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

To: John Vosilla who wrote (35649)	7/19/2005 12:19:34 PM
From: Tradelite	Read Replies (1) \| Respond to of 306849

John, I wasn't referring to just immigrants who deal in cash businesses when I said there's a lot of money floating around. I'm including common, garden-variety Americans as having the money. Let's examine all the shock and awe some people have been expressing in the media and elsewhere about the large number of people buying vacation/resort/second homes.... I would bet some good money MOST of those people are simply looking for a way to put some cash to use. I have a friend who, along with siblings, recently inherited the following: a large house in McLean, VA; an apartment building in Arlington, VA; and a beach house in Ocean City, MD. If they were to cash in these holdings and not "manage" them, what in the heck are they going to do with the money? They can take a stepped-up basis in inheritance taxes now by selling them and taking out millions in cash, so the cash has go to somewhere. Or they can hold the properties and worry about them for the rest of their lives. These heirs are only an example of the heirs which are cropping up all over the world, loaded with money. Also, it's foolish to assume that when million-dollar-plus homes sell, that the buyers have no money. Either people in this income category just want the home and can afford it and pay cash, or they need a tax shelter for their high incomes and take out the biggest loan they can get. Some of the shock and awe over California home prices can, I'm sure, be attributed to the fact that people are averaging in the purchases of true billionaires with the purchases of more average folks. Skewed figures can lead to skewed thinking. Another thought for what it's worth....When you see homes in your community being purchased by rich people from all over the world who don't even live in the U.S., you know there's a lot of cash out there looking for a place to land. This has been going on the DC area for a very long time. If condo speculation is rampant in Florida by a relatively few nut cases, professional investors like yourself and many others will be around to pick up the pieces, so I'm not looking for a total financial debacle in the U.S. (I could be wrong, of course--<<gg>>

To: John Vosilla who wrote (35649)	7/19/2005 12:30:56 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

Cape Coral is one of those areas which is experiencing a lot of outsiders coming in to speculate with cash made in other markets that moved earlier. I mentioned the price of the house to several friends in my recent visit to Northern CA and they all said, "Is that all houses sell for there?" They are so used to the over-blown prices in their own market that 180-200k seems ridiculously cheap to them, without taking into account that 10 years ago the house was less than 50k (and is currently a total wreck). It is the same kind of relative value judgements that people were making back in the tech bubble when any tech stock under $100 was considered cheap in comparison to $200 JDSU or $300 AMZN.