Tuesday, October 03, 2006

Bueller? ..... Bueller?



You gotta love Ben Stein. He is truly a renaissance man who I have a great deal of respect for. This is nothing earth shattering, but I wanted to post it anyway.

From Ben Stein.

"In March of 1990, after two years of looking for a house during a hysterical real estate boom, I bought a modest home in Malibu for exactly $600,000. The real estate crash to end all real estate crashes began the next month. Within three years, I couldn'’t have given that house away. If I'd been able to sell it, I might have gotten $350,000 for it.

The price languished in the same miserable range for a few years, then revived, and then took off for the moon. By early 2005, I might have been able to sell it for $1.8 million.

“Then, in the early months of 2006, the real estate boom collapsed. I could put the house up for sale, but there are few buyers out there. I certainly couldn'’t get anywhere near what I could have gotten for it in early 2005.

There's a bit of a moral here. When real estate crashes happen, they rarely involve that elusive creature called "‘the soft landing." Yes, friends, when real estate starts to fall after a meteoric rise, it tends to fall hard."

1 Comments:

At 9:26 PM, Blogger kev374 said...

the man is spot on! Nobody realizes how aweful it was during the crash of the early 90s. Now, this bubble is far FAR bigger than anything in the 90s. The so called "soft landing" is just the denial stage that precedes each and every bubble collapse. We should all be scared of the tsunami that is about to descend upon us.

 

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