I feel that real estate has & will always be a good investment. Historically, this has pretty much always held to be true. Granted, there are many out there & especially some who were trying to be investors and bought at the wrong time, to say the least, that might feel differently.
I think for the majority of us, our real estate purchases have done very well for us. Especially, in the past several years where we have seen so many either refinancing and cashing out or taking home-equity loans on their property. But now that the market is changing we are hearing a lot of grumbling. I think a lot of people are getting very scared.
Too many have been relying on their property’s wealth. Take this for example, in Florida 16% of new car purchasing in 2006 was paid with home equity loans. That is astounding. Mind you, California was at 30% while the national average is 7%.
Wages have not appeared to have kept pace with inflation. With the increased wealth in our homes & relatively low interest rates, etc; people were making up for this shortfall by refinancing their homes & taking cash out. Now with housing slowdown, taking equity out of your home is not as readily available.
But, Real Estate will still remain to be a great investment in the long-term. It that is what has to be remembered. Yes, some have done great in the short term, but real estate has pretty much always been a long-term investment.
Thank goodness we are in a great industry!
Until next time – Marc It Sold!