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

To: Wyätt Gwyön who wrote (9699)	3/18/2003 4:15:01 PM
From: Elroy Jetson	Read Replies (3) \| Respond to of 306849

the percentage gain is much larger in condos than homes; is this a sign of ever-more-marginal buyers coming in at the tail of the bubble? or is this just the start of a bigger move up? Of course these are buyers enticed by real estate but unable to afford homes. So yes, this always happens at the tail-end of the price spiral, as it did in 1989. A report a few months ago even found Condos selling for more than Homes on a square footage basis in Orange County CA and San Diego. I have recently noticed the same situation here in Beverly Hills and West Hollywood. This valuation implies that the extra land included with the home has a negative value. Quite peculiar when you consider that in many areas you can buy two adjacent homes remove them and build a pile of condos, in theory resulting in a enormous profit. This type of irrational always happens at the end of an up-cycle, always trapping a number of neophyte builders. They should have listened to their Mother, "if something seems to good to be true, it usually is." They build and by the time they come to market prices have fallen and they have a large loss leading to bankruptcy court.