Can't believe prices have doubled in 2-3 years
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2014 Jan 29, 11:33pm 40,374 views 98 comments
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hanera
2014 Feb 13, 2:49am
Jemaho,
With the fiat money system, many governments tends to print money. Hence, long term, money is fast depreciating and is preferably to hold real asset such as real estate. It is not gambling, merely hedging against inflation (depreciation of money). If you can't afford real estate, the best vehicle is dollar-cost averaging purchase of a near no-load index fund such as one based on S&P 500. Not to rain on Malkovich, the average annual return of such an index fund over the last three years is 15%-20% depending on when you start investing.
You may wish to read up on what is meant by dollar cost averaging, no load and pros/cons of an index fund (ask you agent or simply do a web search).
With the fiat money system, many governments tends to print money. Hence, long term, money is fast depreciating and is preferably to hold real asset such as real estate.
A few questions flow from that:
Are real estate markets really not subject to the whims of governments? If government money-printing, as you call it, causes economic downfall, how do you know that real estate in that country will be insulated from that chaos?
Similarly, since your alternative is an S&P 500 fund, what makes you think that an economic downfall wouldn't affect your stock withholdings?
hanera
2014 Feb 14, 4:44pm
With the fiat money system, many governments tends to print money. Hence, long term, money is fast depreciating and is preferably to hold real asset such as real estate.
A few questions flow from that:
Are real estate markets really not subject to the whims of governments? If government money-printing, as you call it, causes economic downfall, how do you know that real estate in that country will be insulated from that chaos?
Similarly, since your alternative is an S&P 500 fund, what makes you think that an economic downfall wouldn't affect your stock withholdings?
I'm referring to long term and not talking about economic downfall, in fact, talking about going through many economic cycles (booms and downfalls).
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I've been looking in nicer parts of Oakland for a du/tri/4/plex for 3 years now. There has been very little inventory the entire time.
Due to alerts from Redfin and other services I've keep a very close watch on multis for sale in the last few years.
I remember seeing this listing http://www.redfin.com/CA/Oakland/486-41st-St-94609/home/528112 languish on the market forever at $399K.
I had no interest in this property because I am looking to owner occupy and am seeking a different type of building. I also need a garage for all the junk I've acquired over the years.
That said, I could have bought this building and within two years almost doubled my money. I can't believe the extreme lows and highs of this RE cycle - well, let me take that back, the lows did not even go that low (aside from in the ghetto or out in the boondocks - nice neighborhoods in Oakland or especially SF hardly even dipped).
WTF is going on here? Chinese money? Are all the stories about the rich creating these asset bubbles to destroy the middle class true?
I am absolutely fucking shocked at what I see happening. Even dumps in EAST Oakland are now selling for top dollar and 2006 prices (I can't comment on what is going on in the peninsula area - I'm sure there is a good chance it is related to newly rich techies). Who is buying this crap?
I have been saving for years now and am sitting on hundreds of thousands of dollars but with this price run up I can't even find a suitable property for less than $1M (and then we are talking a 100yo building that needs a new foundation).
My accountant says to wait for the next downturn (LOL - he lives in a rent controlled apartment in tony Nob Hill - easy for him to say). But it seems the next downturn probably won't even be that much, maybe even just stagnation.
Forgive the rant, but (even in my amateur knowledge of the economy and RE) I just never would have thought things would have turned out this way.