I watched the piece and couldn’t help feeling like they were purposefully marginalizing him.

In any case, I think they picked a very intelligent person who wasn’t great at articulating the position of the housing bears.

They should have profiled Rich.

I agree that any housing coverage that isn’t perma-bull is worthwhile. I guess I am just getting frustrated with a system that props up experts from the NAR and discounts people like Patrick. While Patrick doesn’t sound too terribly eloquent, he hit it on the head when he said that most positive housing news is coming from people trying to sell you something.The rest comes from people who’s clients want to sell you something!

He also stood in stark contrast to the young couple that said something along the lines of, “We don’t think that you can judge the top of bottom of a market, but we think it’s a good time to buy.” That’s what I call doing your due diligence!

One thing that drives me a little bit nuts is when people like Patrick point out the 1.36% (or thereabouts) annual increase in real estate prices and come to the conclusion that, ergo, purchasing a house is a generally a bad investment (or, even worse, it’s corollary that it’s better to be in the stock market). This conclusion ignores two important facts: (1) You can borrow money to buy the house, therefore the return on real estate should reflect the ability to use leverage (that is, the return on your equity), and (2) if you get a fixed-rate loan, your “rent” will never increase and you hold an explicit option to put the mortgage back to the financial institution and re-finance at a lower rate if one should become available. Anyone who ignores these two issues simply cannot be taken seriously, in my opinion.

I would argue that at least 50% of the time (assuming normal swings in the real estate market) a person will be financially better off in the long term by purchasing as opposed to renting (assuming that they can comfortably afford the mortgage, of course). Although clearly we’re not in one of those 50% chunks of time right now in SD.

Agreed. Borrowed money in housing changes the game entirely. I could get a lot more skin in the housing game than I do in the stock market if I wanted to. Good point.

I tried to post something along the lines of Davel’s contribution this morning but all these SoCal clouds were giving the satellite signal fits. I don’t think Patrick had much of an opportunity in the Video. Not a good format or interview for such a comlex topic.

I wish he had stuck to the housing bubble and not a theory that says RE is a poor asset class. He wants to buy at a certain point of time, namely after real prices drop 50%. He should leave out that the almost religious view that RE is a poor investment vehicle or that you want to buy it,one or the other. He is already saying he is not going to put his money where his mouth is.

On the other hand, I have never found anything here, by Rich,that systematically dogs RE ownership or even compares it down dramatically against other assets on a historical basis. Even if it didn’t measure up,long term,which I think is very difficult to surmise, it certainly has worked for many people and I am not talking about one bubble. Maybe I missed something in the primer or other posts?