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: CalculatedRisk who wrote (224124)	10/14/2009 8:36:00 PM
From: SouthFloridaGuy	Read Replies (4) of 306849

CR - thanks for the fair and balanced post on RE you just posted on your blog. I have mentioned many times on SI that low end RE is ridiculously cheap. Inventory tells the story - there is none left in many of the areas which began to fall due to subprime. Secondly, one must look at RE from a cost of replacement analysis at some point. In the Central Valley or Riverside County, it costs at least $125 sq/foot to build a decent house. Homes are routinley selling for $100/sq foot now, which is Year-2000 pricing. This same story is playing out in AZ, FL, NV, etc. Many commodities have tripled to quintipled during that time! The land is being assessed at a negative value, which implies greater than 100% falls in the value of land since the bubble burst. Not a bad inflation hedge if that's what the end game really is... Meanwhile, the argument in gateway cities like NY/London is that they are more leveraged to global growth rather than what's going on in the US. I'm not necessarily a believer that this whole stock market rally is real, BUT, it's pretty darn convincing and R.E. has to follow soon...the window for the bearish arguments on R.E. are closing.

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