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ABV · 11-17-2005

Anyone remember back in '99? Everyone was buying tech stocks at ridiculous prices because "It's guarenteed to go up". Then remember when the bottom fell out? Granted the real estate market is much more stable than the stock market, and I don't think the bottom is going to fall out. But when people in California are paying up to $1.0m for the rights to lease a lot in a trailer park (MSN Money article from a few months back, I'll try to find the link), you know things are getting out of hand.

The bottom line is that the housing market has had down turns in the past, and it will see down turns in the future. Just because real estate has had double digit returns over the past few years, doesn't guarentee that will happen in the future. Isn't that the first rule of investing, "Past performance does not indicate future results." It's anybody's guess if the housing market will decline over the next decade, but I think we will at least see it level off and remain stagnant for a while.

And as far as the rent vs. buy debate, I don't even want to get into that. It's a matter of personal preferance. Buying isn't always the best option, depending on your situation. There are many, many variables to take into account.

11-17-2005	#7
ABV Admin Who Wants To Be A Millionaire Champion! Join Date: Oct 2003 Location: Minneapolis, MN Posts: 939	Re: Is the housing boom over? Anyone remember back in '99? Everyone was buying tech stocks at ridiculous prices because "It's guarenteed to go up". Then remember when the bottom fell out? Granted the real estate market is much more stable than the stock market, and I don't think the bottom is going to fall out. But when people in California are paying up to $1.0m for the rights to lease a lot in a trailer park (MSN Money article from a few months back, I'll try to find the link), you know things are getting out of hand. The bottom line is that the housing market has had down turns in the past, and it will see down turns in the future. Just because real estate has had double digit returns over the past few years, doesn't guarentee that will happen in the future. Isn't that the first rule of investing, "Past performance does not indicate future results." It's anybody's guess if the housing market will decline over the next decade, but I think we will at least see it level off and remain stagnant for a while. And as far as the rent vs. buy debate, I don't even want to get into that. It's a matter of personal preferance. Buying isn't always the best option, depending on your situation. There are many, many variables to take into account.