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

To: bentway who wrote (19725)	4/23/2004 9:47:14 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Tract-home builders raise the selling price of their new homes on a regular basis because it provides home buyers with the impression that these homes are a sound, stable, and profitable investment. These price increases are in no way related to rising costs. This can provide a predictable and profitable re-sale market for buyers of new homes - until the cycle ends. I knew some friends who bought into new developments in Laguna Niguel and Mission Viejo California in the 1980's. After buying a new home they would sell it a year later and buy a more expensive new home. After six years and six homes they had built up $800k in equity after starting with $30k. Then 1991 happened and their last home went back to the bank after their equity vanished in price declines. They sent me a Christmas card a year later from Ohio. It was like buying shares of America Online in the 1990's. It was very profitable - until it wasn't.

To: bentway who wrote (19725)	4/23/2004 10:16:46 PM
From: Crimson Ghost	Respond to of 306849

These are speculators, not investors.

To: bentway who wrote (19725)	4/24/2004 12:47:47 AM
From: JF Quinnelly	Read Replies (1) \| Respond to of 306849

I know a couple who sold two homes in Orange County, and used the proceeds to buy five new homes (for cash) in Banning. They live in one and rent out the others.

To: bentway who wrote (19725)	4/24/2004 4:40:56 PM
From: David Jones	Respond to of 306849

>>>investors would buy NEW homes<<<< Yes seen it even a couple of three years ago locally but only one then. Also seen it in Hawaii in the early/mid eighties but those were Japanize.

To: bentway who wrote (19725)	4/24/2004 7:26:19 PM
From: MoneyPenny	Read Replies (1) \| Respond to of 306849

Where I live in SW Florida, investors only buy new pre-construction to flip. It is a mainstay of the business here. We are talking large percentages of condominiums being purchased for this purpose. The concept is to have a contract on the unit before you close. Most of the big developers make sure that new buyers get renters their first year. After that they are on their own and many just forget it. WCI, Bonita Bay, Centex, etc. are very big here. We are talking the 500k and up vacation/winter residence. Message 20019616 news-press.com We are talking maybe 2000 units of high rise condominiums in a small city with no infrastructure or retail to support. I am thinking of a penthouse for my husband and I bought at deep discount in a few years. Money Penny