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

To: MulhollandDrive who wrote (1720)	2/20/2002 12:23:57 PM
From: quasi-geezer	Read Replies (1) \| Respond to of 306849

<<I've demonstrated that in the market where my son lives if he purchased a $300K home, he will lose nearly $25K over 5 years (this is ASSUMING "normal" appreciation) purchasing compared to renting. >> Mrs. Peel, you don't sound a day older than 20 ... and you have a son ...

To: MulhollandDrive who wrote (1720)	2/20/2002 7:07:21 PM
From: y2kate	Read Replies (1) \| Respond to of 306849

In all honesty, no- I wouldn't pay $700,000.00 for this house. No way. If I was entering the RE market now, I'd look for value somewhere- maybe a fixer upper, something slightly less desirable location-wise...I'm not sure. Maybe I'd continue to rent until something became compelling. But as crazy as these prices seem, they're comparable to the market here back in the late 80's, before the big slide. When I bought this house, homeowners on the block were freaking out- literally- that a home was sold with a "2" in front of it. I think I literally caught the bottom- a happy coincidence which involved no strategic planning on my part whatsoever. That's not to say I didn't believe it was a good deal. I thought it was an unbelievable deal. I guess what I'm saying is, I didn't buy it just because I thought I had to have a house. It was equally compelling as an investment as it was just a fabulous house. And will I be as enraptured should the market cave? No, definitely not. I'd be doing the math, thinking I could have bought the house back, paid cash, and still had plenty of money leftover to discard in the stock market.<g> But I'm not confident enough in that scenario to sell just for that reason. That seems to be an irrationally defensive, even somewhat paranoid, maneuver- given my circumstances. But, but- maybe it is the smart thing to do. It crosses my mind frequently, of course, as properties go higher and higher. And, my experience in the stock market would teach me to take a profit while you have it. So we'll see- but for now I have no intention to sell in the near future. And yes, paying inflated prices for anything is a trap, or at least presents a bad risk/reward scenario from an investment standpoint. It's all about discerning value and opportunity. If you can do that and find a great place to live at the same time, then so much the better. I wish your son the best of luck, whatever he decides!