Every year Byron Wien comes out with his Top Ten Surprises for the New Year, and for 2003 his number six surprise is: "The housing bubble
doesn't burst; it grows larger." I was thinking about that prediction when some friends told us the story of their recent condo sale.
Last year they bought a small condo in Evanston for $285,000. It's a nice place a few blocks from the lake, but it's kind of small and they
needed a larger space for their two kids. When
we first visited their home I thought to myself: "they overpaid." Last week they put a little sign in the window, For Sale By Owner. Our friends
decided to ask an "outrageous" amount ($350,000) because they were willing to rent it out if it didn't sell immediately.
The next day a
young couple came by, saw the sign, knocked on the door, and took a look at the place. Within 10 minutes they said: "We'll take it!" No haggling,
no appraisal... they just whipped out a checkbook and wrote a check for $350,000 on the spot.
Anyway, that story makes me think Wien might be right.
His stock picks in the home building sector are Centex and Lennar, both strong relative performers.
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