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

To: flint who wrote (25878)	12/12/2004 12:20:31 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 306849

RE:"The advise to hedge your falling property value by short Home Builders has always been given here." I must have come late to the thread. I thought shorting the home builders was simply an idea to make some money. I suppose however that some saw it as a way to hedge a loss in home value. RE:"This advise has always been. It's more wrong today than ever before. The never has been in the history of the world a "housing bubble", rather it has always been a "land bubble". " The idea of the land bubble seems right on. However I imagine that can fluxuate as in the past. Indeed, it is that land that fluxuates to the greater degree. RE:"Hedging your land by shorting housing is simply insane." Maybe. But more than that is trying to time a megatrend that can go on for long periods of time. The government(s) keep piling on tax breaks for real estate. Couple this with the southern homing response and extremely easy money and you have what you have. At least half of the value of RE comes from tax breaks. With the 250/500 rule now you can even cash in and pocket money tax free. The laws created to promote home ownership have turned the housing market more into a speculators game. Even a casino, due respect to Las Vegas.

To: flint who wrote (25878)	12/16/2004 11:14:00 PM
From: Proud Deplorable	Read Replies (1) \| Respond to of 306849

The never has been in the history of the world a "housing bubble", rather it has always been a "land bubble". Hedging your land by shorting housing is simply insane Really? Everyone here knows I'm not a re expert but my question is, what happens to builders who buy huge tracts of spec land and start building when the price of homes starts coming down? Do they just sit on this land and wait till the next cycle which will be many many years down the road? Do they build on it anyway thereby sinking more money into a declining market? Do they walk away from it? Excuse me but if I stock up on something that I can't sell for a profit then I must have a loss as time goes by, maybe a cash crunch. Shorting builders seems like a perfect strategy right now to this novice. Oh, you laugh that I say I'm a novice. Guess what? No one in the real world cares to do the depth of investigations and research into the subject that you do. The public moves the markets and the publics perception is what is important, not the actual facts should they run contrary. When the CRASH hits in earnest you will see how foolish your protestations are. Watch Sydney, its the future. Retreat Australia Fair.