Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-09-2011, 01:22 PM   #21
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
It all depends on the timing of the real estate purchase. I'm certain that my home is worth significantly less than what I have in it. (purchased in 2005+initial renovations+extensive basement development aka man caving). But since I never intend to move, what does it matter? I love living here, and, much more importantly, DW loves living here. But I do feel for those folks who want to move for better job opportunity, but can't because of non-sale of their house. So much for THAT part of the American Dream (Nightmare. )
__________________

__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
tightasadrum is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-09-2011, 06:14 PM   #22
Recycles dryer sheets
glippy's Avatar
 
Join Date: Mar 2010
Location: New England
Posts: 197
Quote:
Originally Posted by ERD50 View Post
Isn't this a good thing in many ways?
...
Seems the good outweighs the bad?
I was saving up for my first real estate purchase all through the last decade. It kept seeming like prices were going up faster than I could put money away (and I was tucking away a LOT of money, especially compared to the typical young worker). I figured I'd be doomed to living in studio apartments for the rest of my working life and then retiring to the middle of nowhere to build something I could actually afford. It was ridiculous.

I couldn't get the typical fly-by-night mortgages they were giving out like lollipops either because of some bad credit from my teen years. Turns out, thank goodness for that.

Then, low and behold, in late 2010, rather than having just a down payment saved up, I was able to purchase a place outright, twice over.
__________________

__________________
glippy is offline   Reply With Quote
Old 12-09-2011, 10:46 PM   #23
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Regarding the thread title "Lost Decade: Real Estate"

...Are we sure that title is correct? Anecdotal evidence aside, this picture was circulating last February:


Then this update in September:


Of course I don't know if those charts are accurate (I've just seen them around), but I'm sure some research could verify fairly easily.

Of course, even if true it's a fairly cherry picked time period, and equities smash real estate over the last 30 years-ish. However real estate has been through a rough 4 years or so, but if the chart is true even that hasn't made it a lost decade for RE.
__________________
arebelspy is offline   Reply With Quote
Old 12-09-2011, 11:36 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,288
Quote:
Originally Posted by glippy View Post
I was saving up for my first real estate purchase all through the last decade. It kept seeming like prices were going up faster than I could put money away (and I was tucking away a LOT of money, especially compared to the typical young worker). I figured I'd be doomed to living in studio apartments for the rest of my working life and then retiring to the middle of nowhere to build something I could actually afford. It was ridiculous.

I couldn't get the typical fly-by-night mortgages they were giving out like lollipops either because of some bad credit from my teen years. Turns out, thank goodness for that.

Then, low and behold, in late 2010, rather than having just a down payment saved up, I was able to purchase a place outright, twice over.
Good for you! Over a lifetime, I think what separates most successful people from those less successful ones is getting themselves in position to take advantage of
opportunities that present themselves. There is some luck in all that, but overall, if you can swing at some of the right things and some turn out for the good, and avoid some of the pitfalls, you will be way ahead of the game.

I was lucky that the stock market bull occurred in the 90's. But if I had not got myself in a position where I had money saved up to invest, and the basic knowledge to actually invest it, it would not have helped me one bit.


-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 12-10-2011, 03:15 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by arebelspy View Post
Regarding the thread title "Lost Decade: Real Estate"

..


Then this update in September:


Of course I don't know if those charts are accurate (I've just seen them around), but I'm sure some research could verify fairly easily.

Of course, even if true it's a fairly cherry picked time period, and equities smash real estate over the last 30 years-ish. However real estate has been through a rough 4 years or so, but if the chart is true even that hasn't made it a lost decade for RE.

I am pretty sure that Real Estate return is accurate since the Case Shiller index starts at 100 as of Jan 2000 and is currently at 141.3. The stock returns on your chart don't correspond with the Morningstar numbers (I suspect they ignored dividends and maybe some other things).

This chart




Shows the total return of 10K invested on Jan 1,2000 to Sept 1, 2011
Dow $13,117
S&P 500 $10,153
VFINX $10,047 (Admiral shares would higher)
Nasdaq Composite $12,201

Now it require $13,149 today purchase $10K worth of goods in 2000. So the only investment that beat inflation since 2000 was Real Estate. I guess the best horse in the glue factory.
__________________
clifp is offline   Reply With Quote
Old 12-10-2011, 07:39 AM   #26
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,487
Quote:
Originally Posted by clifp View Post
I am pretty sure that Real Estate return is accurate since the Case Shiller index starts at 100 as of Jan 2000 and is currently at 141.3. The stock returns on your chart don't correspond with the Morningstar numbers (I suspect they ignored dividends and maybe some other things).


