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Old 10-21-2005, 05:44 PM   #27
secondcurve
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Default Good Points

Orion:

You make some good points. However, I disagree that docks are in a seperate category than lake front real estate. I think it is just a little easier to see the over valuation in this asset category since we all know what the price of a rental slip is. It is more difficult to anaylyze the price of a home versus renting, etc. but I think the over valution may be just as severe. A couple of interesting points I have recently are as follows:

1) Bubbles are almost always built on excellent fundamentals. The point is demographics for retirement real estate is strong but do they justify any price?

2) Japan is and Island. I know I cited this fact previously, but think about its real estate market a little further. Certianly the island of Japan is a little bigger than Cow Island, but it is an island none-the-less and by definition there is limited land on an island. Japan is also the world's second biggest economy, with an aging population very similar to the USA. In the eighties the fear was that Japan would take over the world. Yet, Japan's real estate market has been horrible for years after a period of strong out performance. How can this be?
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