"thunder" wrote in message
...
On Mon, 19 Sep 2005 12:44:45 +0000, NOYB wrote:


I agree. But I don't think prices will "correct". They'll plateau and
stagnate, but not fall significantly. Demand is increasing
exponentially
with the baby boom population retiring.

A real estate bust is not like a stock market crash. Any corrections will
not happen overnight, but they will occur. A very general scenario,
right now, your market is overheated, they are building like crazy,
everybody is getting fat, and the market will never go down. But watch,
you see a couple of buildings completed, usually a retail unit, with no
occupants. Same with a house, here or there, completed with no one moving
in. Six months later, it's bust. The switch has been thrown, and there
will be no new starts. The well financed builders will complete their
projects and hope for the best, the less well financed will leave theirs
incomplete. Now comes the corrections.

The prices will remain high, because no one is willing to sell for less
than they paid, but those that thought they were going to get rich,
leveraged to the max, can't make the payments, will either walk or declare
bankruptcy. Those that have to leave the area, for whatever reason, will
have to take the hit. That's the bottom. Then there are those, such as
yourself, who bought a house to live in, they'll ride it out.

Excellent synopsis. So the only thing that will drive prices down will be
those folks who *must* sell because they can't afford the payment on an
investment that they can't rent out. That is precisely why DSK's idea of
rental properties makes less sense than dumping all the money into your
primary residence. When you live in the house, you can afford to ride it
out.



I read somewhere
that speculators are a third of your market.

I've read up to 40% in some areas like Punta Gorda. It's much, much
lower
in Naples.

Nothing against speculators, but if they are in the market enough to
effect the market, it's a dangerous market. They don't really add
anything to the market, they just take from it.

They are definitely parasites on the housing and gasoline markets.