Shows the total return of 10K invested on Jan 1,2000 to Sept 1, 2011
Dow $13,117
S&P 500 $10,153
VFINX $10,047 (Admiral shares would higher)
Nasdaq Composite $12,201

Now it require $13,149 today purchase $10K worth of goods in 2000. So the only investment that beat inflation since 2000 was Real Estate. I guess the best horse in the glue factory.
Case Shiller is a weighted national index. The data by city shows that between 01/2000 and 09/2011, average real estate prices in 11 cities grew less than inflation, 4 kept even, and 5 rose more than inflation.

Detroit 73
Las Vegas 94
Atlanta 96
Cleveland 100
Phoenix 100
Charlotte 112
Minneapolis 114
Dallas 116
Chicago 118
Denver 125
Tampa127

San Francisco 133
Portland 136
Seattle 136
Miami 139

San Diego 153
Boston 154
Los Angeles 168
New York 170
Washington 188

Real estate in a couple of cities were profitable investments. The others never left the glue factory.
__________________
MichaelB is offline   Reply With Quote
Old 12-10-2011, 07:55 AM   #27
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,487
Quote:
Originally Posted by ERD50 View Post
Good for you! Over a lifetime, I think what separates most successful people from those less successful ones is getting themselves in position to take advantage of
opportunities that present themselves. There is some luck in all that, but overall, if you can swing at some of the right things and some turn out for the good, and avoid some of the pitfalls, you will be way ahead of the game.

I was lucky that the stock market bull occurred in the 90's. But if I had not got myself in a position where I had money saved up to invest, and the basic knowledge to actually invest it, it would not have helped me one bit.


-ERD50
Living in a system that systematically creates opportunity for the many and being able to make choices is the critical factor for successful societies that then enable individuals to make positive choices to their benefit. To get ahead of the game you need to be in a game that gives you the tools, enables you to make choices and allows you to benefit.
__________________
MichaelB is offline   Reply With Quote
Old 12-10-2011, 08:13 AM   #28
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
Very interesting reading. Got to wondering how my last house did so I pulled it up on zillow.com. We bought it in 1998 for $121500, but then we updated it. Put about $30K in it. Sold it in 2006 at the heigth of the market for $310K. Today zillow shows it at $151300. Talk about ups and downs. We hit it at the top of the market and no house in that area has ever sold for that kind of price, and may never again.
__________________
JOHNNIE36 is offline   Reply With Quote
Old 12-10-2011, 08:17 AM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,978
The appraised value of our home is up 40% after 19 years, though down from it's peak around 2005-2006. But I don't really care now that I own a house. If we move and buy a comparable home elsewhere, while I may get less (more) selling - odds are the next house I buy will also be less (more). Unless one is underwater on a mortgage, it all comes out in the wash for the most part...no?

It appears to be a great time for first time buyers thanks to interest rates if not prices (though they may go lower in many places).
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 12-10-2011, 08:27 AM   #30
Full time employment: Posting here.
tightasadrum's Avatar
 
Join Date: Aug 2006
Location: athens
Posts: 802
The good part of real estate at the moment as an investment is that there are some good deals if you don't get emotionally involved in the purchase. I've got all the houses etc. I want otherwise I'd be checking weekly for distressed property. With the market in such turmoil, real estate has a lot of appeal for growth. The trick is buying it below market and be willing to hold it for the long term, to state the obvious. But there are deals right now if you want to deal with the labor and maintenance overhead of owning real estate. Passive investors should slowly back away.
__________________
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
tightasadrum is offline   Reply With Quote
Old 12-10-2011, 08:59 AM   #31
Recycles dryer sheets
 
Join Date: Dec 2008
Posts: 116
I bought a condo in 2003 for 189 and sold it for 198 in 2006 AFTER I'd already bought a house for 292. The condo market was soft in 2006 so I'm glad I was able to unload the condo at a wash. Zillow shows the condo now to be worth only about $90 now (ouch!). I'm so glad I got out of it because we needed more space.

