"thunder" wrote in message
...
On Tue, 20 Sep 2005 17:21:16 +0000, NOYB wrote:


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.

Yeah, my Crystal Ball is a little cloudy too. It's a tough call, but
ultimately housing's real value is to live in, not to make money on. If
he can afford it, and he is planning to stay in Naples, then . . . maybe.
The values are relative to the market. He'll only take a big hit, if he
has to leave the Naples market. That is, provided, Naples hasn't been so
overvalued that prices don't recover. I don't see that happening. Naples
is a very nice town and it will cost a premium to live there. Myself, I'm
just reaching a cautious age where I would be very hesitant in that
market. Your brother, maybe he hasn't reached that age. ;-)

My brother is 32. He'll recover from whatever bad choices he might make
right now. But if the choice is to wait and see if prices fall, and they
don't fall, he may have denied himself the ony opportunity he'll ever have
to own a house in Naples.

At least he's smart enough to max out his 401-k...and has done so for the
last 7 years. And he's unwilling to reduce his 401-K contributions just to
afford a more expensive house.