Come on now- you did a very good job at answering that. <g> I have to concur with your answers. Firstly, RE is all about location. There are certainly many other factors, but location is #1.
There is only 'so much' beach front property- 'so much' accessible land near certain cities. Only 'so much' downtown space, etc. Spots like that should continue to increase in value.
We should remember that it's not the 'house' or 'building' that increases in value over time. (Buildings actually depreciate over time), It's the land it sits on that increases in value. So an expensive home on a small lot that was overpaid for can lose money over time- because the structure can depreciate more than the land appreciates.
With the continuing debasement of the dollar- I seriously doubt that LAND itself will ever deflate in the long term. Houses can, and probably will deflate in some bubble areas. But even that is likely a short term phenomena, as every time RE deflation has occurred in the past has been a great buying opportunity.
One thing we should consider in buying housing is demographics. As the baby boomers children leave the nest, and the boomers retire, the big homes they have all bought near commercial areas will flood the market. As they 'downsize' to smaller homes, apartments, RV's, etc. the market for these luxury homes may just collapse. The generation(s) that follow the boomers are much smaller in numbers.
The market for smaller 'retirement type' homes in resort areas, forests, mountains, beaches, etc. may see a big squeeze, and a general inflation. I suspect many suburban areas will falter, and many rural, lakefront or oceanfront properties will gain.
Now if the stock market continues to collapse- very few will be able to retire, so it may even things out. <g>
Caution in RE is always warranted. Like my old pal LP used to say- "There's been more money lost in real estate speculation than all other speculations combined." <ng> |
