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

To: Crimson Ghost who wrote (29949)	4/3/2005 7:41:26 PM
From: NOW	Read Replies (1) \| Respond to of 110194

my point was: who paid the piper?

To: Crimson Ghost who wrote (29949)	4/3/2005 11:30:13 PM
From: John Vosilla	Respond to of 110194

Was not the S&L debacle caused more by a bust in commercial real estate than homes? It was across the board though commercial took the biggest hit. I found that it hit many of the residential bubble markets of today pretty bad as well as the oil patch which is not in a bubble state today. But we have the new construction high end condos and vacation homes in so many places that we did not have that prior bust. Another big factor was interest rates back then were near double digits and purchases (especially commercial) were based on that environment so you had cap rates of 9-10% and most property owners could not survive even as interest rates started a major decline in 1992. Today you have commercial purchases under a 6% environment and residential purchases based on the 1% option ARM's. A bust of enormous proportions seems to be in the cards with any uptick in vacancies or interest rates or continued flat rental rates. The one variable we know is operating costs will rise no matter what for the owner.