San Diego real estate advice needed
Question: Many people who seriously study the stock market believe that it is impossible to predict with any certainty what the market is going to do in the future. The same thing is probably true of real estate. In 2000 a lot of gurus were saying that stock prices would keep going up. Some wrote books saying that real estate is dead and stocks are the coming thing. Those books do not sell too many copies nowadays. Yes, what you say about TV complaints is true. Another strategy is to look at the shelves of your local bookstore, and if there are a lot of books on “How to get rich in real estate” that is probably a good time to buy stocks. And if most of the books are about “The road to riches in stocks,” then that is time to invest in real estate.
Answer: Many people who seriously study the stock market believe that it is impossible to predict with any certainty what the market is going to do in the future. The same thing is probably true of real estate. In 2000 a lot of gurus were saying that stock prices would keep going up. Some wrote books saying that real estate is dead and stocks are the coming thing. Those books do not sell too many copies nowadays. Yes, what you say about TV complaints is true. Another strategy is to look at the shelves of your local bookstore, and if there are a lot of books on “How to get rich in real estate” that is probably a good time to buy stocks. And if most of the books are about “The road to riches in stocks,” then that is time to invest in real estate. You cannot predict the day to day movements, but mega-trends can be seen in advance. For example, in 2000, the P/E of the market was in the 40’s, whereas the traditional average was down around 15 or so. In that case, you knew something was going to blow sooner or later. You didn’t know when, or how bad, but you knew something had to give at that point. The P/E of the market is still in the 20’s, and some folks feel that we still have not seen the bottom yet since we are still 50% over the long term average. The same is true for real estate. When the prices on properties get so high that only a few poeple could ever afford them, the market will bring the prices back down to the long term average. It is not a question of if, rather, it is when and how deep the plunge will go.
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