Its more about how long a person wants to stay in a house they buy right now. If looking for a flip or just a couple year stay, then its a big risk with the probability of being a loser. Buy a house now knowing you will stay for 15 or more years, than it will appreciate.
Check any house on zillow.com or follow sales chains (or talk to valley real estate agents) - that's simply not true. I do see them back at 2006 Jan prices, but not even close to 2005 prices and you are talking about a market that for sherman oaks (for example) when from an average price in 1999 of about 320k to an average price of nearly 850k.... that's in EIGHT years.... Most of the people in that area would have made more off their homes than their jobs. So - Why would it be so shocking even if it were at 2005 prices..... Frankly - I think it needs to roll back to at least 2003 prices in order to feel like a bargain. In CA we have the Prop 13 where your tax is high but never raises... but your stuck with your high tax another thing which is killing home owners who bought at the peak. So - when those Sherman Oaks homes are sitting around 500k, then I'll be impressed. But right now I feel like people are being shocked over the wrong thing. They should be shocked that prices ever reached where they went.
Gnome, Wake up to what exactly ? My point is that Democracy never really worked the way it was sold to us. America works because it is broken - Always has, Always will. People for the most part only want to talk about change, until it effects their lives, then there not so happy about paying the price.
Your example is not correct at all. Here is a real life scenario. I bought my first property in 1988 for $60,000 and over 2 real estate down cycles ( where you couldn't see the light at the end of tunnel as posted by some people here) The house still sits there and is worth $600,000. Now how do classify that kind of wealth building over the years? Real estate will double and triple over the years. Not only that it gives a handsome cash flow.. Now you tell me you how you can do that yourself if you bought real estate now, that will double triple in few years? In real estate you make money rolling forwards, not backwards. Understand that principle and you will be wealthy.
You will never see the day when those houses will be sitting at 2003 prices. This is where retail buyers become " Real Estate Speculators" and torpedo their own chances of setting foot in a house. Those prices will never come. Beside by waiting out under your delusions, you have made it harder to buy since you need a 10% down payment in Los Angeles county. Do you have the money? If not forget it you are not going to get anything. You are done, finished and hallucinations are the only thing you can own. BTW , In this down cycle national prices just buckled 5%-8% and that too in 2.5 years of terrible times. Why? Because as long as people have jobs they can pay their mortgages and they can keep their houses. I ask the same question. Why should they sell for less? I for one am holding on to every thing, and I will not sell for lower prices unless someone puts a gun to my temple. When the market picks up and buyers are running around my properties I will command my price. I can wait it out longer than they can. I have a house and a roof on my head they don't. They are like wild coyotes living in one bedroom dens and washing clothes with jailbirds and losers at the laundromat and eking out a horrible existence under someone's roof.
You can impress yourself if you can muster 10% down and 700 Fico scores and document your income. No self employed stated income loans. You are done and finished and credit is very tight. These days lenders hit you with 5% declining values on your purchases and your appraisals are cut by 5% and if you can't fork that cash no deal. End of story. Keep washing your clothes at the laundromat, you will be in great company....you will meet other losers...and real estate speculators.
I've owned lots of houses. Many of them free of debt. Stocks of companies that are still "good companies" are the equivalent of houses that are in areas that "have not fallen into disrepute." Housing prices tend to fall and rise more slowly than stocks because, as suggested, there are barriers to trading them (agents fees, physical difficulties) and because the information is poor (vs charting stocks). But make no mistake: its called a housing market because it is a market. And markets are subject to the same forces of psychology and economics whether they be markets in good houses or good stocks. If you live in the USA don't forget that, as your dollar declined over the last few years against every currency that wasn't deliberately pinned to the USD or bankrupt then, your house lost value. If it was worth 1 Million Euro in early 2002 I'm afraid its only worth 580,000 euro now so its depreciated 42% already. If you doubt that compare it with other obvious indicators of value like a barrel of oil or a kilogram of gold. This isn't negativity, just reality. In fact I'm quite positive about it all. I'm just hoping that your presidential cycle holds out and George pumps enough money into your economy to keep us in volatile market top territory until after the elections. Then we can really go short You are traders rather than investors, right?
Real estate is always a hedge against inflation and currencies because its value appreciates and does not remains static, or goes down. Your assumption is wrong. Own real estate and enough of it, and you will be a wealthy man. A real estate investor by choice, an option strategist by the love of it. Lately I have been trading a lot. Yes I trade options even when I am doing real estate. Real estate is true wealth in America, and most millionaires made it in real estate. Those who say otherwise, have no wisdom on their side.
real estate prices don't appear as volatile as stocks simply because they're far less liquid. if you look at reits that invest in apartments or malls or hotels, you'll see they can be rather volatile. many people have gotten wealthy from real estate but don't forget that many have lost a fortune too. mc hammer? real estate is still good as an investment in some places. you have to find the places that offer monthly cash-flow so you don't depend on price appreciation. but i wouldnt buy a home to live in now, too expensive and headed down.
Amen. Preach on brother. Its the leverage and the steady nature that does it. Tax breaks are the icing on the cake.