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

To: John Vosilla who wrote (82050)	5/23/2007 11:33:09 AM
From: Riskmgmt	Read Replies (1) \| Respond to of 110194

I've come across 'old school types' with deep pockets putting their money on depressed lot prices at auction expecting that turnaround. I don't know if these guys are unaware of how bad it really is or just are perennial optimists believing in the 'paradise.. 1k a day people move here' mantra as most folks in RE have to be.. For someone with deep pockets when the turnaround comes is not that important. That it will come is all that matters. Consider the "global liquidity" world wide printing of currencies, the frothy stock market, borrowing money at 5% or 6% to buy Real Estate in the Sun Belt isn't a risky deal. Longer term it is a way to hedge against currency devaluation. Yes, builders bid the land prices way up in the last few years, yes building costs were inflated also. However, there will always be a cost to construction and a price below which R.E. can not go, excluding special situations where the sole employer of the town closes down. Consider also, we still have the lowest mortgage rates in 40 years and some of the best tax advantages of any other investment out there. Catching the absolute bottom may not be as important as positioning and leveraging the right deals.