Industry Figure Tom Chappell

It strains credulity, seeing how badly people were burned in the dot bomb fiasco, as they rode everything from Enron to eToys merrily down to zero, but rather than being gun-shy, people are just being the same damn idiots that they were before, but this time with real estate.

It’s almost unbelievable the number of people that I know who have bought, or held onto, second and third homes as speculative investments. Don’t they understand that buying real estate is like buying stock on margin? If you buy a $1,000,000 home with $200,000 down, and then the home’s value falls by 20%, well, you’ve been wiped out! You’ve lost your entire investment! But all people see is that, on the contrary, if the home’s price rises by 20%, you’ll have doubled your money.

Well, it’s over.

SAN DIEGO — When the housing market here was red-hot 18 months ago, Alex Flores could buy a downtown condominium with as little as $5,000 down and sell it six months later for a tidy profit of $200,000.

Now, Flores says, those easy-money days are over.

Flores, a self-described real estate “flipper,” is trying to sell two condos. But neither has drawn an offer after being on the market for more than a month, even though he’s willing to break even on one and reduce the price on the other.

“It’s getting trickier now,” said Flores, 30, who became a full-time property investor three years ago after a short career as a senior financial analyst for a movie studio. “Everyone thinks this has peaked.”

Ha Ha! “After a short career as a [26-year-old?] senior financial analyst.” Did he ever spend any time as a junior financial analyst? And now, he and his kind are speculating in real estate?

Look, the market is getting soft, and this guy has two condos on the market, and he’s hoping to achieve a net loss on the pair of them. But no takers yet, after a month.

Oh, man, watch out, the sky is falling.

Full Story at the Los Angeles Times.