Might put me in RSF….or not… Oh wait, heavens forbid if I were to win the house, I’d still need to pay taxes on it… never mind…
Oh well.. Ok, need to go work smarter/harder now….
(end vent).[/quote]
Ha, ha. Funny. I bought a few of those tickets. I figured it was a good cause no matter what. If I won, I’d definitely take the cash. Although that house looks really beautiful. (Did you get in on the early bird round flu? I did! 😛 )
Flu, I wouldn’t get too discouraged. Things move in cycles. Nothing moves in a straight line. There are lots and lots of problems still out there.
Lots of this cash seems to also be people that did very well the past few years in the stock market. Several of my clients have cashed out a big chunk of it before December 31. Just cash sitting around not earning much interest. So several of them have picked up investment properties in desirable areas.
Like you mentioned, I don’t see too much downside risk if you have tons of cash on the sidelines sinking it in a LONG-TERM real estate holding where you plan to hold it for the foreseeable future. Even if prices fall again in the next few years, it’s not like you can’t rent it out and earn cash flow.
I’d much rather own a free and clear home in a desirable area of NCC (or a few miles inland) vs. a stock portfolio. Stocks can and do sometimes go to $0. (I know from experience buying Washington Mutual 2 days before they went under…. I tried to catch a falling knife and got my hands VERY bloody). Desirable real estate will never go to $0.
I don’t know the real estate market here in Coastal California like some of you pros, but I’m comfortable in saying you buy real estate in a desirable area of San Diego in an excellent school district and over the long-haul you will do fine even at today’s prices. We WILL see peak prices again here in San Diego.
I thought it might take up to 15 years to see it but now I’m not sure it will take too long. I would have MUCH preferred to see prices go up steadily and take longer. I don’t think what we’re seeing is healthy. Granted, I much prefer it to the last go around with no-doc loans and anyone with a heart beat getting a mortgage.
But I don’t see too much risk for people buying with cash in great areas in great school districts IF they plan to hold for the long term. I own a fairly good sized real estate portfolio and own several properties in several different countries.
They are all non-leveraged and paid off. I don’t really care too much what is going on with real estate prices (Ok..maybe I do a bit… LOL) but I don’t plan to sell them. And they easily rent out and have cash flow each month.
Even if the real estate sales prices fall which they do during some point in the “cycle”, I don’t stress about it. Buying in desirable neighborhoods with good school districts typically will always be easier to rent. I don’t care how bad the economy is. One thing I’ve learned is you will always have wealthy people looking for a roof over their heads.
Yeah it’s conservative saving up and paying cash for a property but over the long haul I don’t see too much risk if it’s truly for the long-term. Obviously you need to see what the rental yields are before buying.
Right now I’ll just wait from the sidelines as things are moving much faster than I thought it would. I don’t think anyone predicted prices and inventory to do what they are doing so quickly.
