Wednesday, March 02, 2005

Why Stress Pricey Condo, Not Single Family Houses?

I think the lead paragraph New York Times article about the surge in second home sales was a bit misleading.

Datelined Sunny Isles, Fla., the story led off with the tale of a couple who bought and sold two condos, then two houses, and now are putting a deposit on a $1.3 million condo in a high-rise under construction.

Yet the National Association of Realtors study, which prompted this article, pointed out that the vast majority of investment property purchases -- 83 percent -- were single family houses. And the median price was a modest $148,000.

As a former Times reporter I can tell you one thing: the splashy figure of "$1-million" in the lead is more likely to get you on Page One than "$148,000."

I was also puzzled by the reporter's comparison of investment home buyers to "the day traders of the 1990's dot-com boom." Do any of you real estate pros out there think the speculation has reached that kind of frenzy?

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