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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: jrhana who wrote (36415)7/27/2005 5:40:10 PM
From: TradeliteRead Replies (1) of 306849
 
I mean ugly as in "sordid".......where speculators assume buyers are stupid enough to put hundreds of thousands of quick profit dollars in their pockets, when any fool can find out what the speculator just paid for the property a month or two ago. The new kitchen appliances and fresh paint he put in the house just ain't worth that much.

The real ugly part comes when the speculators have to reduce their prices. At that point, they'll begin dragging other sellers down with them, sometimes unjustifiably but inevitably.

Someone always pushes the envelope a little too far. Same thing happened before the last big real estate downturn. At some point, the greedy sellers start asking for prices that no thinking person would pay. The psychology catches on among buyers, and...well, the rest is history.

So far, buyers have been the ones driving up the market, bidding prices above what sellers have been asking. But when the sellers aim too high (and it's easy to figure out what too high is, if you know anything about real estate values in your neighborhood), they become their own worst enemies.

Frankly, I consider any seller who prices his house unrealistically as a speculator. I always hated it when I couldn't get a seller to listen to me on that point. Unbelievable the number of arguments they can come up with to support their stupidity, too.
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