I have often thought that the reason real estate does well for most folks is that they can't day trade it. Because of the cone of uncertainty, emotions, and the greater likelihood of making money in a rising market given enough holding time (buy and hold) most of the real estate folks likely make money in spite of themselves. People usually do more research in a house, that will be there tomorrow (barring accidents) that the stock of the month club, which may turn out to be gone tomorrow.
Edit..... I would be wiped out on a 25% correction in the futures. So If I wanted to be safer I would only use 2x leverage and make an average of 40k a year. assuming 8% annually. Then it would take a 50% move against me to kill me. Which , those do happen once in a great while! Moral of the story, I think one can more safely leverage their money in real estate with the premise that you have renters paying for your mortgage. If rents had come down in price then that could be a major issue though. No risk no reward!
25% correction, bubble ben bernanke wont let that happen, they will close the markets down before that occurs, so dont worry, 25% corrections come once like every 18 years, no need to worry now, the next isn't coming for quite sometime!
When purchased at a low/reasonable price, real estate in the right location is the slower, but surer, steadier path to building wealth for most people. The securities/derivatives markets are much, much more difficult for the average person.
Both. 25 years is a long time. First, do nothing. When the bargains present themselves, buy. I believe Sir John Templeton went by Rothschild's adage that "the best time to buy is when there is blood in the streets." Greece should present the next opportunity.
Do you imply the opportunity will be buying greece assets or cause a global opportunity such as another large downturn in the US stock market?
Residential real estate will continue to decline for some time. The average American is feeling the pinch that our Grandparents likely felt during the Great Depression. Only worse, as today the average American met something called leverage, and unlike our Grandparents, embraced it... They're mostly cash-strapped, and credit is tighter than I've ever seen it. The average American doesn't have the cash to put down, and banks are scared to lend. For those with cash in hand, there are already bargains out there for those willing to hold. If one is looking for a bottom, who knows when that will be. Imo, we are in a Depression, and it looks to continue for some time. (Sure, the markets have trended up since spring of 09. The markets trended up in the early 30's too despite the Depression. Imo we're repeating history, but only worse this time...) For now, if I had cash reserves or investment money set aside to purchase another residence, and found a great deal, I'd think strongly about buying despite the contunied price downtrend. The property in FL I mentioned above that was 600k went for close to 150k, and was about 1/4 mile from the beach. (Gulf side) I was shocked by how nice the place was, AND what banks are taking for them to clear their books.:eek:
One should not forget however that much or all of the depreciation you took may be recaptured by Uncle Sam if you sell the property, depending on how long you have held it.