Banking analyst moves to test his housing theory
By KRIS HUNDLEY
Published April 10, 2006
Dick Bove, a longtime banking analyst who lives in Pinellas County, is so sure Florida and the nation are in for a severe housing correction that he has put his own money on the line.
Bove said he recently contracted to sell his home in Pinellas Park's Bayou Club for $1.2-million, 157 percent more than he paid for it in 1994. Though a growing number of homes are sitting on the market unsold, Bove said he got an offer from the first guy who looked at the place.
Then Bove, who works for Punk, Ziegel & Co. investment bank in New York City, bid on a house in Lutz, offering 30 percent below the asking price. He was pleased, but not surprised, when his bid was accepted.
"I knew the house was one of 23 owned by an investor group," Bove said of his new home. "And with interest rates rising, the cost of owning such homes is up dramatically."
Bove said he would have preferred to rent a home for a while, rather than buy immediately. "But you don't have quality housing to rent in Florida," he said.
And who wouldn't prefer to hold on to their money when they have a crystal ball like Bove's?
"Housing prices in my view will drop 20 percent over the next 12 to 18 months," he said. "And there will be a 30 percent drop in housing starts. There's never a soft landing in a housing cycle."
[Last modified April 10, 2006, 01:54:16]
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