Put a chart with the housing prices next to a chart with the S&P. Even a blind can see the difference. Housing never crashes as the S&P did in 2000 and aerlier. Stocks are no primary needs, housing is. You dump stocks if you loose money. If you dump your house you have no place to live. Therefore we will never see the same corrections in housing as in stocks.
housing is actually a much better long term investment that actively trading the markets. while housing may return 8% per annum with minimal risk, trading can yield much more at expense of increased risk. the trade off clearly favors housing. i wonder how trump got his fortune???
TADA!!! Someone figured it out. Homes are a huge pain in the ass for some people. I no longer enjoy owning a home.
Thats very misleading, since people typically dont own their homes and are effectively using massive leverage. If im a typical californian and buy a 1 million dollar home with 50K down, and it goes down 20%, ive lost 150K If I put 50K in the market, I have to lose 300% to match the home loss. Not possible.
Perhaps. But when is the last time you heard of a mortgage company making a margin call? It's not possible to be forced to sell your home because of the housing market. A forced sale would have to be due to some other condition. And until you sell, the housing market doesn't affect you one bit. There aren't too many leveraged markets available that offer such little risk. -Raystonn
Goodness. So many big ideas. I think we're getting a bit off topic. Owning a home and owning a business provide real and significant satisfaction to many of us in America. From my personal experience (I assure you) I DO have a business and I see results all the time. The more you watch our work, the more money I make and the happier everyone becomes. I think that's a fair deal. Re: attaining a "natual" look. Yes you have a good point. Look at poor Meg Ryan. She looks so "unnatural" as you'd say. That just demonstrates how important it is to find a good surgeon. Make sure you shop around. ... It's all just "Bread and Circuses" ssss. Some people want more bread. Others want more circuses. To each his own. Chacun a son gout. In my experience, you should definitely party with homeowners. Our drugs are better.
The fact that there plenty of people making stupid decisions everyday in the housing market does not at all detract from the tremendous long term financial advantages of owning a home that has been well bought, well financed and well maintained. Anyone who is stupid enough to put 5% down on an overpriced million dollar home in a buyers market deserves to take a loss. But patience can overcome nearly any bad purchase in real estate. Not true of the stock market.
Completely wrong. For the housing you use leverage, so you should do the same for trading. If i pay my house cash and we go down 20% , i lost only 20% of my capital. If i buy stocks for my 50K with maximum leverage i will lose much more. With manipulated examples you can prove anything. All you have to do is take a heavy overoptimistic scenario for 1 thing and a heavy overpesimistic scenario for the other thing. And automatically you will see how clear your point of view is. Can you show me where the real estate market went down 20%? in the last three decades? I can show you where the stockmarket went down almost 50% and several points where stocks went down over 20%. I know several people that got ruined in trading, i don't know anyone who went broke by buying a house.
No, youre completely wrong. Lots of areas in san diego are down 20% from the peak. Some bag holders have already eaten 20% and more. My point is, comparing a 50% non-leveraged dip in the stock market to the highly leveraged home market is not even close to realistic. You have to muliply the dip by the leverage used to buy the home, which is typically 10X in san diego these days. So a 20% dip in san diego prices, which has happened plenty of times, is easily a bigger hit than a 50% in the stock market for many people. You simply cant compare the charts, because the housing chart doesnt show the leverage involved. Thats my point.