The bad news is our house is probably only worth 245 but at least we're in a space that meets our needs and don't have to deal with obnoxious condo neighbors, the HOA and assessments.
__________________
FreqFlyer is offline   Reply With Quote
Old 12-10-2011, 09:21 AM   #32
Recycles dryer sheets
 
Join Date: Feb 2011
Posts: 200
We escaped So. Cal. in the summer of 2008, having done very well selling the home we bought in 1997. We thought we had missed the peak, but were fine with the price we got. Then the crash happened, and we were so glad we got out. The new owners have lost $200K so far. Our new house has slipped a bit but we plan to be here for at least 10 years, and just refinanced to a lower rate.
__________________
PaddyMac is offline   Reply With Quote
Old 12-10-2011, 11:18 AM   #33
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Quote:

I am pretty sure that Real Estate return is accurate since the Case Shiller index starts at 100 as of Jan 2000 and is currently at 141.3.
Now if I could just figure out a way to buy the Case Shiller Index .... I'ld be alot happier then I am with the values of my properties over the same time.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 12-10-2011, 11:19 AM   #34
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,134
Quote:
Originally Posted by tryan View Post
Now if I could just figure out a way to buy the Case Shiller Index .... I'ld be alot happier then I am with the values of my properties over the same time.
Maybe Vanguard will offer a CSI fund...
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 12-10-2011, 11:48 AM   #35
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Quote:
Originally Posted by tryan

Now if I could just figure out a way to buy the Case Shiller Index .... I'ld be alot happier then I am with the values of my properties over the same time.
Psssh. Who wants to stick with the average? Some areas have done much better than that. Buy in those areas. You can beat the market.
__________________
arebelspy is offline   Reply With Quote
Old 12-10-2011, 12:22 PM   #36
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
yeah ... silly me, now I just need to go back in time with all this great information
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 12-11-2011, 04:51 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by arebelspy View Post
Psssh. Who wants to stick with the average? Some areas have done much better than that. Buy in those areas. You can beat the market.
Not easy to do if you live in Vegas or Detroit. Although hopefully next decade the laggards will catch up.
__________________
clifp is offline   Reply With Quote
Old 12-11-2011, 10:22 AM   #38
Full time employment: Posting here.
arebelspy's Avatar
 
Join Date: Apr 2011
Posts: 625
Quote:
Originally Posted by clifp

Not easy to do if you live in Vegas or Detroit. Although hopefully next decade the laggards will catch up.
True.

How do I short real estate again?

__________________
arebelspy is offline   Reply With Quote
Old 12-11-2011, 10:27 AM   #39
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Quote:
Originally Posted by arebelspy View Post
Psssh. Who wants to stick with the average? Some areas have done much better than that. Buy in those areas. You can beat the market.
Nah, I only buy stocks that go up. If they don't go up then I don't buy them.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 12-12-2011, 12:45 PM   #40
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Quote:
Originally Posted by landover View Post
One of my ex coworker is selling his house in DC suburb in MD. They bought the house for around 500k around 2002-3 and now asking 950k for that. I don't know if they will get it but also don't need to go down to 500-600k range to sell.
Yep, D.C. suburbs with fantastic schools are seemingly immune to the housing crisis. There is a significant turnover in high-paying jobs and no shortage of buyers. This is not to say that a "shack" in a good school district will automatically command 7-figures, but if that shack is close to the D.C. line in, for example, Bethesda/Chevy Chase, the land might be worth that alone.

My wife and I bought in a D.C. suburb and paid a hefty price for our house. We sometimes question whether we paid too much, but the comps in our neighborhood still support the price. We also have many things the comps don't have - good-sized front and backyards (both level), fully-finished basement with bedroom and bath, large rooms that "flow", and enough room on the property to build out if we want. Some things in the house still need to be upgraded, but we should get back out any money we put in, assuming such amounts are reasonable.

I don't look at our house as an investment per se, but I do expect a modest return on our house when we do sell it in 20 years or so.
__________________

__________________
Jay_Gatsby is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
30 With a New Hobby in Real Estate srlimoges Hi, I am... 151 04-08-2013 09:51 PM
Are real estate stocks low now? GregLee Stock Picking and Market Strategy 13 08-31-2011 09:09 PM
Self Directed IRA real estate investing o2chim2 FIRE and Money 12 08-10-2011 05:39 AM

 

 
All times are GMT -6. The time now is 10:01 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.