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

To: David Jones who wrote (22013)	7/8/2004 8:50:38 AM
From: Micawber	Read Replies (2) \| Respond to of 306849

I thought residential property (by this I mean single family houses and apartment buildings- many people consider the latter as commercial property)was overvalued four years ago, when they started selling at cap rates of 7.5 to 8 in southeastern PA/southern NJ. Yet anybody buying at that time would have made a killing selling today, as some properties trade in the 6 to 7 range. On a historic basis, this simply can't sustain itself over the long term, but the term has certainly been longer that I ever thought it would be. I am buying nothing for investment at this time- only smaller properties to fix and flip, and I am doing this very cautiously. I'm involved in some Florida land development deals which are just now starting to pay off, but I am not entering any new ones. XYZebra has found a nice little niche to invest in, but my concerns would be credit issues with the smaller tenants that these buildings attract. If it's working for him, that's wonderful. I'm sticking to what I think I know, and waiting for the inevitable turn. When it comes, I want my cash ready.