Real Estate Slump

Resident 2B · 11-06-2006, 08:34 PM

Tom C,

Sounds good to me.

I believe there is some reality to what you have proposed. However, on the flip side, when economies go down, the second home is one of the first things to go.

If the economy stays strong, I believe the baby boomers will have some positive impact on real estate prices in the region in the next five or more years.

It is also believed that these boomers will be looking for warmer climates, but not hot climates. We lose on that variable.

It is all one big balancing act between so many factors. I do not think it will be as bad as the last drawback, but time will tell. Long-term, lakes region property should be a good place to put your money, as long as you can cover most of the purchase cost without going to the bank. If you have a 80% mortgage at 6% interest and you are also paying high property taxes, the property would have to go up 10% each year for you to make anything. The high property taxes are a negative factor in the market when you try to sell.

That said, there are very few, if any, more beatiful places on the planet than the area around our lake. That is why we bought here and intend to stay here.

Good luck!

R2B

onthebay · 11-06-2006, 09:38 PM

I guess it all depends on timing. If we had been able to build the new house last winter instead of this spring we would have been ready to sell the condo when things were still moving. The idea was to move everything over when the house was finished and then sell the condo.
It looks like we will try to rent it out for a year or so and see where the markets goes.
On the bright side by renting it will then become eligible for a 1031 exchange when its time to buy the condo down south.

11-06-2006, 08:34 PM	#1
Resident 2B Senior Member Join Date: Apr 2004 Location: North Shore, MA Posts: 1,357 Thanks: 994 Thanked 313 Times in 163 Posts	Baby Boomers Tom C, Sounds good to me. I believe there is some reality to what you have proposed. However, on the flip side, when economies go down, the second home is one of the first things to go. If the economy stays strong, I believe the baby boomers will have some positive impact on real estate prices in the region in the next five or more years. It is also believed that these boomers will be looking for warmer climates, but not hot climates. We lose on that variable. It is all one big balancing act between so many factors. I do not think it will be as bad as the last drawback, but time will tell. Long-term, lakes region property should be a good place to put your money, as long as you can cover most of the purchase cost without going to the bank. If you have a 80% mortgage at 6% interest and you are also paying high property taxes, the property would have to go up 10% each year for you to make anything. The high property taxes are a negative factor in the market when you try to sell. That said, there are very few, if any, more beatiful places on the planet than the area around our lake. That is why we bought here and intend to stay here. Good luck! R2B

11-06-2006, 09:38 PM	#2
onthebay Senior Member Join Date: Sep 2005 Posts: 114 Thanks: 0 Thanked 3 Times in 2 Posts	Timing I guess it all depends on timing. If we had been able to build the new house last winter instead of this spring we would have been ready to sell the condo when things were still moving. The idea was to move everything over when the house was finished and then sell the condo. It looks like we will try to rent it out for a year or so and see where the markets goes. On the bright side by renting it will then become eligible for a 1031 exchange when its time to buy the condo down south.

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