"thunder" wrote in message
...
On Tue, 20 Sep 2005 14:10:33 +0000, NOYB wrote:


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.

Don't misunderstand me, there are other forces at work. Just as the
overwhelming optimism is driving up the market, when reality sets in, the
pressures will be downward. Think, paying a note on house bought for $2
million, when the market says it is now only worth $500,000. There will
be quite a few unhappy people around who have to make some unpleasant
choices. Look, you bought your house to live in, on the water, in a very
pleasant town. Naples will retain value and will recover, but if I was
your brother, I'd wait a year. That $340K villa may once again be had for
$209K. Then again, it might be worth $700K, but *my* money wouldn't bet
on it.

I've been on the fence on how to advise him. Part of me believes as you do:
that $340k villa will drop in price once a correction knocks the speculators
out of the market. But if I'm wrong, then where does he live? If he pays
the $340k now, and then it drops, he can just stay in it until it goes back
up again.