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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (27583)3/2/2005 8:29:27 AM
From: loantech  Read Replies (4) | Respond to of 110194
 
Russ you too can get a 2nd home in the Pearl. <gggggg> Or maybe in Zig Zag a little mountain home on the river.

I put a loan together for a couple in Vegas yesterday. They have three properties now and are buying a fourth. The couple makes about 5K a month. They have a first and second on each of their properties and on one a third mortgage. Still decent equity but I see it all going away if prices drop 20-30 %. I would not want to owe around 750,000 with that small of income even counting rent.
tom



To: russwinter who wrote (27583)3/2/2005 9:32:40 AM
From: Amy J  Read Replies (2) | Respond to of 110194
 
RE: "I had money in the stock market, but the market always seemed to be going down, down, down. I decided to take that money out and invest it in real estate."

That's like chasing one bubble after another and getting a hair cut twice.

One bubble is more than enough.

Off the top of my head (the actual details are on the Real Estate thread), loosely speaking the ratio of Silicon Valley housing to core Nasdaq (let's loosely call this Housing:Nasdaq) was 1:8 between 1990 and 1999.

Currently, the ratio is reversed and from 1999 to 2005 the core Nasdaq to Housing ratio is 6:1.

Over 15 years it's a wash, meaning a real estate investor would have done basically the same as a core Nasdaq investor.

But moving forward, I think Nasdaq is a better place to be than the top of a real estate bubble.

Regards,
Amy J



To: russwinter who wrote (27583)3/2/2005 12:22:25 PM
From: Ramsey Su  Respond to of 110194
 
This will negate Bob Toll's theory about supply and demand of housing. We may in fact have far more supply than demand.

If investors/speculators stop buying homes they do not intend to occupy, would the supply sky rockets?

Right now as far as I can tell, in San Diego, the supply of SFRs for rent are plentiful when apartment vacancies are pretty low. That is primarily due to the number of apartments in process to be converted to condos.


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