Re: real estate questions....
Camus
In the early 90's the loose credit standards of the S&L's cause a real estate bubble which burst in the early 90's taking down several banks.
Buyers and sellers set the price of real estate.
Real estate bubbles also occur when investors drive up the prices of real estate without actually occupying the building. I believe this is happening in Las Vegas right now. Investors get into trouble when they can't afford to carry the cost of the investment (taxes, interest, insurance) and are forced to sell cheap or are forclosed by banks who then sell cheap. Usually in a real estate bubbles the cost of buying is much greater than the cost of renting.
A property is a good price if it trades at or near recent comparables but these prices can vary widely just like stocks. A safe real estate investment thesis is to buy where land is scarce (ocean front, dense suburbs) and income levels are high (NY, LA , Boston and SF)
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