ubuy2w

When Expecting a 40% Total Decline in Housing Is Practically Bullish

Try to tell that to my inlaws who have had to move 4 times in the past 5 years because their landlord decided they wanted to sell the home to an owner occupier. For most individuals home-ownership is the right decision for the long term. For many individuals paying down a mortgage is a forced savings program for many it may be their only savings plan. I can appreciate the combination of a great landlord who is willing to basically write you a subsidy cheque each month is a great incentive and makes sense in markets like Manhatten and Malibu for the the very disciplined who are able to invest that subsidy cheque every month prudently. The simple undeniable fact however is that the overwhelming majority of individuals who end up with the best balance sheets at age 65 are the ones who purchase a home and pay off the mortgage during their working years. Is it the best investment an individaul can make not even close however for most people it is the only serious investment they will make. Not a realtor by the way just a realist.


On Apr 24 11:30 AM Think-About-It wrote:

> Renting is under-rated. It gives you personal flexibility/mobility,
> saves money on repairs/maintenance real estate taxes and insurance
> and is a lot less stressful than having a mortgage. It also allows
> you to save more which can be invested in better inflation hedges
> than real estate such as commodities, precious metals and at some
> point stocks (foreign) which will all out-perform domestic real estate
> during a period of rising prices and higher interest rates. At some
> point way down the road (10 -15) years from now perhaps the opposite
> will be true and R.E. will become a smart investment again; perhaps.
> But in the interim it's best to build your purchasing power as fast
> as you can.

When Expecting a 40% Total Decline in Housing Is Practically Bullish

Real estate always has been an intensely local market. The headlines numbers that Case-Schiller produce mask what is realy going on where the rubber meets the road. The price declines in the subprime cratered markets like Phoenix have been extremely severe much more than the 40% top line decline, in the lower end of the market 50 to 66 percent price declines abound. It is exactly in this lower to middle market were astounding values can be found. Perfectly sound 3 and 4 year old homes in decent neighbourhoods are selling at 50% of new construction costs. They are screaming buy me and smart investors are doing just that. The combination of extremely depressed prices combined with unbelievably attractive financing make residential real estate a smart choice at this juncture. I watched the bubble develop and predicted its popping even to the point of shorting Countrywide Financial in the summer of 2006. That said I would be extremely wary of purchasing a park avenue condo or a Malibu beach front property at present time and I believe that luxury vacation properties have a good deal farther to fall as well