Real Estate is dying? Investment-wise what is the next Asset Class Du Jour?

Quote from onewaypockets:

Actually, I live in Ventura County. But San Diego, Ventura, Los Angeles, and Orange counties have tracked perfectly in sync during the last few real estate cycles going back over 30 years...

My "research" consists of only armchair observations, much reading, and my background of some real estate development and buying and selling properties starting when I was 26 years old. I have seen and participated in the good, the bad, and the very ugly in the market.

The San Diego area has two interesting web sites that cover it well and mesh with my own opinions. One is http://piggington.com/ and the second is http://www.realestatetiming.com/bibliography/
Many of the charts and graphs come from these sites, not original work of my own.

If your friend is a real estate agent, his comments negating any increases in inventory may be suspect. FWIW
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Thanks oneway...my friends comments were that in june there were only a few apts on the marktet today..there are over 300...my own "arm chair" analysis was that maybe the data in san diego is skewed because of this. I appreciate you taking the time to respond...i will do some more research on this myself.

In your experience in realestate how bad can ugly get...do you see corrections of 50% or more like 15 - 20 % pullbacks?

Mike
 
if you can shelter dollars elsewhere, because the inflation we're going to see over the next few years will take a big bite outta your lunch.

Either buy the new gold ETF or foreign stocks & bonds. If you buy international funds, be sure they don't hedge the currency risk.
 
Mike,

Take a look at the bottom of one of my post on page 30 in this thread for an example of the swings in price over time for SoCal. My place was in the Long Beach area.
 
i appraised an apt project in long beach last month and i inspected 2 more yesterday. long beach is on fire. BTW, i have at least 2 more inspections next week.this is as busy as its ever been, and there are a lot of new appraisers in the biz. buyers are becoming more price-sensitive, but there is still a ton of 1031-exchange money floating around. personally, i sold 2 properties at the beginning of summer. California/Seattle exchange $$$$'s were chasing projects in other states. i ended up pulling some cash off of the table and ill have a fat cap gains tax bill in April. i did buy a small property in another state, but i couldnt pay up and i didnt want to leverage up, so i received a nice big check, which i will split with my dead-beat partner, Unlce Sam. im like "cache", ill be buying when people hate real estate. nothing pays like patience in real estate!

on the residential side, it seemed that there were a flood of houses coming on line in late summer im my 'hood. i noticed "open house" signs during the week. ive noticed some price reduction signs, but the most telling sign is that sellers are trying to rent the homes at the same time as listed for sale. this is indicative of sellers' ignorance that prices/values have dropped! these guys are the "hopers" that will eventually track the market down and capitualte at the bottom, just like some traders. what i havent seem are those annoying sold signs: "Too Late, But We've Got Others".
 
Anyone who wants to sell at the top must do so before public perception switches. Real estate closings are too slow to try to time the top. That is a sure way to failure. One must lock in near the top or be financially prepared to follow the cycle wherever it will go.

Interest rates are a factor. Supply and demand are factors. Oneway is right about running out of buyers. How can anyone think that everyone will want a new home forever?

When new housing prices begin to fall they will take resales with them. New housing is the most competitively priced and the Homebuilders are the best able to sell. Remember they will be using bond money. Resales will fall faster than New in just a little time.

We then have the right side of a head and shoulders. It will fall of its' own weight. It is not the end of the world, just a correction.

Real Estate is not linear. It is cyclical or for a better analogy, it is roundish. I like the stock analogy of sector rotation. Every sector will have its' time in the sun.

The new gold ETF will be controlled by the FED. It should be a rigged snakepit. If one wants gold or silver exposure, I think it should be thru Canadian investments. That way you can profit from the rise in G & Silver as well as being hedged with the rising Looney. I'd buy EDV.T for a wide range of exposure to some successful miners. From Newmont on down. Others are CEF.T, QC.T. I'd buy in C$ not pink sheets in the US. C$ should go to par with the US$.

I'd also get on the uranium bandwagon before the mob. CCJ is too high for a good ROI, IMO. I'd go with the top juniors. (I have) IUC.T, JNN.V, NCR.V, STM.V and maybe UEX.T (a lot of shares out for no UEX results). JNN has the best geologists in the field. NCR has the best looking property I know of. IUC has the big backing. The values in Athabasca Basin, Canada should go crazy.

My $ is going into the above. I want to profit from the falling dollar and the resurrection of nuclear energy. Uranium should go to $100/lb from $20. There are only 6-8 good plays in U. China has plans for 2 new reactors/yr for 10 yrs. It should be easy $.

The trend is your friend.
 
Quote from Billbuild:


I'd also get on the uranium bandwagon before the mob. CCJ is too high for a good ROI, IMO. I'd go with the top juniors. (I have) IUC.T, JNN.V, NCR.V, STM.V and maybe UEX.T (a lot of shares out for no UEX results). JNN has the best geologists in the field. NCR has the best looking property I know of. IUC has the big backing. The values in Athabasca Basin, Canada should go crazy.

The trend is your friend.
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You might want to take a look at the links to the two indexes I've posted just above. They seem to reflect your idea "the trend is your friend".

Secondly, most of the stocks you have mentioned above are what I call junk, with the exception of CCJ. Either way, I find it interesting that you are willing to take a shot with issues of this dubious quality that could easily drop by say 30-50% with a general reaction in the metals market, but you are "fearful" of real estate which you evidently believe could drop what...30-50%.

I do believe real estate could drop...in fact in my area of the midwest I think it has to a minor degree. Nonetheless, the risk levels in real estate in my local area are nothing like the risk levels in some of those uranium stocks you mentioned. Just a few thoughts.

OldTrader
 
ADRs of foreign cos. particularly Canadian in energy sector. get exposure to natural resource/"real assets" and dollar hedge.

oldtrader - well, im on the front lines everyday - have been for 20 years. the investment market here in Southern California remains strong - the prices in other states, some with structural vacancy issues, were also strong, particularly in comaprison to the supply/demand dynamics. please note that much of the 1031-exchange activity is driven by tax avoidance. the residential market has apparently slowed.

real rates are negative, that wont last. individual RE is a long-duration asset with high transaction costs - real estate i-shares can be sold in less than a second. i traded my conviction and sold some properties... time will tell whether it was the right move pr not, but for me, this is not a theoretical conversation.

whether US real estate is a USD hedge would be an intersting discussion.
 
Quote from OldTrader:

Here's a link to a couple of charts that show how the stock market is viewing real estate at this time:

http://www.ttrader.com/mycharts/display.php?p=28591&u=oldtrader&a=OldTrader's%20Charts&id=1300

http://www.ttrader.com/mycharts/display.php?p=28590&u=oldtrader&a=OldTrader's%20Charts&id=1300

Each of these indexes has recently trades at all time highs. Evidently the stock market is not seeing what many of the posters to this thread are seeing. Just thought you might be interested.

OldTrader
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Stock market sees reality while the doom and gloomers here live in apartments. LOL.
 
Old Trader and Convert, we need you. I hope you guys don't change. And I am being dead serious. We need buyers when we go to sell. We need folks who see the trend as up when we see it as down. And you need us.

If everyone thought the same there would be no market. You two do us a great service. Keep it up and I truely hope you act on your advice. You couldn't help us more.

Happy Trails and thanks for having opposing views. That helps make this whole world so interesting. If everyone agreed, this would sure be a dull place.
 
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