Real Estate is Not Like the Stock Market

In every city across America right now there are people investing in real estate. In markets where the so called bubble has burst (dumb cliche) there are people buying up the land, bidding at the sheriff’s auctions, and making offers on run down homes. These are investors who understand real state. Real estate is always a safe investment if you own for more than a decade. Always.

The real estate market goes up and sometimes creeps down, but it is not like the stock market. It doesn’t have the huge upswings and downswings that the stock market has. And real estate investors aren’t nearly as sensitive about things. A stock investor sees the CEO of a company wearing the wrong color tie and they freak out and it’s SELL! SELL! SELL! A real estate investor looks at the cycle the market is in and buys, sells, or holds accordingly, but it’s not a right now or you lose everything proposition.

And real estate never goes out of business. No matter how bad things get with a local market the land is always worth something. After Katrina hit New Orleans the whole place was devastated, but now, even with everything destroyed, people are snatching up as much land as they can get their hands on because they understand that in ten years that land is going to be worth a lot of money. More money than ever before.

There is no place in America where the land is not worth more today than it was ten years ago. Nowhere. When California crashed in the early 90’s a ton of people bought up property and waited. By 2000 that property had doubled in value and by 2005 it had doubled twice more. And now that the market is cooling it will still never be less valuable than it was in 2000.

And when the real estate market does come down it comes down much slower than the stock market so people have plenty of time to sell if that’s what they are going to do. If interest goes up it won’t go from 6.5% to 13%- it will be much more gradual ad there are many indicators that can tell when a local real estate market is heading up fast or slowing down. Job growth, interest rates, the commercial market, availability of land, and other factors all gives us an idea of where the market is going.

The “Bubble” is the stock broker’s way of projecting their bad hype on to real estate. And it makes for good reading so of course the media loves it.

In markets like Utah is going through right now people are buying run down homes to fix up and flip for profit. And they’re making a ton of mone. My sister-in-law just bought a new build home here for $1Million and sold it when it was completed for $2Million. Not a bad way to make some money, figuring they didn’t have to do any of the work.

And with our job growth we’re looking pretty good for a while. And even if interest rates go through the roof and a tornado rips the city apart people will still be making a lot of money investing in the local real estate market.

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2 thoughts on “Real Estate is Not Like the Stock Market

  1. In the last few years or so, with more investment avenues opening up and giving better
    returns, investment in Indian real estate had taken a back seat. The pivotal factor responsible
    for this situation is the price appreciation in real estate and markets opening up with more sustainable demand………

    i found very useful informations about indian stock market and investments at http://www.theindiastreet.com/

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