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

LOL.
Not a realtor, a realist.

If charts were reliable, fundamental analysis would be a waste of time. Buffet would not exist and there would be many many billionaire chart readers.

If anyone wanted any laughs, read this thread then compare it with reality at the thread I started Housing rolling along. You'll notice the doom and gloomers of this thread don't post over at the other thread, the one where reality exists. At least oneway posted there, but after calling D.R. Horton a POS, he ain't coming back.
 
As a realtor and trader here in NY, I can honestly say that real estate is a good investment, totally depending on where you live.

Here in NY (Long Island) prices have appreciate by 50% over the last 2.5 years. Homes are now sitting on the market (inventory levels much higher than at any time in the last 6-7 years), rentals are a glut on the market (investors can no longer flip for a profit, so they are attempting to rent out to cover their carrying charges), and rates are starting to tick up. Not to be a doom and gloomer, but the bubble is ripe for a pop, particularly if interest rates increase appreciably. This will set off a new round of foreclosures, and will inevitably cause a spiral downward.

We saw it here last in the early 1990's, and it will happen again, no doubt. If you recall, people thought the dot com boom was going to last forever as well.

The good news is that over the LONG term, real estate always appreciates.

Be careful out there.

Doug
 
Greenspan on Nov. 20th:

"Rising interest rates have been advertised for so long and in so many places that anyone who has not appropriately hedged this position by now is obviously desirous of losing money."

'Nuff said.
 
Here is a little article with a reasonable guide to where rates may be heading. If any of you think the 80's are coming back, ya need to check into the Betty Ford Clinic.

"By the end of 2005, the fed funds rate will be in the vicinity of 3.5 percent, according to the consensus.

The yield on a 10-year Treasury note is expected to average 5.7 percent over the same period.

And for the five-year period running from 2005-2009, the economists are projecting average, inflation-adjusted growth in U.S. gross domestic product at 3.3 percent."

To me thats based on a healthy world economy. I'm expecting a screw-up somewhere with everyone raising rates.
 
Quote from Covertibility:

Here is a little article with a resonable guide to where rates may be heading. If any of you think the 80's are coming back, ya need to check into the Betty Ford Clinic.

"By the end of 2005, the fed funds rate will be in the vicinity of 3.5 percent, according to the consensus.

The yield on a 10-year Treasury note is expected to average 5.7 percent over the same period.

And for the five-year period running from 2005-2009, the economists are projecting average, inflation-adjusted growth in U.S. gross domestic product at 3.3 percent."

To me thats based on a healthy world economy. I'm expecting a screw-up somewhere with everyone raising rates.
More...

You've clearly never tracked the accuracy of economist's forecasts. I have. All the forecast tell you is the expecations funds are positioning for today. Otherwise, they are worthless.

When you read 'concensus,' think 'herd.'
 
BlueHorse, yup that is it. AG is waving a big red flag and pulling the fire alarm bell. He is covering himself (after first saying get your ARM loans) or he has some shred of honesty left.

Convet, so incredible. Seeing a DT is not doom and gloom. There will be a basing then an uptrend later. Get off the gloom and doom name calling bit.

Is every trader who sees a DT a doom and gloom fool? Of course not. We all know RE and the Market go in cycles.
 
Quote from Covertibility:
If any of you think the 80's are coming back, ya need to check into the Betty Ford Clinic.
More...
No one expects interest rates to head up to double digits...where did that one come from??? Fact is real estate is already stumbling a bit with some mixed news the last few months, and that was with real long term interest rates actually heading down. If interest rates head back up just a couple of points, real estate will be dead by the time they get there.

Quote from Covertibility:

If charts were reliable, fundamental analysis would be a waste of time. Buffet would not exist and there would be many many billionaire chart readers.
More...
Charts are not everything, but often they tip you off where trends are headed. When price action breaks through long term trend lines, that is a pretty reliable indicator of things to come.

Buffet would have nothing to do with buying into this bubble. He buys value and quality, beaten down companies with old world quality, not panic buying into a mania. In fact though he usually holds long term, he has been known to 'flip' holdings that have had unusual short term appreciation (I can look up the when/where if you like). So you might even say he would be a net seller in today's real estate market. Are you saying Buffet never looks at a chart???

Quote from Covertibility:

If anyone wanted any laughs, read this thread then compare it with reality at the thread I started Housing rolling along. You'll notice the doom and gloomers of this thread don't post over at the other thread, the one where reality exists. At least oneway posted there, but after calling D.R. Horton a POS, he ain't coming back.
More...

The other thread got a little stale with you actually posting cheerleader press releases from DR Horton and the like. Maybe you can start an Enron thread...they had some great press releases too of double digit growth and all things wonderful. (the charts showed the real truth BTW)

My comments about DR Horton being a POS were that all publicly traded companies press releases have to be taken with a grain of salt. Their comments are self serving and by definition suspect.
 
Southern Cal. and areas that have seen similar price appreciation are probably on the verge of topping out..... With that being said it is hard to compare those markets with others in the mid west, south, etc.

It is my feeling that there are "bubbles" (for lack of a better word) in some markets and not others. Only time will tell what lies ahead for the over heated markets (my guess would be price depreciation). But for much of the country I am not as concerned....


Needless to say at some point there will be a great shorting opportunity in the home builders................. I am waiting to jump in after the carnage begins.
 
Quote from BlueHorseshoe:

You've clearly never tracked the accuracy of economist's forecasts. I have. All the forecast tell you is the expecations funds are positioning for today. Otherwise, they are worthless.

When you read 'concensus,' think 'herd.'
More...

You expect inflation over 4% ?

Oil and commodities have had huge runs over the past year or so and yet the inflation numbers were tame.

Its very hard to see inflation anywhere north of 3% for as far as the eye can see.

There was an article in the Economist, May 2003 I believe, that explained how central banks who overemphasized rate hikes trying to keep inflation below a target always overdue it and can lead to deflation. The article cited Germany.
 
Real Estate is dying? Investment-wise what is the next Asset Class Du Jour?
Let's assume and I am not convinced that Real Estate is tanking. Stocks are probably done also, with the raising rates and at best we can expect so so returns.

Anyone shifting funds into new areas and what are they?

____________________________________________________

There's been some really constructive discussion re. RE on this thread and I've enjoyed reading it. Back to the original thesis however, I'm surprised noboby has touched on commodities.

We're in the 2nd/3rd year of a commodities bull market phase. Most bull cycles in commodities last 10+ years--some have lasted >20. Other than riding the boom in oil and gas stocks in 2004, what have others on this board been doing vis a vis commodities?

Anyone bullish on sugar? Coffee? Aluminum? How are you buying/holding these? What's your time horizon? What return do you expect?

Any insight would be appreciated.

Dakota
 
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