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homestead - Re: [Homestead] More on the "bubble"

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  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] More on the "bubble"
  • Date: Thu, 02 Jun 2005 14:42:47 -0700



A drop in value of 25% would wipe out most speculative buyers.

I've never seen such a drop.

The author points out that less than 1% of real estate is resold in less than
one year. Seeing as how one has to occupy a house for TWO years in order to avoid paying capital gains on the appreciation, you reckon there's some motivation to hold onto real estate for more than a year?

The fact I took is that such a stat counters the loose claim that the current strong appreciation is the result of lots of investors in the market. The classic southern California flipper sells the unit before escrow closes on his purchase or as fast as possible, happily paying his cap gains on the profit.






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