LOL - Yoda is no Jedi... Yoda is a realtor or realto wannabe.

Secondly you say your house is worth $50K more? According to WHO... you have a firm offer, signed & waiting for close? Even then until the offer closes you don't know squat about what your home is 'worth'... no one does.

I have family in the Bay Area too and homes are no longer moving in their neighborhood - a few have sold but very few and most of those to speculators who aren't planning to live in them. Granted they live in the South Bay where a lot of job loss has been... But my family has no idea anymore what their property is worth because the 'stall' has hit... maybe start heading up again and maybe not. Hard to say but those are the facts in their area.

Maybe you want to make some big money and drive down San Jose way and start snapping up some of those bargains... you can get them for $50K more than they are asking I bet.

Someone who bought two or more years ago in a hot area has already seen enough appreciation to convert a 100% interest only loan into a conventional 80% fixed mortgage. Those who bought a little earlier may already be higher than any future drop in prices. Even speculators who have traded a time or two have probably made more than they would lose in a downturn. Those living on the edge leveraged to the hilt late to the party ones may take a hit, but easy come, easy go.

Just a thought... seeing the housing bubble and wondering whether people out to make money are somehow thinking about going short in real estate. Selling property (developments, future homes) which you do not own yet...

Cor - there are supposedly 'RE vulture funds' forming now... pooling cash. I've read about them in places like Vegas & Maimi... but I would be very cautious. They are the RE equivalent of 'short funds'... pretty risky business.

But I know people with money who are doing it privately... who have liquidated most of their RE holdings already (except for private residences) and are waiting and watching. Like Yoda they have cash - or short term paper they can liquidate fast. They will do very well I am sure just like their parents and grandparents before them.

And having patience and buying low is the key. One of my fathers friends just sold $25 million in land he bought for $50K in the middle to early 70s. It was a small distressed farm outside the Twin Cities in the middle of the 70s recession... now slated for development. My fathers friend had cash and snapped it up and sat on it until now. Now is NOT the time to buy.

Lets say that your niece is gambling, very young she is I assume she still has time to recover.

'Young, dumb, and happy' as they say here in the Midwest. They can start over. Many of us have myself included.

That is why I'm not really too worried for them... they are gambling like crazy and will probably lose considering how they positioned themselves and when. As your case points out - timing is everything. Their timing could not have been worse. You were smart to sell most of the properties - you'll have unbelievable opportunities to buy cheap again and maybe soon. Cash is always king.

But my niece will survive - we see her in the Midwest when they come back and visit them out on the coast when in the area and they know we all have spare rooms and extra food on the table... they won't go cold or hungry even if the poop flies... so maybe with that in perspective... it isn't such a gamble.