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.

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

To: Maurice Winn who wrote (22118)	8/5/2002 7:46:15 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi Maurice, <<apartment price deflation>> However grim the news, it remains true that despite the FED interventions, nature is administering her own medicine, Financial Gravity, and we will land at a clearing price, eventually. Chugs, Jay

To: Maurice Winn who wrote (22118)	8/5/2002 9:11:50 AM
From: Snowshoe	Respond to of 74559

Was a real estate downturn supposed to start already? I read that earlier and puzzled over it. The article did not explain the reason for the low rents, but I wonder. Is it possible that that a lot of the former renters moved into houses and condos financed by Uncle Al's latest wave of cheap money? In Alaska during the 80s we went thru a colossal real estate boom/bust cycle. The boom was fueled by a variety of state-sponsored housing subsidies programs, using the sudden flood of oil wealth. For example, one popular program gave a subsidized interest rate to first-time homebuyers on properties costing less than $80k. The result was a massive flood of condos costing... $79,995. When the bust hit bottom about 1989, single family homes went for 40-70 cents on the dollar, depending on location. Condos sold for 10-50 cents on the dollar. Many developments lost too many owners to remain eligible for condominium status, and were sold as block to out-of-state vulture capitalists who rented them out as cheap apartments for a number of years until the market recovered. The subsidized mortgages had a built-in time bomb in the form of increasing monthly payments after five years. Much like the potential disaster awaiting anyone who takes out an ARM at the current rates. Most of the banks and S&Ls in the state failed. At the end, the remaining banks were giving away a free toaster when you opened a checking account. And a free house to put it in! <g>