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August 25, 2006


John Rowe

Dick's comments are incisive and on the mark. But do not underestimate the effects of stock market values on residential real estate prices. Recall the crash of 2000 and the essentially sideways movement of the market since.
A home is a repository of value. If homes are rising and stocks are flat, where is the smart money of the young professionals going to flow? I suggest that it is this mindset that will sustain housing prices until there is a serious sustained rise in stock values.
All I know is that I purchased houses in the early seventies for 3% of their current value. Essentially I bought Microsoft.

Dick Lepre

Regarding Mr. Rowe's comment:

I see your comment as only being relevant to that set of folks who bought for speculative purposes. Take away any noticable appreciation and those folks will stop buying real estate for speculation no matter what equities are doing.

Removing speculative purchasing will stabilize values in a healthy manner.

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