Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (145403)	1/23/2002 10:01:22 AM
From: reaper	Read Replies (2) \| Respond to of 436258

<<If you wonder why house prices are so high>> No, I do not wonder at all why PRICES are so high. PRICES are so high because there is too much money sloshing around and it is all going into the real estate market. What I WONDER is how the leveraged US financial system is going to weather the fact that house PRICES are so far removed from their true economic WORTH. (and again, don't tell me that PRICE = WORTH. you might as well tell me that e=mc^3. it is simply not true). <<because people have had money to buy those houses. It didn't appear out of nowhere, and the pot of money is growing>> This is PRECISELY where you and I (and other members of this thread) part ways. The money DID appear out of NOWHERE, and as more and more capital is sent off to money heaven (oh Heinz, where are you?) it will disappear as quickly as it appeared on the scene. This situation is already playing itself out in the stock market (where did $3 trillion of Nasdaq "wealth" go? -- well the fact is that it was never really there; again, price does NOT equal worth) and my contention is that the real estate market will do the same. Frankly, this is no longer worth arguing about, as this will play out over a multi-year time frame, and the one that is wrong (you or I) will be financially ruined and no longer on this thread, such that the "winner" will not have the satisfaction of saying "I told you so." Cheers

To: Tradelite who wrote (145403)	1/23/2002 10:25:17 AM
From: Win-Lose-Draw	Read Replies (1) \| Respond to of 436258

because people have had money to buy those houses. It didn't appear out of nowhere Isn't that exactly where money comes from? The Fed/Treasury print up a bunch of notes and "inject" them into the system, right? What is the difference between that and coming from nowhere?

To: Tradelite who wrote (145403)	1/23/2002 11:25:43 AM
From: wsringeorgia	Read Replies (2) \| Respond to of 436258

Tradelite, the people here may be missing something in this real estate debate: I own a bunch of raw land, some in GA and some in FLA but also in the Philippines and I can tell you that raw land ownership here may not be much of an investment in terms of total returns as there are lots of costs and risks (local property tax, and the various liability risks). The right property in the right location can appreciate like crazy but for example fertile bottom land (flood plain) in most places here in the south reached a post depression high in the early 1970's (due to high soybean prices) and has declined ever since. But in the Philippines raw land is sky high, much higher than GA or FLA and the reason is very simple: the local currency is not regarded as safe and land is the most available convenient store of value for most investors there and hence the high price. Also, there is very little property tax (and no liability risk) and I would guess that any government that tried to impose a substantial land tax would not last long. In short the local wealthy out in the provinces regard raw land as many here do gold! And hence they bid up the price. So maybe some on this thread (if they are as concerned about the multiple "bubbles" like I am) should go out in the boonies and buy up a few acres! WSR