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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (1521)	2/3/2002 1:54:17 PM
From: endless	Respond to of 306849

Tradelite, I agree with most of your philosophy on real estate as an investment, primarily because you advocate home ownership as a long term deal which reaps many undisputable benefits. ..As has been pointed out by many on this board, it should not be about making a quick buck ($). Unfortunately all this publicity and selective information headlining draws speculation, which is inflationary. But most of all, it does not spell out short term risks of the current highly leveraged home owner that wants and should be able to own a home for all the "right" reasons. "Show me a piece of real estate, anywhere that would be sold at zero dollars today." The real estate does not have to be sold for zero. It only needs to be sold for less than the initial down payment (which isn't much these days) plus realtor commission less tax benefits, etc. etc.. , to put the homeowner at zero. I know you know that, but does the general public, and is there enough disclosure and education?

To: Tradelite who wrote (1521)	2/3/2002 8:56:40 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

Show me a piece of real estate, anywhere that would be sold at zero dollars today. (not saying you can't find one SOMEWHERE, but it will be hard to find.) Our former mayor Kurt Schmoke went on network TV about seven years ago and told the announcer that there was nothing wrong with the Baltimore City real estate market that destroying 40,000 houses wouldn't correct. These were tax delinquent houses that had been abandoned by their owners that the city owned by default. These are houses that are worth less than zero because the city destroyed a great many of them AND went after the old owners to get the back taxes plus the 22% interest they charge on delinquent taxes. 40,000 houses guy, 40,000 of them and this is just one city on the east coast. In Texas after the oil boom went bust so many people burnt down their houses the insurance companies went on TV with public announcements warning people that if they committed arson it was unlikely that they would get away with it, they would be caught. Meanwhile a local quarry filled up with cars with their keys in the ignition. This is what leverage can do for you when it goes bad, when boom turns to bust. There is no risk free investment, NONE. Leverage increases your return but it also increases your loss when the investment works against you. I know too many people who had to pay in money at settlement when they had to sell a house below the value of the mortgage plus selling fees.