From: "John A. Weeks III" 
Newsgroups: misc.invest.real-estate
Subject: Re: Florida Real Estate
Date: Thu, 21 Apr 2005 06:43:34 -0500

In article ,
 none  wrote:

> So, in your opinion, someone like myself who is able to buy in the 
> $175-200K range, should I wait it out for some of the insanely high 
> prices to come down and continue renting or do I try to jump on 
> something?  I am in no hurry to buy.  I have a very reasonable/below 
> market rent, and I am comfortable in my current situation.  I am in the 
> Tampa Bay area, and have been looking at a number of the Tampa/St. Pete 
> condo/loft projects.

I am not going to give you specific advice.  That is something
that you need to do for yourself.  But I will quote J. Paul Getty,
the oil baron.  In his book, How To Get Rich, he states the
main technique is to buy low and sell high.  When everyone else
is crazy to get into a market, that is when you should be selling,
not buying.  You shouldn't buy unless all of the other buyers
are on the sidelines puking their guts out because prices are
so low and they cannot sell anything to save their lives.
Given that, since real estate prices are high, I wouldn't be
a buyer if your goal was to increase your wealth.

It is possible that there is still some money to be made on
the high end of the market.  That means buying really higher,
and selling at an even more insanely high price.  This is
called the "greater fool theory".  Your profit depends on
a person to come along who is even more foolish than you
were to buy you out.  There may be a lot of those fools
today, but like a good game of musical chairs, when the
music ends, will you have a buyer, or will you be stuck
with something that could fall 50% in just a matter of
days?

Real estate prices are somewhat like stock prices.  You
are not dealing with averages, you are dealing on the 
margin.  If there are 100 houses and 100 buyers, the
market is in balance and prices stay up there.  But if
we have 100 houses and 99 buyers, we are out of balance,
and prices can drop significantly.  It only takes being
short one buyer at the margin for prices to drop.

-john-

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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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