Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Don't Go Rushing Back Into the Residential Real Estate Market

Every few weeks I get a warm and fuzzy feeling when I see my old house for sale in the Wall Street Journal. It was an 8,000 square foot two bedroom white elephant perched on a mountain peak, with panoramic 360 degree views of the San Francisco Bay Area. I picked it up for a song from the Sultan of Brunei in 1998, when crude crashed to $8/ barrel, and he was dumping properties to meet a cash flow crisis. The actor, Steve McQueen, had owned the property once, and the local teenagers used to park out front and make out, taking in the stunning view of the Golden Gate Bridge and shimmering city lights. The parties! Oh, the parties! But one day in 2005, my gardener, José, mention that he had just obtained a $500,000 loan to buy a new place in which to house his seven kids, along with a home equity loan to cover the first year’s mortgage payments. How would he make the next year’s payments? The broker said the value of the house would go up, and he could then increase his home equity loan to cover that too. I knew I had to sell my home immediately, hitting the bid for a tidy $12 million, along with the rest of my real estate holdings. Regretfully, I had to let José go. I have been renting ever since. The last price I saw for my former “Xanadu” was $7 million, or I could lease it for $19,500, which I know is 20% of its carrying cost. I’m not a person who normally wishes ill on people, but really, what were these buyers thinking? When people urge me to buy it back, I lie down and take a nap, and when I wake up, the feeling has refreshingly gone away. And to the pundits and prognosticators who tell me that we are about to launch into a “V” recovery in residential real estate, just as the stock market has already done, I tell them I have this really neat bridge in Brooklyn that I’d like to sell them. And no, I won’t be uttering the word “rosebud” on my deathbed.