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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (19766)	10/6/2004 12:06:02 AM
From: Madharry	Respond to of 78627

i just bought puts on BZH. i am convinced that the housing market is now a bubble - accelerating housing prices justify the high prices relative to income as well as property taxes which over the past 3 years the increases have vastly exceeded the cpi , wage increases , anything but oil and health insurance. I remember in late the 60s making some money on the land development companies some of which went up exponentially just like the home builders. after they went into the toilet accounting irregularities surfaced such as recording a sale and booking profits when someone put down a 5% deposit. The thought suddenly struck me that now one can buy houses buy putting down 0-3% down. people in my area are flipping houses for a 35% profit in 2 years. if housing goes down 20%. how many of those people that put 0-3% down are going to stick around and pay the balance of their mortgages? what will that do to the shares of homebuilders? with the cost of energy being what it is-many empty nesters will be looking to downsize in a hurry. will the 20 something generation want to buy those $400,000 houses?