I have not check their # but I think they were referring to housing, i.e., home owners, physically owning houses, etc. REITs own mostly commercial and you also have a bunch of middlemen between your rent and returns. Like hedge funds charging 2/20. With fee, if the underlying appreciates 10%, a 2/20 set up will reduce the returns to less than 8%.
Then it is not apple to apple to comparisons. Owning home is not an investment, it is an asset along with lot sweat equity. Also comes with concentrated risk
In the study, “researchers looked at 16 advanced economies over thepast 145 years. Specifically, they compared returns on equities, residential real estate, short-term treasury bills, and longer-term treasury bonds.” That chart is 24 years, mostly commercial REITS, and I’m guessing it’s using just U.S. stocks as a benchmark. Completely different analysis.
Yes. I can not invest in my neighbor's residence. One has to go by the choice offered by the market. You can argue invest in rental properties. Then it is also different. It is like another job, if you manage yourself or one has to pay almost 15% management fee. Plenty of REITs manage residential properties which are included in that REIT class
I first moved to San Francisco in the late 90s. I've been waiting since then for the craziness to end. It didn't even end in 2008, just paused it's upward growth. So you may be in for a long wait, that's a unique market.
Also keep in mind, the American love affair with real estate since the 80s (and subsequent price appreciation) has all been predicated on one huge tailwind - mortgage interest rates getting cheaper and cheaper like clockwork since 1980. If that trend were to reverse, we can throw all our real estate assumptions into the trash.
Same. Also been in the Bayarea since 95 (from SoCal, California native) and have seen 2 cycles here, each time either too young or not having the capital to exploit it after the fact. The thing about the Bayarea though is that it's a mono-economy that is not robust against boom and bust cycles. If the economy takes another beating and plenty of tech entities will be dumping people who will do what they always do: pack up and leave. Once that happens sellers will be hitting the bid when they see that buyers aren't budging. SF bay isn't immune to economic cycles by any measure. On top of that you have corporations who are staring to look outside of SF bay due to the costs of everything here, which is yet another risk. Plus an 8.0 could seriously wipe the smug look off everyone's faces right quick.
Except house prices in SF (not Concord or Antioch) didn't go down after the dot com bust, didn't go down in 2008. Not sure with Loma Prieta, before my time. No dips, just plateaus, and the .com bust was pretty epic for the tech industry at the time. I made multiple offers on condos and townhomes on the Peninsula in the year after the .com bust and was not only outbid but they ended up selling over asking...crazy. Ended up buying my first home in Hawaii, which ironically was significantly cheaper!
It’s as robust as any economy in the world, I don’t see it as a just tech but it’s definitely a significant chunk. Everything is related to tech now anyways, in the dot.com that wasn’t true.