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

To: Tradelite who wrote (11865)	7/30/2003 1:13:57 AM
From: Jim McMannis	Respond to of 306849

RE:"Do you believe all the folks buying homes the last few years expect to make a killing on those properties in the near future?" You'd better believe it...a lot expect to. RE:"Are you saying no one should ever buy one again for the next 10 or 20 years "until the smoke clears"?" No, but it troubles me that a lot of people could get underwater in a hurry. RE:"Anyone who thinks this way (and that seems to be the general tone of discussion on this thread at times) has, in my opinion, fallen into the habit of regarding real estate ownership as something akin to stock ownership." Surely there is a liquidity difference, a necessity difference and a tax entitlement difference. On the other hand RE prices are not immune to bubbles. I'd say a triple or more price increase in the last 5 years is bordering on the extreme. If you don't think RE can deflate just look at the 1920's in FL, the depressionary 30's, Texas in the mid eighties and even the early nineties especially in the early nineties California and currently in Silicon Valley and other tech centers in the west including the front range of Colorado. I won't even mention Japan, whose real estate market has declined for 10 years straight despite them not making "any more land". Typically things adjust when the difference between the "haves" and "have nots" gets too wide. What we have now in real estate. It's what we had in the thirties. RE:"I recall one fellow who asked me a long time ago on this thread about buying a $350K home in the western part of my county. I told him at the time that if he found something good that he liked, he ought to stop worrying about waiting for prices to fall and buy it, because if he didn't, someone else would. (Same advice I've given every buyer client for years.)" That's fine but hind site is 20/20. If you tell someone to buy today and 2 years later the market has collapsed and they are underwater on their mortgage, and lose their job... are you going to help them out? H$ll no, because you'll be either out of a job or sitting in the RE office waiting for the phone to ring. Jim