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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (14790)	11/11/2002 1:53:57 PM
From: Oeconomicus	Respond to of 57684

Is it possible for a residential RE market to crash by 40-50% would you say... For a local market or, more likely, for a sector of a local market (a price/size/amenities sector), I'd say it's possible. But more likely is that the turnover of homes drops off the charts - no one sells unless they are forced to. That's probably why you're seeing more rentals available - the owners moved on to another city, but don't want to sell at the current depressed prices, so they're trying to rent until the local market recovers. In other markets, the supply of new homes would dry up, too, but I think it was a lack of new supply that contributed to the inflated prices out there to begin with. Silly Valley has been through this before, BTW, and Houston and other energy-pumped markets of the early '80s took a similar hit in the mid-'80s. As for commercial property, the lease rates one can get are potentially much more volatile. Class A space in Atlanta that could be had for low teens per foot in 1993 (less, if it was a sublease), cost upper teens only a few years earlier, and low to mid-twenties by 1999. Bob