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Hedging against rapid market corrections (upward) in housing
2010 Nov 22, 1:40pm 5,120 views 16 comments
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Cvoc13
@
2010 Nov 28, 10:51am
I think the costs of building them will come way way down, as labor costs come down with wages under-pressure, and land costs and all related costs that you are basing COST on now will all come down. Why do others pre existing homes have to come up? Why not as I am suggesting costs coming down.
Interest rates must be higher by 2012 but I hope to pay cash (125k or so) or maybe buy a bigger home and finance only 25-50% of the house. Essentially I'm looking for a 3/2 plus den in the 2000-2400 sqft range. From what I have seen properties in the mid to high 100s range seem to languish on the mls, despite being priced well below peak values.
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Hello
I am planning to buy a house in Phoenix in summer 2012 when I return to the city. I fear the local market is way undervalued with houses selling for below building cost and that these deals may be gone come summer 2012. I was curious if there was a way to invest in specific city Case-Shiller indexes (in this case Phoenix) as a hedge against a rapid turnaround. The thought is that if the market declines the value of that index declines and my investment values declines in like fashion. To the contrary, if the market rebounds 20% by 2012 I am protected somewhat from this.
Given how local real estate markets are I doubt an general inflation tracking index would work. I also need to maintain liquidity since theoretically I'd be pulling all of this money out to buy the house. Stocks and commodities are just too volatile and risky, money markets/CDs too worthless, yet I fear inflation will eat away at the money just sitting in an account.
Thanks in advance.
#housing