Subject was the headline of a recent article published by www.bloomberg.com
Either LENNAR believes the market will crash further or they are clearly facing a “cash crunch”. I would overweight the “cash crunch” scenario as the primary reason for such impressive discounts, although lower prices are likely over the next few months.
Will Wall Street’s “smart money”, Hedge Funds and the likes become the great beneficiaries of this real estate buying opportunity?
The irony is Wall Street benefited from the creation of the real estate bubble and now will benefit from it’s crash.
What about John Doe, will he get his slice of the action? Not is he plans to wait for this market to bottom, a process which is clearly under way!
Smart Money has started to make it’s move. No coincidence that recession is all over us and the FED will most likely lower rates another 200 bps or more over the next 6 months. Lower financing rates will likely be another reason to jump start the real estate market.
By the second half of 2008, I feel sellers will be more hesitant to “aggressively discount” their properties.
In any event, with LENNAR’s recent announcement an other similar news to follow, I am more and more incline to believe that the best buying opportunities will happen over the next 6 months…
I welcome your thoughts.
