Stray comments concerning the impending real estate crash perked up my e-mail on an otherwise dull Friday. I received from various sources, respectively, a CNBC report that 85% of the buyers in Miami's condo market are speculators (probably true, according to an old friend of mine, a mortgage buyer who lives in a luxury high-rise on Miami Beach. I can attest that whenever I've visited her, the swimming pool and patio have been nearly empty of human traffic, other than some kids from places like Argentina, Brazil and Venezuela.); also, there was an article by Robert Shiller suggesting that home prices will crash as spectacularly as they've risen, but that the trigger will not necessarily be higher interest rates and/or recession. (I agree about the crash but am not persuaded by his argument that neither higher rates nor recession will prove fatal. Shiller notes that L.A.-area home prices continued to rise for a year after mortgage rates peaked at 16% in the spring of 1980. These days, though, household debt is so absurdly high that, in my opinion, even 7% mortgages would trigger an economic avalanche). There was a second article concerning the South Florida boom, which Jim Grant sagely pointed out is not, as local realtors are wont to proclaim, 'a totally new economic model'; also, a dog-bites-man news story about still more bookkeeping shenanigans at Fannie Mae; and, finally, a direct-eMail promo from a guru who purports to know how we can all get rich from the coming real estate crash. Surviving the Crash Concerning the last item, even if said crash is the once-in-a-century disaster that a few of us expect, I seriously doubt it will produce commensurately spectacular opportunities. Of course, many valuable assets will go on the block for distress prices. But to be in
LATEST TRADES
