00S2K01S4

I bought in 2004, sold in 2007 luckily and made some money. I can buy my old place back for less than (80K) what I paid for in 2004. My friend bought his place in 2001 and his place is still worth about 150K more than he paid based on recent comps. I'm looking to buy another house sometime in the near future.

Penforhire

hpark, you haven't been following our appreciation closely enough. 20 to 30% PER YEAR over that five years. Do the math, cut it in half and you're back to almost double where you started. I bought about eight years ago but I still watched prices closely. Just sorry I didn't buy the neighbor's house as an investment five years ago...

sahtt

If my house were going up 20-30% per year I would have been itching to cash out come 2006/2007 although that's easier said than done/orchestrated.

After today I'm back to 25% cash in my LT account and am pretty well hedged.

lOOkatme

I just went to look at some foreclosed condo's here in the most desirable city in the minneapolis area (Minnetonka).

Some really great condo's in a high end luxury condominium might let go some 2bed/2bath condo's for $140K that initially went on the market between $400-500K.


I am sitting here looking at these foreclosed properties....and thinking....damn....maybe I should drop $20-30K on a downpayment and buy one....these are about as good of a deal as your going to get here.

then again....$30K is yielding me $4,500/year just in dividends....or $375/month with the chance to appreciate and increase dividends going forward.....decisions...decisions.

too bad I could continue to stock pile in the higher dividend paying stocks and buy the condo with no money down.....oh well.

sahtt

I've thought the same thing regarding renting and getting cash flow.

But when you add in the complexity, hassle, time commitments, and overall profit a stock with a potential to double in 5 years (much less 1 or 2) and a yield of 7+% is far superior IMO. You don't have haggle BP to give you your dividend.

hpark

My math is correct assuming I'm understanding your post correctly. You're saying a hypothetical $200K house (in 2003) went to $800K (in 2006) and then back down to $400K right now over the past 5 years?
Houses appreciate maybe 5%/year.
$200K house going to $400K in 5 years is not natural and things will correct.

aklucsarits

It's easy in hindsight today to say that you would have been "itching to cash out" after watching your home appreciate in value 20-30% annually for a few years. But the opposite was true for people that were actually in that situation: They were afraid to "cash out" by selling their home because they had a completely rational fear (at that time) of being completely priced out of their local housing market as the gains continued.

Andrew

martha

Credit Suisse issued a report yesterday projecting zero growth in oil demand in China for 2009, down from their earlier forecast of 4% growth. They also projected global oil demand in 2009 would fall 300,000 b/d on a year-to-year basis, representing the sharpest drop since 1982. It should be interesting to see how close their projections are.

sahtt

Fear doesn't usually generate good investment decisions. I understand your point but if that's your story than no matter how much house went, say to 10 million dollars in 3 days, you would just sit there in fear because you wouldn't be able to get into another house if the pattern continued.

That may sound ridiculous. Somewhere in between there and a more "sensible" number is where you personally decide to "cash out". For me 5 years of that trend while the majority of the rest of the country was not appreciating that rapidly was unsustainable.

ExOdy

more bad news than you a shake a fist at but the market continues to churn higher.

scary...