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

To: TobagoJack who wrote (86067)	8/19/2007 11:05:06 AM
From: silenceddissenter	Read Replies (1) \| Respond to of 306849

Japanese Real Estate Lessons (Mr. T I would hate to see houses warehoused in the USA while the homeless vets fight the rain - did you ever talk to WANG about his needed jerry maguire moment to bring empty houses and homeless people together?) delong.typepad.com You can see this in Japan, where real estate prices had to fall about 80% from their peak before people started buying. Until the fall, it was a classic "greater fool" market, with nearly no limit on the prices people would pay, and banks willing to lend 100+% of value in loans with land as collateral (because real estate prices could never go down). But today, the dictum in Japanese real estate is "Kane wo umanai fudousan wo kau na!" ("Never buy land without positive cash flow!") Since it took years for prices to fall the 80% needed to make that possible, while landowners kept praying that if they could just hold out a little longer the good old days would return, the market simply congealed. Land wasn't even sold when people died and their heirs owed inheritance taxes -- they just let the government confiscate the land (and the government warehoused it rather than selling it, to keep prices from falling even lower). When no one is willing to sell at a price anyone is willing to buy at, no transactions take place, and no new loans are made.