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Thread: Real estate as the perfect investment

  1. #1
    Cyburbian
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    Real estate as the perfect investment

    WHy does land appear to be the perfect investment? Does it ever go down? How often or how rare? Does it not strike you as strange that an investment should not follow trends and gain or lose value? Instad, its a seemingly ever increasing value...for the most part. And please understand I am speaking in generalities, if you have an opinion, pease let me know.

  2. #2
    Cyburbian jmello's avatar
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    Quote Originally posted by jkbrown
    WHy does land appear to be the perfect investment? Does it ever go down?
    Far from perfect. Take a look at the late 1980s or, better yet, wait a few more months.

  3. #3
    Cyburbian
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    the early 90's were not great either.

    Still, Real Estate has proven to be an excellent investment vehicle for millions of people.

    Not making any more of it, thats for sure.

  4. #4
    Cyburbian Cardinal's avatar
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    Real estate is a good investment if you buy the right product in the right place at the right time at the right price. Land speculation has probably bankrupted as many people as it has made rich. For the typical Amerikan, though, home ownership represents the largest investment in their portfolio, and it has generally performed well.
    Anyone want to adopt a dog?

  5. #5
    Cyburbian H's avatar
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    My family has long been in the real estate industries. In the 70s my father was flipping land in the Altanta area (Douglasville) and he got stuck with the 'hot potatoe' of many many acres. So yes, it goes down...

    Though he ended up building on it, selling the houses and doing fine, and today the houses are worth much more than he sold them for.

    I have flipped a few houses and was stuck renting one out for a while until the market caught up... Though it didnt really go down, it just 'stopped going up as fast', but eventually got there.
    "Those who plan do better than those who do not plan, even though they rarely stick to their plan." - Winston Churchill

  6. #6
    Cyburbian Random Traffic Guy's avatar
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    Quote Originally posted by gkmo62u
    Not making any more of it, thats for sure.
    Well, until humanity can get off this tiny island in space.

  7. #7
    Quote Originally posted by jmello
    Far from perfect. Take a look at the late 1980s or, better yet, wait a few more months.

    Wait a few months is right! My prediction is that Land values wont crash... but they'll certainly stagnate real soon. It's already started here on Long Island.


    Quote Originally posted by gkmo62u
    Not making any more of it, thats for sure.
    Sure they're not making any more of it, but we can do alot to effect it's value Especially as planners. Try allowing single family homes to become two family dwellings or do anything else that effects density.

  8. #8
    Cyburbian DetroitPlanner's avatar
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    I think its interesting how during this downward turn my small energy efficient home in the city is increasing in values while those mcmansions on the urban fringes of the Detroit/Ann Arbor Metroplex are tanking.

    Those were the same peopel who thought I was nuts for not chasing them out to the farmfields are now stuck with a huge home they can't afford to heat or can't unload.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  9. #9
    Cyburbian hilldweller's avatar
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    Quote Originally posted by jmello
    Far from perfect. Take a look at the late 1980s or, better yet, wait a few more months.
    It's already happening down here but you're right that the worst is yet to come.

  10. #10
    NIMBY asshatterer Plus Richmond Jake's avatar
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    It's not the forecast in my community. I could be sitting on a gold mine.

    http://www.wjhg.com/home/headlines/2831386.html
    RJ is the KING of . The One

  11. #11
    Cyburbian Brocktoon's avatar
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    Land does require maintence and upkeep and there are risks in investing in real estate. If you you live in your investment then you are getting a dual use, housing and investment so even if price remain flat or decline you are still using an investment as a place of living. You can always wait until the market turns round or if that does not happen you can view the loss as money you paid in rent (economists say you always pay rent whether its to a landlord or to yourself.)

    The risks are small, rezoning, major employer leaving, environmental concerns are always present but by in large investing in real estate is a safe investment.

    I have read some reports that on AVERAGE homes appreciate 5% which is less than stocks and around what bonds return.IF you buy a well diversified mutual fund you won't have to replace the funds hot water heater or make sure the fund does not look blighted
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

  12. #12
    Cyburbian hilldweller's avatar
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    Florida's Treasure Coast: Ground Zero of the Housing Crash

    Here are a couple excellent articles from the Palm Beach Post about the housing market in my neck of the woods:

    http://www.palmbeachpost.com/localne...ORS__0521.html

    http://www.palmbeachpost.com/busines...SING_0212.html

    Of course, try telling this to the northern baby boomer who thinks Florida real estate is still a gold mine

  13. #13

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    I don't have a crystal ball, but I think that a lot of people are going to be losing a lot of money in real estate over the next couple years, at a minimum. Especially in high price areas and areas where there has been rapid (even unprecedented) appreciation in recent years. Many people got in over their heads and many others got into the real estate investment business when the market was cresting (such as the guy in the article from South Florida). Most new homebuyers in expensive markets are using some novel mortgage "product" (interest only and the like) and they are going to want to see in a couple years and realize that they have negative equity...Somewhat interesting article in current issue of Harpers on the topic...Here in Northern Virginia, I have been looking at homes (mainly multifamily homes) in western Fairfax, mainly Reston area, and prices there have plummetted, down 20% or more over the last 6 months. Townhomes that were going for $500K+ are now sitting on the market in the low $400s, with no interest. I'm glad to see that open houses in my close-in Arlington neighborhood are still quite busy...At last, maybe high energy costs are having an impact. Had to be payback eventually...As far as longterm investment value of real estate, a lot of that is going to depend on energy costs, and predictions there are all over the map, making investment even trickier than usual.

  14. #14
    Member
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    Quote Originally posted by DetroitPlanner
    I think its interesting how during this downward turn my small energy efficient home in the city is increasing in values while those mcmansions on the urban fringes of the Detroit/Ann Arbor Metroplex are tanking.

    Those were the same peopel who thought I was nuts for not chasing them out to the farmfields are now stuck with a huge home they can't afford to heat or can't unload.
    Interesting...that may be a nationwide trend. I was just looking into the Los Angeles real estate market and the trend is similar. Purchasing a condo/loft in downtown LA is hard to do atm because theyre selling like hot cakes (keep in mind they've been constructing them like mad the past 5 years). Prices are stable too. On the other hand people are having a hard/slower time selling homes in Orange County. Of course, construction continues in the far-flung exurbs, but that appears to be slowing as well.

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