Posted on 10/23/2005 12:24:56 PM PDT by ex-Texan
This will be like the NASDAQ in 2001-02, people will be ruined and they will never believe that investing can ever be fair, that the whole game is rigged no matter what asset class they invest in.
As a financial planner you must know that investors who remain diversified will do just fine. I am no more than an "advanced amateur" and came through 2001-02 with paper losses, but not killer ones. And we are now ahead of where we were back then. Why? Because I had put no more than 25% of my assets into tech stocks.
I doubt that RE is going to crash like NASDAQ, but all my new money has been going into the stock market for the last 3 years. And, I have been diversifying in the RE market, going from single family houses into 4-plexes in small retirement communities. No I don't expect people to retire into a unit in a 4-plex, but I do expect the people who provide services to well-off retirees to live there.
If true, this will just provide me the opportunity to get back into real estate investments...
" steep rise in the price of building materials and labor."
Um, that will make for a smaller supply thus a higher demand.
Over the next 5 years 6 million people will be moving to and retiring in Florida. They have cash from a home sale up north.
We've also got the people on the west coast fed up with California moving here.
But if you are flipping, its hard, because people are paying RETAIL MARKET for a house that needs work.
Means you might have to rent the place for while to let the Real Market Price rise to cover your fixup cost.
Trade the FOREX!
Something to keep in mind, the stock market bubble and collapse was on "actual money", not based on debt (except for the few who were on margin).
The real estate bubble has been built mostly on debt.
When the stock market bubble burst, people lost a lot of "paper value", but when their stock values dropped, they didn't have a loan to pay.
If and when the real estate bubble pops, the value of the assets (the house) declines, but the value of the loan does not. In fact the loan cost will continue to rise.
In the stock market decline, you could sell your stocks, even for a loss and walk away with some cash.
When the real estate market collapses, you can sell the real estate, but you may still have quite a bit of debt to pay off.
Good luck all.
The point is, they stopped making land a few years ago, so real estate may go in cycles, but, barring extreme cases, it will always go back up.
I agree!
Besides, I'll be USING it!!!
:-D
and the new bankruptcy laws are waiting for those people.
What is this? Bubble warning # 572? Or # 573?
I think alot of people are rethinking moving/retiring to florida - I know I have. too many people, congested roads, too many hurricanes.
p.s. I am a devoted fan of Ben Jones' blog on the housing bubble, too.
"I don't think Real Estate in Florida is going anywhere but up."
I think there's still some areas which will fall hard, though.
Friend of mine bought a house on Merrit Island for about $240k 5 years ago. His neighbor just sold for $550k (neighbor has smaller sq. footage, too).
That's what I call a bubble.
"I don't think Real Estate in Florida is going anywhere but up."
I agree with webstersII -- there is a massive real estate bubble in Florida.
The hurricane season is not over yet. How many more tropical storms and hurricanes have to rip apart and flood homes for people to wake up? Is there a glut of mobile homes on the market yet? "Tin coffins for elderly retired" would make a nice for sale sign.
Florida is Hurricane Alley How many tropical storms so far this year? 22. How many more will hit between now and November 30th? I predict another four hurricanes will hit Forida. Wilma is going to make history in terms of damage. Only three more hurricanes to go. Wait and see what happens . . .
Investment Outlook
by Bill Gross, October 2005
http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+October+2005.htm
uh, you don't have to refi at 90% LTV
What if interest rates go up?
You can talk about cal population moving out, but we had a net gain of 500,000 last year. Housing construction in Riverside county 6-7000 below demand.
This guy is very, very smart.
NOW (or two months ago) is the time to cash out of real estate holdings that you don't live in.
The time to buy is when recession forces people to sell at firesale prices.
Basic.
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