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

To: Carl Worth who wrote (20965)	3/25/2005 7:06:25 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 78954

Carl, I'm not a financial genius and I've been wrong about real estate many times, despite the fact that I've been a real estate broker for 20+ years. However, from personal experience and also from extensive daily reading of many opinions I tend to agree we are in a housing bubble. Not just in many parts of the USA but in many areas worldwide. Real returns cash on cash in real estate are generally at historic lows. New buyers can't buy w/o help from Mom and Pop. The alternative of a 103% loan with an adjustable rate followed by payments equalling 50% plus of net monthly income is alarming to me. NAR just released a report showing that 36% of homes bought in the US last year were spec buys. Completely unsustainable IMO. I tell everyone I know to own their own home free and clear. Needless to say, not many listen. Nearly everyone where I live is paying more for their SUV monthly payment(then add gas, ins.) than a typical mortgage payment was just 10 years ago. And wages haven't kept pace...Except for construction and other real estate related activities. I guess we'll see what happens in year from now.

To: Carl Worth who wrote (20965)	3/27/2005 4:26:59 PM
From: LauA	Read Replies (1) \| Respond to of 78954

Carl Worth - If there's a real estate bubble, the ramifications will cycle through investing, even 'value' investing. I have neither interest in participating in ad hominem attacks, nor rebutting your reasoning. I posted on TARR because I've never considered it a 'value' investment. I purchased it as part of an end-of-the-year statistical 'basket'. (I won't bore you with the math, but I assure you that the devil is in the details.) Suffice it to say, my pupils dilated as the price increased. I apologise for using metaphor in describing my sell rationale. I confess that I'm one of those dopes who paid off his mortgage because it was the equivalent of owning a 7% AAA bond, and I was unable to find similar risk/reward ratio in the market. (As someone who pays AMT, the tax benefit of a mortgage is ephemeral. I can get a zero points home equity loan with a phone call should a great opportunity show up.) I try not to mix price and value. My house would only return market price if I were to sell it. Since I value living in it, I don't want to sell it. Then why bother to price it? I'm not pessimistic at all. I'm bored. Sitting with a lot of cash is boring. Meanwhile, you might be interested in another 'hot' market - Las Vegas: latimes.com To quote Herbert Stein: If it can't go on forever, it will stop. Your mileage may vary.