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

To: ild who wrote (11470)	7/3/2003 11:16:57 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

I think that there are certainly markets which are way ahead of themselves and may be flat to down in the near term. I think some people may wait a long time for any appreciation and they've been trained in the last few years to expect it, hopefully they bought something they want to call home because they may stay there a while. I think people's aversion to the stock market helped to feed the rush to put our collective savings into real estate, as well as the record low rates. It's hard to see rates staying this low, but it's equally hard to see them rising rapidly which would undoubtedly cause immediate pain in the real estate market. I'm not seeing the kind of wild speculation that we saw before the last real estate bust, maybe because the commercial market has continued to suck even while residential has rocked. My sister was a commercial broker and investor during the last boom bust in New England and one day she was flying high buying and selling 20 unit apartment buildings and five months later she was bust. It took her years to climb out from under that mess (leverage cuts both ways). It was a painful lesson for her and I took it quite seriously when I decided to buy my own investment properties. (we've been selling a few here and there, not buying if that gives you an idea) I've had a lot of people who have told me that they put money in their house because they felt it would be safe there, that at least (as oppose to losing it in the market) they'd enjoy their money if it went into an addition or into an improvement. I've also talked to lots of people that said they wanted to refi and pay down their mortgage because they felt they could get a better return there. When people talk this way, I see this as seeking safety, not speculative buying to sell at a higher price (which is what I'd associate with the word "bubble") The pros I know are selling like I am or simply holding, not buying.