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Originally Posted by David - PG
I found this pretty interesting, reminded me of the heated discussion when Lars brought up the topic around 6-9 months ago. I recall there was a camp here claiming that real estate was the best investment in the world even after prices have gone up 200% since 2001 in some areas, while others were more cautious. I never understood property, I'm not a tax, finance & credit expert. I know there are many who made a fortune in real estate, but I can't say I'm sorry I missed the train:
Check out what www.thestreet.com writes about St. Joe's, a billion dollar NYSE listed property development company (full story here).
With people borrowing money against their properties and interest rates set to rise this looks like trouble for some areas. Not only for the poor souls who will lose their homes but for all many of us doing business since people that move back to a 1BR rentals while paying off debt for the next 10 years are likely to have less money to waste on the fun things in life (like online porn). |
The market is booming in some areas and starting to die in others. I am building houses in an area that has gone up about 30% in the last year. At the same time I own a condo on the AL gulf coast and market there is down about 15% in the last year. Even though it is dropping it is still worth Double what is was worth when i bought 4 years ago. So i am not complaining. However some people in the building who bought right before the decline are losing their ass.
The realestate "market" is not busting, some areas are hot, some areas are not. Evening in a declining market there are still opertunities, there are always opertunities, just have to find them.