Posted on 05/16/2005 6:44:19 PM PDT by LouAvul
Disappointed by the stock market and by mutual funds, Washington architect Joe Wnuk wanted to redesign his retirement accounts. So he decided to move some of his money into real estate. He's looking to buy a second home.
"The increases haven't been as substantially as I would like them to be,'' he says of Wall Street.
In Washington right now, Wnuk says, housing is just too tempting as an investment.
In Washington, the median home price has risen 69 percent in the past three years. Stocks, by comparison, have risen less than 10 percent in the same time.
As CBS News Correspondent Anthony Mason reports, Americans are buying second homes in record numbers. Last year nearly a quarter of all homes sold were bought for investment purposes.
"The second home market is surging," says David LeReah, chief economist with the National Association of Realtors.
He says the boom has been fueled by baby boomers. But in some red-hot markets, he says, speculators are now driving up housing prices.
"So there certainly is some risk," says LeReah. "There are certainly some pockets where they may be more vulnerable to a price bubble bursting than other areas of the country because of the speculative element."
(Excerpt) Read more at cbsnews.com ...
The housing boom is smoke and mirrors.
I won't charge for this invaluable advice of mine. Savor the eleemosynary moment.
"the increases haven't been as substantially as I would like them to be?"
okay let's follow this guru..
either Cbs or this dope
Maybe in some cases. My daughter doubled her money in three years on a 2BR condo in Alexandria VA. Got her family into a nice home in Cincinnati OH.
Thus, it may be time to get back into stocks.
I never got out.
But, then again, I'm still holding on to my confederate money. I still think it'll be worth something someday.
LOL!
Stating the Housing Boom is smoke and mirrors doesn't mean you can't make money. It is a marketing tactic. 'The Powers that Be' are trying to stimulate a supply and demand. In the short run, money can be made. But if they can't stimulate the momentum they are trying to push....it will crash.
His English isn't as correctly as I would like it to be.
Related free advice: profitable investments often do not make rational sense. There are very few educated economists that get rich. Markets are driven by emotion, not by reason.
Riding the momentum wave requires a deft hand. Very few have it. Most get burned. This guy will probably get burned. All it will take is a pop up in interest rates, and the bubble will burst. He better get fixed interest rate mortgage. I say that as one who has made most of his money off real estate.
Buy high, sell low!
Bob Brinker has just indicated to his radio show that he thinks the sotck market is alive and ready to start treking in the months ahead.
I bought into housing in Austin after the market there had five straight years of +20 appreciation. Everyone wanted in. (You know what is coming don't you?) One more year then I noticed For Sale signs and look more carefully and found at least two on every street in my subdivision. OMG, the bottom fell out and I sold three years later when my job closed out. My sale was for half of the purchase price. Which was below the mortgage and in Austin you are Personally lible for a debt, you cannot give them the house and walk if you have other assets. So I paid off the debt. The moral is that things don't go at above average rates for long periods of time. Don't try chasing them. We have just had a stock market correction so the market may start up again. Housing may not burst like it did on me in the '80s, but it will go flat sometime when jobs run out. So watch the jobs market and be careful. Real Estate typically pays better than stocks, but when you lose in it you also lose more than stocks. (Look up the term leverage)
Buy the rumor..sell the news
That is very true (for short term)
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