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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (6967)	8/24/2001 10:26:59 AM
From: Think4Yourself	Read Replies (5) \| Respond to of 23153

re: if you're getting killed in stocks and it's too late to get into bonds, then maybe you should take a fling at real estate? That's exactly what seems to be happening here. The dead market is making folks acutely aware of their home equity. It has actually come up in conversations lately. That also explains some of the strength in sales at Home Depot and Lowes. Don't get me wrong. No one I talk to is "worried" about housing prices falling. Quite the contrary. Most folks have been in cash for quite awhile and are itching to put it to work. If you are sitting on cash waiting for the market to "bottom", why not fix up the house or upgrade to a larger house? It makes sense, gives tangible benefits, and gives you something to do while waiting for the market. Who wants to end up being the richest person in the cemetary? I'm not giving my beneficiaries my hard earned money to buy expensive houses and cars that I wouldn't buy for myself!! I have also been contemplating getting a larger place. Probably not one of the nearby Toll Brother houses, which are beautiful, but a bigger place.

To: kodiak_bull who wrote (6967)	8/24/2001 10:38:41 AM
From: Tommaso	Read Replies (1) \| Respond to of 23153

Well, with mortgage rates down and the fed creating so much money, anyone with the price of an automobile can get some kind of house. I was dismayed to find that a friend of mine who lives in LA and who is in his mid-forties has just now decided to buy a house in the hills. Here's someone on an academic salary who has probably tied himself to a mortgage of $350,000 --if not much more.Even with low interest, the payments must be over $2,500 a month. I don't think he realizes that he is leveraged in real estate in a ghastly way. This bubble is even more insidious than the tech stock bubble, since it is encouraged by tax deductions for interest, and since home ownership is considered the height of prudence by most people. On top of that, probably a large percentage of mortgages are adjustable. A 2% rise on $350,000 means $7,000 more in interest per year, as I hardly need say. If the dollar sinks too much, and the stock markets sink along with it, and inflation increases, the Fed has nothing to do bu tighten up and raise interest rates--or rather, tighten, and follow the inevitable interest rate rise. All I know to do is to try to stay out of the way, keeping out of debt in the most old-fashioned way. I am trying to preserve my real capital by putting it in bonds denominated in currencies that can rise against the dollar. And oil and gas, which will not go to nothing, and some gold.

To: kodiak_bull who wrote (6967)	8/24/2001 11:08:26 AM
From: William JH	Respond to of 23153

Non-tradeable information: My son is a Captain in the Marine Corps and recently bought his first house, a new unit built by Ryland in San Diego County. The price was 202k, which included 25k of upgrades that I assume were mostly profit for RYL, who also financed it. What provoked him to buy was having his rent raised to $1,500 mo. His PITI is not much more than the rent he had been paying. I don't know anything about the high-end RE market, but I don't see the low end going down much in SoCal due to the huge influx of new residents. Many of my Oriental neighbors seem to have three generations living in one house. My point of view is based only on what I see around here, but I am not interested in being short any housing stocks at this time.