In this article http://patrick.net/housing/crash1.html Patrick suggests that the way to win at real estate is by waiting until prices are low and interest rates are high and then buying with cash (part of item 3). This strategy makes sense to me, but I had a question about how you would actually go about doing it. Presumably you would have your money invested in the market, and when housing prices bottom out, you would sell your investments and buy a house. But when the real estate market is bottomed out, won't the stock market be down significantly as well? (at least this was the case in the most recent crash) In this case, you're losing a ton of money by selling your investments when they're down and negating the lower real estate prices. Or should you try to time the market and sell your investments before they go down? (this seems doomed to failure) Or should you keep your house fund invested in something that can't crash like a CD or money market account? In this case you're losing a lot of potential returns.
Does anyone have any thoughts? Am I just thinking about it the wrong way?
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In this article http://patrick.net/housing/crash1.html Patrick suggests that the way to win at real estate is by waiting until prices are low and interest rates are high and then buying with cash (part of item 3). This strategy makes sense to me, but I had a question about how you would actually go about doing it. Presumably you would have your money invested in the market, and when housing prices bottom out, you would sell your investments and buy a house. But when the real estate market is bottomed out, won't the stock market be down significantly as well? (at least this was the case in the most recent crash) In this case, you're losing a ton of money by selling your investments when they're down and negating the lower real estate prices. Or should you try to time the market and sell your investments before they go down? (this seems doomed to failure) Or should you keep your house fund invested in something that can't crash like a CD or money market account? In this case you're losing a lot of potential returns.
Does anyone have any thoughts? Am I just thinking about it the wrong way?
#housing