[JimKing]

Originally Posted by LingLing

People have short memory when it comes to make money. Remember not long ago, there was an internet bubble. In Shanghai, some properties were just sold around $1000/ sf while American housing bubble was constantly reported in their news. It was obvious in 2005, the market was overheated. Belive or not, everyone knew that at that time. Everyone said "this is not normal" Yet, there are still a lot of people bought at that market.

History does repeat itself in different forms, thus each time set a record.

History has not repeated itself yet in Japan in regards to real etate. That market ran way up, fell hard, and has been flat for 15 years.

Be careful with cliches such as 'history repeats itself'. Some times it does, some times it does not.

[JimKing]

Originally Posted by FireballFL

A better question would be is how much Florida housing has dropped presently.

A good question. But the numbers we get are fudged with. Days on market is a classic. Take a house off the market, change the price by $1000...hey, no days on market!

Sell a house for $500,000, kick back $50,000 in various costs...hey, that house sold for $500000!

We have to rely on what our eyes and the real world tell us. How many for sale and for rent signs in the neighborhood you are looking to buy in? What is the average income of that area? At what rate did houses appreciate there fom 1980-2000?

When people tout the Harry Dent's of the world as to why Florida real estate is just fine....we still have years to go until reality sets in.

[LingLing]

Originally Posted by JimKing

History has not repeated itself yet in Japan in regards to real etate. That market ran way up, fell hard, and has been flat for 15 years.

Be careful with cliches such as 'history repeats itself'. Some times it does, some times it does not.

I am not sure Japan is a good example. Japan restricts foreign investment when comes to real estate. Japanese family tends to live at the same place for all their life. Here people seem to move around a lot. In Japan, if you work for a company, the company tends to provide housing (no need to pay rent. You just pay power and water) so there is no incentive to buy. When I was working in Japan from 1995-1998, my company gave me a three bedroom ocean front condo to live. Why do I buy or rent? If the rent is not 100% subsidized, at least a good portion is. If my company here pays my rent, I won't buy either!!!! Anyway, I will go ask about real estate to my Japanese friends. Most of them are so used to live in company condos that they don't know anything about investment in real estate. I will try anyway.

[crystalblue]

Broward home prices down 2% as sales drop 22% -- South Florida Sun-Sentinel.com (http://www.sun-sentinel.com/business/sfl-flzhousingbr0828nbaug28,0,1760583.story - broken link)

starting to drop a bit...

[tallrick]

30 years of rising property prices has made people think they can never drop. Reality will set in over time. Miami will be the last holdout but by then the US economy will be in free fall or a hurricane will have bowled over any confidence in foreign investment or "Baby Boomers".

[LingLing]

I forgot to mention that retired Japanese population is well taken care of by social programs and their kids. Here everyone wants to make a good amount of money when they are able so they can retire comfortably.

[JimKing]

My point was not comparing Japanese and US real estate, they are different systems. My point was that in the case of Japanese real estate, it ran up fast, then dropped, and has remained flat.

I used it as an example of history not repeating itself. Japanese real estate has not bounced back up.

Some posters have said that real estate will come down a little, then another boom will cause prices to rise even higher than the 2005 peak. They implied that all real estate works like this.

I simply stated that looking at the Japanese market, we have yet to see another big bounce up.

[JimKing]

Those that say large price drops will not/have not happened....here is the latest report from the NAR. This is the price drop from July 2006-July 2007. You can read the story for yourself at money . com.

Palm Bay-Melbourne-Titusville, FL $183,300 -15.0%

Now add in inflation, which may be as high as 5% You are up to 20%. Then figure all the silly kickbacks that inflate sales prices. These kick backs have escalated in the last year.

Then figure that inventories are at record levels in that area, more and more people are getting to the end of their financial ropes in those areas. Also, the amount of mortgages resetting over the next 2 years is staggering.

That area has already dropped at least 20%, maybe more, when adjusted for inflation, in just 1 year. Going forward, things will accelerate. It is totally realistic that Palm Bay-Melbourne-Titusville market will be off its peak by 50%-70% in 2-3 more years.

So people should not laugh at a 70% worse case scenario. It just might happen in the most bubbly of Florida markets.

[backtofla]

interesting video on youtube.com about the condos going for 145k instead of 300k. the thing is, this was a developer trying to get rid of his/her inventory that investors had backed out of. he/she is just trying to get them off the books. on the other hand, i dont think you are going to be able to pick up a homes and land magazine, and see houses selling for 145k when they were originally priced at 300k. this youtube.com was an example, but it is very rare.

[TriMT7]

Originally Posted by JimKing

2. A CD currently pays about 5%. Starting with 2006, please call us when the majority of Florida housing appreciates 5% a year after carrying costs.

I'm getting over 5% in an online money market savings account! With no penalties for withdrawal!