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This Rentlaw.com article discusses
the continued drops in home prices in most of the United States. May 2007.
Discussion began in May 2005.
There isn't one article in the past several months
that talks about "rebounding" real estate prices. One of the only few
places in the United States where prices remain "strong" is in New
York City, but even there, prices have cooled somewhat.
Many US homebuilders where busy building away even
in 2005 as the talk of a real estate bubble escalated. Many investors, lured by
"cheap" money, huge jumps in equity of their principal home or other
investments, jumped in and created additional demand for housing. Today, many of
these investors are sitting looking to sell these tract homes or condos.
My dad (not a "rich dad", but a cautious
one), always told me about the stock market and buying stocks - "..don't be
a hero". What he meant was simple - if you buy and it begins to drop - GET
OUT and take your loss. Don't stick around watching the value of something
continue to sink in hopes it will rebound. MOVE ON. If it rebounds, ok, if not,
you risk your credit, your savings and the risk of losing your own home, had you
borrowed from your home equity.
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In May
2005, we published a newsletter titled " Real Estate Bubble of
2005? 2006?". We're not claiming to have a crystal ball, but read
time and time again the Fed Chairman's comments and were watching real
estate prices here in New Jersey as well as Florida run. Friends in
Florida told us to BUY BUY. I said WHY, WHY? New Years 2005 I listened
to a tax attorney to high net worth clients talk about South Beach. I
asked about the 70,000 units coming on the market in the next 2 years.
"Don't Worry". I didn't. I didn't buy either. It
was and is so much cheaper for my current lifestyle to RENT if I choose
to vacation on Florida. SO I pack a few bags and go. And Save. See the
following snippet of our May 2005 article. |
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Greenspan
talks....
WASHINGTON, May
20 2005 - Alan Greenspan, chairman of the Federal Reserve,
suggested on Friday that the red-hot housing market is becoming
a little too exuberant for its own good.
"Without calling the overall
national issue a bubble, it's pretty clear that it's an
unsustainable underlying pattern," Mr. Greenspan told the
Economic Club of New York at the Hilton New York hotel in
Midtown.
Mr. Greenspan emphasized that he
sees no sign of a nationwide housing bubble, but he acknowledged
concerns over "froth" in the market and pointed to a
big increase in speculation in homes - particularly in second
homes. As a result, he said, there are "a lot of local
bubbles" around the country.
See our complete May
2005 article on the Housing Bubble |
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The following from our
Home Buying Guide
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