Posted by dd on May 26, 2005 at 14:13:38:
Wow, did you just become aware of this from our postings here? If so, 'good to know they’ve been caught ‘red-handed.’
New American Pastime - Real Estate Day Trading - Posted by Pookie Wookie
Posted by Pookie Wookie on May 25, 2005 at 09:18:53:
Speculators Try to Cash In on Housing Boom
May 24, 2005 ? A speculative fever has taken hold of the real estate market, attracting a whole new class of investors looking to get rich quick.
April home sales came at the fastest pace in history ? according to the National Association of Realtors ? selling at an annual rate of 7 million homes a year.
The boom has pushed housing prices to an all-time high. The median price of a home sold last month was $206,000.
Almost a quarter of the homes are being bought by speculators, who don’t intend to live in the homes but instead plan to make money off their investment.
Two years ago, Anthony Behary was repairing transmissions, making an annual salary of $40,000. Today, the former mechanic is a full-time real estate investor.
Earned $120,000 in First Year
“In the first year of business doing real estate, I made $120,000,” Behary said. “I tripled my income.”
Behary is one of a growing legion of Americans trying to cash in on real estate values that seem to go nowhere but up.
Earlier this month, 46,000 Americans hoping to get in on real estate frenzy packed the Los Angeles Convention Center for a Real Estate Wealth Expo ? the slogan: “One Weekend Can Make You a Millionaire.”
Home prices have been increasing at the fastest pace in 25 years ? up 15 percent over last year ? while the stock market goes nowhere. Stock investment clubs are down 16 percent since 2003 while real estate investment clubs are multiplying ? up 45 percent since 2003.
Experienced real estate investors say many of these stock market refugees are late to the party and have unrealistic expectations.
“A lot of people were burned in the stock market, and there will be people who will be burned in real estate,” said James Smith, president of the Houston Realty Investment Club.
Behary, the mechanic turned real estate investor, isn’t worried about getting burned. Later this week, he expects to get a check for $65,000 ? his profit on the sale of a house he bought just five months ago.
Gee, forget to mention the rest of the story? - Posted by Bill Bronchick
Posted by Bill Bronchick on May 25, 2005 at 13:57:21:
May 18, 2005 ? WASHINGTON (Reuters) - The U.S. housing market may appear frothy, with prices still notching double-digit gains in many areas, but it’s not a bubble set to burst, economists and industry executives argue.
In fact, many economists say worries that housing looks a lot like the toppy stock market of the late 1990s are misguided and ignore the fact that real estate is a local market, not a national one, driven by local employment conditions.
Deja vu… - Posted by Ben (NJ)
Posted by Ben (NJ) on May 25, 2005 at 10:53:46:
although I haven’t given much thought to the “bubble” theory, there are some amazing deja vu moments with the tech stock crash. I remember being on a flight from Las Vegas shortly before the tech stock crash and in the aisle next to me were a bunch of drunken, hard gambling Jersey City cops. In between stories about blackjack and the hookers they picked up in Vegas, they discussed how Disney had just split 3 for 1! (Jeez, I should have dumped JDSU right then and there!) What I am seeing personally is also pretty disturbing. I just got an offer in on a property for $395,000,$394,000 of which is financed. I balked at even accepting it but the mortgage broker assures me it will get approved and this stuff happens “all the time” now. Highly leveraged, interest only loans with big fat balloon payments at the other end, happening “all the time”. Hmmm.
Re: Gee, forget to mention the rest of the story? - Posted by Pookie Wookie
Posted by Pookie Wookie on May 25, 2005 at 15:15:18:
No. If you recall, “not all” stocks where driven to unsustainable prices - it was the “Dot Coms” for the most part. The same can be said with the current Real Estate Investing frenzy. Not all markets are displaying irrational price increases.
RE is a Local market, not a national one. - Posted by dd
Posted by dd on May 25, 2005 at 14:11:02:
…“In fact, many economists say worries that housing looks a lot like the toppy stock market of the late 1990s are misguided and ignore the fact that real estate is a local market, not a national one, driven by local employment conditions.”
That’s a vital point that is understated…I have definitely found through online and direct research that this is the case. One has to be diligent though but significant opportunities can be found in ‘pockets’ throughout the country, even now in 2005.
Re: Deja vu… - Posted by Sailor
Posted by Sailor on May 25, 2005 at 18:10:28:
As someone who survived the 1990 RE market in Orange County CA (when residential RE suffered a 20% sudden drop right after a Chapman College [now University, I’ve heard] economist 's prediction hit the papers), I think things are going to get worse.
However, if you make your $$$ on the purchase, you’ll survive the sale in a bad market. In the early 90’s it was those who had invested in the bottom or top of the RE market who came out best. It was the mid-range housing that took the big hit. If investing, I think it is best to not think about getting a sfr or other property that is someplace I would like to live–my preferance is for lower middle-class housing, which I think surves market turndowns much better.
Re: Deja vu… - Posted by Sean
Posted by Sean on May 25, 2005 at 11:02:46:
Folks with paper manipulation never survives major corrections… folks with real equities do… just food for thought.
Re: Gee, forget to mention the rest of the story? - Posted by Hersh
Posted by Hersh on May 25, 2005 at 19:58:46:
Not so Pookie. When the bubble burst in the stock market it brought MANY MANY blue chip stocks down with it. Companies that had little or no connection to the internet or technology sales for revenue sources.
That’s how the stock market works. Just take a look at the returns of blue chip growth and income mutual funds when the bubble burst. The returns are terrible yet they did not buy dot coms. They bought stocks like GE and MMM and MRK and WMT and HD. The stock market is a bit different than the real estate market in this respect.
plagarism - Posted by Bill Bronchick
Posted by Bill Bronchick on May 26, 2005 at 09:37:29:
Yes, they copied this point directly from an article on my website.
Re: Gee, forget to mention the rest of the story? - Posted by Pookie Wookie
Posted by Pookie Wookie on May 25, 2005 at 20:48:00:
I realize the stock market as a whole corrected during the Dot Com mania. Blue Chips valuations where based on proven earnings and solid fundamentals. Dot Com stocks like “The Globe” where pie in the sky speculations on Companies that had no proven earnings and mounting debt and went from pennies a share to 100’s of dollars a share.
If you read my post, I think I made an accurate statement “not all stocks where driven to unsustainable prices - it was the “Dot Coms” for the most part.”
Taking the stocks you listed above - they haven’t Tanked like the “Dot Com’s” I was referring to.
2000 - 2005
GE $60 - $40
MMM $45 - $80
MRK $65 - $33
WMT $47 - $47
HD $50 - $40
The only big loser - Merck, lost value not because of irrational speculation.
http://money.cnn.com/2002/03/14/pf/investing/mag_merck/
"With a portfolio of blockbusters such as Zocor for cholesterol and Pepcid for heartburn, Merck towered over rival drugmakers in size and stature.
Then Merck just seemed to topple. Four of its biggest drugs lost patent protection in 2000 and 2001, exposing the firm to ferocious competition from makers of generic drugs."