Wednesday, August 29, 2007

Who Says You Can't Lose Money in Real Estate?

Boom of condo crash loudest in Miami Speculation never works in the long run.
Just how many other speculators face the same dilemma in the nation's most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami's downtown, will flood an area already saturated with 23,000 condos listed for sale. An additional 40,000 units have been approved, but analysts doubt the majority will break ground.
That is an awful lot of condos....

While the frenzy lasted, you could make money - the difference between the pre-construction price, and what you could sell for when the unit was finished. That didn't last. The result?
Now, foreclosure filings are up by 30 percent in greater Miami over last year.
So when the Left is all excited about the eeeevil banks foreclosing on the poor, downtrodden homeowner, remember that a lot of them are speculators who weren't smart enough to pull out before the end came.

People who aren't used to investing, almost never look at the downside. What if your wonderful investment doesn't work out? What is the potential cost? Real Estate speculators in the Florida condo market never expected to have to get a mortgage and actually own the units. In some cases they signed contracts for units they really couldn't afford to own. They expected things to work out for the best, and never made a contingency plan. They never considered the downside risk.

Now there will a cry to protect the poor and the downtrodden for the eeeevil bankers and the foreclosure process.

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