I think that there is some truth in that article, but that the outlook isn’t as bleak as what happened with the stock market. The problem I have with stocks is that there are too many variables that can affect value (bad management, competition, regulation). During the dot com boom/bust, too many people were basing value solely on word of mouth.

An friend of mine that has been around a long time (he’s in his 60’s) said that he has heard this kind of pessimism about real estate in his lifetime that he’s just tired of hearing it. He always uses the reasoning that obviously we can’t produce more land, so the demand will always be higher than supply. At some point values will have to stop going up so much. Some forms of real estate investing are not good for the long term, but others are.

Companies come and go. Real estate will always be needed and will always be in style. Alot of the pessimists are people who have been burned in the past by investments or just don’t have the resources to invest for themselves. I know alot of people who are pessimistic about the housing market…they help offset the optimists like you and me. If everyone thought it was a good thing, then there may be a problem.

Posted from United States

Good points Brian - I agree with your thoughts long term - the get rich quick schemes on RE are generally not around long or bullshit. Just some smart investing over the long term should work well.

Posted from United States

Hello Everyone!

I have sold almost 200 properties in the last 5 years. Over 500 transaction sides (buy/sell)over my lifetime. My average hold is 20 months and gross profit is 1000%Plus. I have experienced recessions in the 70s, 80s, 90s. A correction is over due for the 00s. I think, in about 12 to 24 months this “fragile” real estate market will experience a correction. Probalby from: terror act, disease break out, leader death, petro cost-skyrocket, capital cost-skyrocket, war, natural disaster, buyer burn out. Any thing can “derail” the real estate market.

JP Getty said: Always move your capital to the asset that is least desired. I bought like crazy when the market was near the bottom. In the USA, cash is the “LEAST DESIRED”… so that is where I’m moving my assets. Debt is most desired, so I’m reducing all debt to “zero”.

John: BBA(Finance & Real Estate) traveler of 55+countries.

Posted from United States

John, isn’t debt at zero desirable at all times????

Posted from United States

Here is my short view. Here in Northern California everyone that I know agrees that there is a current real estate bubble, but at the same time, everyone is earning phenomenal equity in their real estate investments. Areas are still growing like crazy and as we speak, my partners and I are investing in several areas with 80/20 loans, credit scores in the 600’s and still seeing $300,000 properties turn into $500,00 within just 2 years. Numerous times.

So at first I was distracted with the bubble, but it all depends on your real estate gameplan. If your plan is to flip properties or roll them over with 1031 exchanges, then you can do very well in a bubble market. If your plan is to earn “passive” income through rental properties then it can be very difficult to see a decent profit.

It is very difficult, (almost impossible), to collect enough rent to cover mortgage payments in the equity growth areas. So we have found Texas to be a better source for rental investing for now.

In summary, at first I was distracted by the bubble, then I just shifted my real estate gameplan to adjust for the possibilities. Ride out the equity growth in Northern California and secure the long term investments through rental income in Texas, while also keeping a vision for things like the “city building” going on in the outer-phoenix real estate markets.

But that’s just how I see things at this point.

Posted from United States