Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (55409)	11/2/2004 3:42:33 AM
From: Elroy Jetson	Read Replies (2) of 74559

Do you mean there are swarms of houses standing empty? -- Absolutely! The vacancy rate has steadily moved higher in all regions of the United States. The vacancy rate in many areas exceeds 15% which is far above the 3% to 5% we would describe as normal. A mile from me in Los Angeles is a new luxury apartment complex. The developer who built it almost went bankrupt in 1990 so he was extra sensitive to "the signs" of an impending disaster. Shortly before the project was finished, he sold this project and his entire portfolio of real estate to a Real Estate Investment Trust in Denver Colorado. Although the project is lovely and was completed about two years ago, the vacancy rate there is above 95%. All over Los Angeles holes are being dug for underground parking structures for new apartments and condominiums. The large supply of un-rented apartments and unsold condos in no way diminishes the enthusiasm for building more. Every intelligent real estate owner, of which there are relatively few, has sold or is selling their real estate holdings. You can suppose that more debt is an easy sell, but I personally don't see where it's going to go. From what I can see, all those people inclined to take on debt are already up to their gills. .

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