“I could say I bought for 50 cents on the dollar of last year’s price, because I did, but I think that’s a little bit of hyperbole because last year’s price was last year,” Gottesdiener said.
This purchase demonstrates an element of speculation which says that current “market prices” are higher than the purchase price. Much the same way that BofA thought that a stake in countrywide was worth more of their original $17 per share stake. “The market” proved them wrong.
This could backfire… or it could work out. One thing is for sure, sales of 50% discounts from the original prices would prove to be a 25% return for the new owners. That provides a lot of wiggle room that existing homeowners just don’t have. New homes will lead the way!
