Here we go again. Real Estate has shed some value and I am hearing the same thing from the same people I heard from in 1993-5, 2001-2 and of course 2007- whenever. "When the prices get a bit lower I am going to step forward and purchase a piece of property." Those who were telling me this in the early 1990s for the most part moved to Texas from Southern California in the late 1990s. The ones who were waiting for a better deal at the turn of the century are still on their knees praying for real estate in Southern California to keep coming down. oes anybody know anyone that bought real estate at the absolute bottom of any correction? Before you try to hunt someone up, realize that there isn't anyway to tell because each piece of real estate is generally different from every other piece. Even in a tract of homes the location has an effect on the price, the lot size has an effect, the direction it is facing can have an effect, etc. Perhaps it is time to look in the mirror and find out if the one who is staring back is ever going to take advantage of any real estate correction.
Why am I so concerned about anyone buying real estate? First of all owning your own house is the American Dream. Second, I believe it is the easiest way to create an estate of size for the average American. Is it the only way to build your assets? Absolutely not. I would trade a house for an oil field, gold mine, large plot of corn, a coal mine, etc. I just don't think that is going to happen to me, so I'll stick with real estate. The government is currently begging people to become rich, because if you buy and sell a house you have lived in for two years, they will let you take out $250,000 in profit tax free or, if it is you and your spouse, the government will double the gift: $500,000 tax free. You aren't going to find that largess in too many other places.
I realize human nature takes over in times of daring. When the stock market is low you can't find a great number of people who wish to invest, but when it heats up and is on the move, watch out for the crowd. Real estate is the same way. The papers continue to put up huge headlines about the drop in value, but today I noticed a small story about how Southern California real estate has picked up as more and more people are buying the low priced real estate. The investors are stepping up, why not you? The opportunities abound.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.