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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: fatty who wrote (6291)	10/27/2002 2:43:30 AM
From: fatty	Respond to of 306849

of course, back in 2000, your $100k invested in 1989 would have been $500k and your house would have to be worth $650K to match it. was your house worth $650k back in 2000?

To: fatty who wrote (6291)	10/27/2002 9:32:54 AM
From: Moominoid	Read Replies (1) \| Respond to of 306849

You have to compare like with like and take a margin loan to invest in stocks. One advantage of housing is you can use higher gearing than stocks, but I believe your chances of getting wiped out are then higher. House prices fell 30% in London in the early 1990s and by similar amounts in the more expensive US markets. If I took a 50% margin loan and invested $100 in the SPX at 300, the $200k would turn into $600 now - paying back the $100k loan I would have $400k net minus interest costs of course which you also need to count for the house. In reality I would probably step up the margin loan over time but that is equivalent then to drawing down equity on the house. David

To: fatty who wrote (6291)	10/27/2002 3:19:47 PM
From: Michael Sphar	Respond to of 306849

Whoa! Fatty! I got lost at the first turn. I've only owned three houses in SV over the last 27 years. I made taxable gains on the first two and it still looks like I'll make another gain on this one. But I never bought a home for financial reasons. We bought this house because of the park and the school it was close to, and because my wife wanted to remain in Santa Clara. The money thing is only now a side issue and was not really part of the equation at the getgo. With the excess cash spun out of my first house, back in 79, I bought a 15 meter open class sailplane. Not a wise investment, but one heck of a fun one. People who get off on three dimensionality would understand. But the ROI is nonexistent. My view of real estate is essentially very long term in nature. I bought a piece of land in Aptos, really just to help bail out a relative who'd gotten in over their heads. I hold it for the long term. There is no income, only taxes. But someday I'll either build a house on it or sell it. I consider it a "good" investment because of what I did and what I might do with it. I own a couple of other pieces of land that I bought sort of under duress, trying to secure the views from my vacation home. These I'll never build on and probably never sell. Just pay the taxes. They'll be somebody else's problem someday. You ask, "if that was worth it?" If I may have the freedom of generalizing my answer to include all these real estate decisions, I'd answer with an emphatic "yes!" But don't ask me to show you how it works on a spreadsheet, some things really are priceless.