But nothing has inherent value. Not even land. How much do you think the area around Chernobyl is worth? If you were selling your house and I buried 10,000 pounds of unremovable toxic sludge in your yard, your property would be worth absolutely nothing. In fact, we have customers whose land is worth $0 for that very reason.

Most property could indeed be sold for something, but when you have a $300,000 mortgage on a house that is now worth $175,000 you are not in a good spot!

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I wasn't born with enough middle fingers.

Why? Because you buried 10,000 pounds of unremovable toxic sludge in your customer's yards? Why would you do that? LOL

Since private people don't usually have access to 10,000 pounds of unremovable toxic sludge, a homeowner whose property were so violated would still have a property worth more than $0 -- even if no one would buy the property -- because the homeowner would have a lawsuit against those responsible (or did Bush and pals "reform" the legal system to make such lawsuits moot?) for the damage to the property.

No, you aren't. But you are in far better shape than a person who owned 1000 shares of some dot.com company that went out of business. The house will likely gain its value back (eventually). The shares in the dot.com are scrap paper.

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"George W. Bush surrounds himself with smart people the way a hole surrounds itself with a donut." —Dennis Miller

Here in the U.S. we love debt. Heck, we'll buy a candy bar on credit. I was gonna buy a Granola bar for cash, but the rate and terms on the Hershey were too good to pass up.

There was a good article about this in the NY Times Business section this weekend. And there are several TV talking heads going back & forth on the topic this morning. Here's a tidbit that I was alluding to. In 2002-03, interest only home loans made up about 1% of the total real estate loan market in California. Last year, they made up nearly 42%. With those things, not the first penny of a payment goes toward principle. And at some point, there's going to be a balloon payment. So, when the balloon hits, and you have to refinance or renegotiate, what do you do if the home's price doesn't allow you to cover the loan-to-value ratio? Well, you just sell the house. Again, what do you do if the market value won't cover the balloon's principle?

42% is a too large a percentage of the market for this type of financing (IMO). I've used them for investment and commercial loans. But there, you have income to cover the payments and I wasn't chasing a price up the ladder. Add in the ARM's that are coming back into vogue, no doc/low docs and other nonconforming mortgages, so how can anyone not see that as a potential problem, at least in certain regions?

Days on the market is beginning to lengthen in Palm Beach and Denver. Hang on, EiregoSod. You may be able to pick up something NICE over here relatively cheap... the courthouse steps is a good place to buy property.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."

old-fashioned but 20 years ago the rule of thumb was that you should be able to get a 10% return on your investment per year on realestate investments. Unless a property is unrentable, it usually has very real value. If interest rates continue up, more people will choose to rent. What I find remarkable is that people are paying prices that bear no relationship to the income potential and are relying (I guess) on the hoped for bubble expansion. Unless one is so wealthy it does not matter, that seems a risky place to be.

For people who can work anywhere, there is still plenty of reasonably priced real estate- Down East Maine for example- The other day I was paddling around among porpoises, eagles overhead and thinking-Paradise! Well at least till the fog rolled in!

We are jerks that way!

Only depending upon when it occurred. Further, as you well know, having a lawsuit and winning a lawsuit does not mean you get any actual cash. And it also does not mean you get more than you paid for the land or owe on the land. You could easily end up in the hole.

Again, it depends. Most people sold before the stock hit zero, so they were not out everything. Sure, most of the time the housing market comes back. But if you are forced to move (you lost your job and had to move, for example), you will be out wads of cash. Possibly more than your neighbor lost on a dot.com stock.

It's true that land is generally safer than a single dot.com stock. That's obvious. It will also tend to hold value over time. No argument there. But it still has no inherent value. In some countries you cannot even buy or sell it. Everything is only worth what someone is willing to pay for it. It could easily be the case that no one is willing to buy your land for whatever reason, making it worth $0.

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I wasn't born with enough middle fingers.

the tech bubble hurt because stock values plummeted literally overnight. That will not be the case with real estate, they will likely level off (especially in places like Boston and the Bay area), but they will not collapse. In order for that to happen supply is going to have to highly outpace demand in a short period of time, the only way that happens is by a drastic cut in population and/or income. Income is up in Mass and population, while down, is essentially flat. Demand is still high because of limited inventories (and rates are still low).

This has essentially happened only twice in recent history, the late 80's/early 90's in the northeast and the early 90's in California. Those were burst bubbles instead of a leveling off and most economists don't see anything like that in this case. A leveling off might hurt the economy as it is comprised now, however jobs in other industries are on the rise and the article doesn't take into consideration that the GDP from r/e can be replaced by that of other industries.

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All you need to know about the energy crisis:
ANWR Exploration Republicans: 91% Supported. Democrats: 86% Opposed.
Coal-to-liquid R's: 90% YES. D's: 78% NO.
Oil Shale Exploration R's: 90% YES. D's: 86% NO.
Outer Continental Shelf Exploration R's: 81% YES. D's: 83% NO.
Increased Refinery Capacity R's: 97% YES. D's: 96% NO

SUMMARY: 91% of House Republicans have historically voted to increase the production of America’s own oil and gas. 86% of House Democrats have historically voted against.

I stated very clearly that real estate was far safer. But it still has no inherent value. Luckily, we 'mercans tend to place a very high value on it.

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I wasn't born with enough middle fingers.

not your post...just to clarify.

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All you need to know about the energy crisis:
ANWR Exploration Republicans: 91% Supported. Democrats: 86% Opposed.
Coal-to-liquid R's: 90% YES. D's: 78% NO.
Oil Shale Exploration R's: 90% YES. D's: 86% NO.
Outer Continental Shelf Exploration R's: 81% YES. D's: 83% NO.
Increased Refinery Capacity R's: 97% YES. D's: 96% NO

SUMMARY: 91% of House Republicans have historically voted to increase the production of America’s own oil and gas. 86% of House Democrats have historically voted against.

As Kurt Cobain said, "All Apologies".

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I wasn't born with enough middle fingers.

I found that article on lexis nexis. pretty informative, advised people to do as much research as possible before getting a mortgage.

I re-read your first post. Dayum, Mike Milken wannabees. LOL. This time instead of entreprenurial , property investors are buying into the least productive things in any economy

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I have something to hide.