Best RE investment opportunities in Austin? (Detroit: foreclose, credit rating, loans)

[atxcio]

Originally Posted by Austin97

The rich have always had estates away from the core while the poor were forced to live where they worked.

I'm not so sure. The "rich" have always had big estates, maybe not inside the core but very close to it -- think Pemberton, Tarrytown in Austin, River Oaks in Houston, Park Cities in Dallas. Expensive land close to the core.

The people with "estates" far away from the core are mostly the middle class, with some rich who like to be far away... and some rural poor.

[atxcio]

Originally Posted by jobert

But has it tanked to the point of being reasonably priced yet? I think any property that is valued well in comparison to it's utility will do well. Paying for scarcity (real or perceived) is a luxury that people won't pay for anymore. This false sense of scarcity is what drove the real estate mania over the last 10 years, and people are wiser to it now.

If not scarcity, then what ARE people with money paying for? That's 1/2 of the whole supply and demand equation... and 2/3 of the location, location, location formula

I do agree there was perceived scarcity during the real estate boom, but I don't think that drove the mania -- it just helped it along. The easy money drove speculation, and rampant speculation helped create perceived scarcity, which in turn drove more speculation.

[inthecut]

Originally Posted by atxcio

I'm not so sure. The "rich" have always had big estates, maybe not inside the core but very close to it -- think Pemberton, Tarrytown in Austin, River Oaks in Houston, Park Cities in Dallas. Expensive land close to the core.

The people with "estates" far away from the core are mostly the middle class, with some rich who like to be far away... and some rural poor.

You bring up an interesting point, in that Austin doesn't have many in-town swank neighborhoods...I mean totally swank, like Chicago's Gold Coast, Fifth avenue, Rodeo, Beacon Hill, South Beach, etc....there are high end areas, but not really full fledged swank neighborhoods with the typical carriage trade retail and services....in that sense, Austin is splendidly down-to-earth and egalitarian for the most part, a wonderful anomoly in this day and age, and actually quite endearing, to be honest..

One of the reasons people simply love this place...

[inthecut]

Originally Posted by atxcio

If not scarcity, then what ARE people with money paying for? That's 1/2 of the whole supply and demand equation... and 2/3 of the location, location, location formula

I do agree there was perceived scarcity during the real estate boom, but I don't think that drove the mania -- it just helped it along. The easy money drove speculation, and rampant speculation helped create perceived scarcity, which in turn drove more speculation.

All facilitated by the Glass-Seagall act being retracted by Clinton, allowing investment banks to get into the mortgage biz....and the Fed doing their little part...was a three ring circus, was it not?...and hard to believe no one saw this coming....then again, greed is the biggest blinder..always has and will be...

[sliverbox]

Whenever I hear people mention "real estate investing" it makes me grate my teeth because the frenzy or investing in housing is what landed us in a recession. The truth is that its more like gambling than anything. IF you were lucky, bought say- in coastal California 15-20 years ago, sold at the peak of the boom, and then moved somewhere cheaper than yeah- you might have done alright. But I know way more people who didn't and are either out of a home, out of money, or saddled with a huge mortgage payment. As someone else mentioned- a home typically barely keeps up with inflation.

In reality a home is really a financial LIABILITY. Until you pay it off the bank owns it and come the day you might lose a job, have severe health problems, or whatever, you risk losing the home and perhaps the money you poured into it. The plain and honest simple truth is that if you really want to make money, stocks, bonds, and old-fashioned 401k's, IRA's and the like are your best bet. Its hard to believe given the shape of the economy now, but over the past 100 years stocks have historically outperformed real estate hands-down.

If you buy a home- buy it because you want to live in it. That's it.

[austin-steve]

Originally Posted by sliverbox

Whenever I hear people mention "real estate investing" it makes me grate my teeth because the frenzy or investing in housing is what landed us in a recession.

Actually, it was bad/stupid lending practices that caused the problem. The lending practices were caused by bad/stupid politicians. Investing in real estate, in and of itself, is not to be blamed for the financial mess.

In reality a home is really a financial LIABILITY. Until you pay it off the bank owns it ...

A home is indeed an asset, the best kind in fact, an appreciating asset.

The associate liability would be any loan for which the home is collateral.

Steve

[10scoachrick]

Originally Posted by rubberneck

Any and all opinions are welcome. It's a gamble no matter what, but I'm interested in what your rationales are.

That Montelongo Flipper-house dude in San Antonio would be happy to sign you up for one of his seminars! Just check out his infomercial.

[sliverbox]

A home is indeed an asset, the best kind in fact, an appreciating asset.

uh... have you been reading the news lately? A lot of times they don't appreciate in fact. Ask any literate economist and unless that home is paid for- its a liability.

Read your history and it clearly shows that over time, homes have only gone up maybe 3-4% annually over the past 100 years and stocks have performed on average 7-10% annually. In other words if you took a dollar and invested it in a house and then took another one and invested it in stocks after 30 years the stocks would be worth a lot more. Sure- if you buy a home to live in in 30-40 years it will probably be worth considerably more than what you paid, which is to be expected. But if one were to choose to "invest" in real estate ) as in buying houses for profit in addition to the one you live in) instead of taking that same money and putting into stocks you would actually make LESS money.

But then again I see you're a real estate agent so I assume you don't buy that argument at all.

[inthecut]

Originally Posted by sliverbox

uh... have you been reading the news lately? A lot of times they don't appreciate in fact. Ask any literate economist and unless that home is paid for- its a liability.

Read your history and it clearly shows that over time, homes have only gone up maybe 3-4% annually over the past 100 years and stocks have performed on average 7-10% annually. In other words if you took a dollar and invested it in a house and then took another one and invested it in stocks after 30 years the stocks would be worth a lot more. Sure- if you buy a home to live in in 30-40 years it will probably be worth considerably more than what you paid, which is to be expected. But if one were to choose to "invest" in real estate ) as in buying houses for profit in addition to the one you live in) instead of taking that same money and putting into stocks you would actually make LESS money.

But then again I see you're a real estate agent so I assume you don't buy that argument at all.

People aren't making money in either...RE AND stocks are tanking now, a banks pay out 1-2% interest....what IS appreciating? If you know, CNBC would love to have you host a regular morning show explaining where a 7-10% return can be had!

[austin-steve]

Originally Posted by sliverbox

uh... have you been reading the news lately? A lot of times they don't appreciate in fact. Ask any literate economist and unless that home is paid for- its a liability.

Real estate appreciates over time, always. Yes, there are ups and downs, and also examples of specific permanent depreciation (some areas of Detroit for example), but those are easy to avoid by following simple common sense rules when buying.

Regarding assets vs. liabilities, have you taken high school accounting?

Read your history and it clearly shows that over time, homes have only gone up maybe 3-4% annually over the past 100 years and stocks have performed on average 7-10% annually

Your ignoring leveraging and other factors such as income tax benefits. I'm not going to spend time explaining it to someone who doesn't know an asset from a liability.

In other words if you took a dollar and invested it in a house and then took another one and invested it in stocks after 30 years the stocks would be worth a lot more. Sure- if you buy a home to live in in 30-40 years it will probably be worth considerably more than what you paid, which is to be expected. But if one were to choose to "invest" in real estate ) as in buying houses for profit in addition to the one you live in) instead of taking that same money and putting into stocks you would actually make LESS money.

But then again I see you're a real estate agent so I assume you don't buy that argument at all.

I'll let someone who isn't a real estate agent explain it to you then.

Good luck,

Steve