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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (23288)8/16/2004 5:14:37 PM
From: MulhollandDriveRead Replies (2) of 306849
 
hi tradelite..

though i own RE...

i do not *sell* RE...

so i think my view is a bit more dispassionate

it would certainly be to my advantage that the current cycle of RE asset appreciation continue unabated...

however,

the same boomer demographic that drove the asset bubble in equities are the same people (imo) who drive the current RE asset "bubble" (for lack of a very much more appropriate word)

once the appreciation cycle tends to flatten out, these are the same people who drove the equity bubble who will at some point begin to "cash in" on their RE holdings...

i'm not saying that i expect a "crash", i've never believed that....

but i do see a normalization (reversion to the mean) of asset appreciation, that will prompt some to sell in order to convert tangible assets to needed cash

i am personally in the middle....i have sold off some RE assets, held onto others, but quite frankly at the current level of appreciation, am loathe to take on any new debt in the hope that low rates and future appreciation will continue unabated.

that makes me *conservative* wrt RE going forward

i don't see a crash, but it also believe the demographics of the boomers ultimately create a supply regime which cannot set forth an un-ending upward spiral of valuations...

i see RE flattening out....which creates supply, once that is generally recognized, prices will follow accordingly
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