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

To: mishedlo who wrote (67468)	11/28/2006 11:37:37 PM
From: orkrious	Read Replies (2) \| Respond to of 306849

Outstanding piece, Mish. Not many people get it. They think rising prices mean there's inflation. What there is is rising prices of things everyone needs and declining prices of assets and things that went up in price because of the credit bubble. The bursting of the housing/credit bubble is going to cause a world of pain. Call it inflation, deflation, or stagflation, the people leveraged and in debt are in deep shit. The fallout will affect just about everyone else.

To: mishedlo who wrote (67468)	11/29/2006 1:52:15 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

I just saw a new MLS listing in West Hollywood for a one bedroom apartment for $1.3 million. Its adjacent to a parking lot for a Koo-Koo-Roo (fast-food chicken restaurant). Eight years ago, it would have been very ambitious to ask $235k for a place like this. The same new building offers a 3 bedroom 2.5 bath condo for $1.7 million. I'm not saying they'll sell, but I was shocked to see similar units five blocks away sell for nearly these prices. All of the new owners are dining new leased cars. A restaurant owner who is a friend of mine knows one of the new condo owners. He says he doesn't make that much money yet spends $5,500 a month to own a small condo and leases a $145k Bentley for who knows how much. I have to believe this is a situation where the "owner" will give the keys to the bank when they realize that prices are no longer rising. .