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: Elroy Jetson who wrote (25359)	11/22/2004 11:33:44 AM
From: John Vosilla	Read Replies (1) of 306849

Elroy comparing 1990 to today: In both periods gold prices at high, dollar was falling, a Bush is in office and we are at war. High vacancy rates for residential properties with a shift in capital to real estate after a stock market crash. Differences are residential properties now are at much more overvalued levels in many area relative to incomes or rental rates. Debt levels of US gov't, US homeowners and consumers are much more stretched. Commercial property overbuilding, oversupply and 30-40% vacancy rates was the biggest risk last time versus residential this time. Interest rates were relatively high on both the short and long end versus today at record low levels. I remember many institutionally owned beautifully designed shiny glass office buildings built in the mid 80's for $150+ per square foot selling for as low as $30 psf by 1993-94 period. Could the same thing happen again on the residential side on an even worse level given the very low interest rate starting point, high debt levels and the very weak savings/cashflow position of the typical US property owner?

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