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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (17078)	3/20/2002 11:34:16 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

I don't consider my home an asset. Simple: I am not planning to emigrate to Bolivia! If people get a spurious feeling of wealthy by looking to the prices of their houses, this may be a problem. People will overborrow just as in my discussion with Patron. Agreed, of course the "appreciating" part is where problems crop up from time to time...

To: GraceZ who wrote (17078)	3/20/2002 2:34:16 PM
From: LLCF	Respond to of 74559

<But more importantly the debt is secured against an appreciating asset, their homes and part of the cost of the interest is picked up by Uncle Sam.> Only if they have 'earned income'... uncle sam doesn't actually PAY any interest. <As long as that asset is appreciating at a higher rate than the cost of the money they are justified in leveraging it. > Well, that's obvious... that's no reason in itself to justify debt. <The ones who leveraged up the whazoo so they could buy the maximum house with the least amount of cash have had far bigger increases in their equity than I did over the last ten years and by a large margin. > Well, yea, but so what... what you're saying is "I wish I had made that BET". <As long as the strategy works people will use it. > Right... that's why real estate is forever booming and busting... the leverage is simply always available. DAK