Sorry, missed this one. Been a bit busy with papers…
[quote]hedo wrote:
How long did LA take to recover after that period? Did it? I would assume specultors came in following that period.[/quote]
It took about 10 years to go back to a point where you could sell your home at the same price you bought it corrected for inflation.
The lesson is: if you buy a house, expect to have to live in it for at least 10 years.
[quote]hedo wrote:
What’s your prediction on housing?[/quote]
In the major markets – California, and Northeast, mainly – it’s going to flatten and possibly fall about 5% in the next couple of years. Then it’s going to go back as it was before – i.e., with returns between inflation and the stock market.
Millionaire-by-flippin’-houses days are over in those parts of the country. However, the damage to the quality of life is done and is irreversible: no family can live on a single income, people are in debt to their eyeballs and very few will have any money when they retire. I fully expect lots of bankruptcies and a lot of people living on the streets in a few decades. Some people predict an exodus to other parts of the country, but I’ve found that, as silly as it may sound, most people here would rather live on the street than move to, say, Kansas. It’s completely irrational and silly, but so is the prices people are paying for homes. People are just stupid…
There are many markets out there that are still under-valued. Mainly Rockies (Colorado, Nevada, Arizona) and the Midwest. Lots of money to be made there.
Personally, I prefer to invest in the stock market. But I’ll admit it’s mostly for moral reasons. I don’t like speculating with something as fundamentally necessary as real estate. I know I could have made millions with the real estate market over here in the Bay Area, and I could make a lot more in some still-hot markets, but I decided not to so I can live with myself.