Trading Cabana
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To: xcr600 who wrote (319)4/1/2004 5:01:06 PM
From: Gotham Guru   of 6370
 
The reason real estate values have increased so much is greatly due to the decrease in value of the US dollar. The strength of the Euro dollar has brought in increased purchases from foreigners. They are buying at a 20% discount
to US residents. US home sellers, although getting larger
percentage returns, are getting paid in less valuable currency, so it nets down to 20% less of the actual gain.
I don't see interest rates doing much until after the election. Even after, the increase in rates needed to lower the money supply and increase the value of the dollar would be so high causing the old bubble to burst all around, doing way too much damage to our economy. Our government has succeeded in floating this economic bubble using fuel, milk, and other goods and services to put a brake on spending in lieu of raising rates. Anyway, that's my take.
When, or if, this bubble bursts is anyones guess. Seems like we'll be living on the edge of foreclosures at some point in our future.
As far as your land in MN, I always buy real estate after answering some questions: What's my time length of keeping this property? If I had to divest in an emergency, can I do it with no worse than minimal loss and in a short amount of time if necessary? Will I be able to afford it (if mortgaged/pay real estate taxes etc)through a large downswing in real estate? Will I be able to find and afford similar property in the future or does this property have some special intangible value? Will I have to give half to my wife if she divorces me? :) (I'm not married)
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