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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: John Vosilla who wrote (48485)12/30/2005 4:19:25 PM
From: Gotham Guru  Read Replies (1) of 110194
 
John,

60%,at least in Vegas, sounds steep. That would mean a $600k unit would be sold at $240k. Those units should get scooped up before they get that low by those in CA as 2nd homes or new residences unless CA gets the equal 60% drop. I don't see that happening. FL, will be the 3rd most populated state by 2011 as per CNNMoney. People are moving there. Does that mean there will be no decline in prices, of course not. Buyers who got into flipping are either going to lose their deposits on pre-builts or get foreclosed on. That said, if the sales prices drop 60% YOY, you will be correct, there is a bubble that burst. But what minimum % drop would you consider a "bubble"?

<<All those new high end condos are sitting empty and generate no cash flow in Florida, Vegas, San Diego and several other bubble markets. Drop could easily be 60%+ when you are talking $600k units that it would be a tough time finding a year round renter for even $2k/month and up to $1500/month in operating expenses before you even get to your mortgage. Single family I think only gives back perhaps the last couple of years gains in the bubble markets. Much of the rest of the country has a ton of opportunities and I bet does very well unless we go into a depression.>>
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