Real estate increase 25% in 1 year in my town.

[ultramartian]

Who knows they might even figure how to harness energy from humans while they are plugged in.

Musk and Gates might want to plug the human brains to the network for mining or something.

[SOL]

Who knows they might even figure how to harness energy from humans while they are plugged in.

Musk and Gates might want to plug the human brains to the network for mining or something.

That's assuming they have not already been plugged in and think they are ruling the world. Don't forget the future VR will be so real, one will have a hard time telling the difference between this world and that world. Some people might never want to leave that world.

[Yodean]

[Triplethought]

and of course my daughter is moving to hong kong in January

[Yodean]

Just taking a quick look without spending too much time - I am not interested in North American real estate of any sort at the moment, unless there is a momentous correction - I think there's even a chance it could drop below $60, if you interpret the current price action as having dropped through the neckline of a head and shoulders formation.

@TT: this thread was from quite awhile ago ... I do expect U.S. real estate, overall, to crater next year, somewhat.

*****
Shares of Zillow Group Inc were set to open at over a 14-month low on Wednesday, as analysts expressed shock over the online real-estate firm's move to exit its business of buying and selling homes due to unpredictable home prices, three years after it was expected to disrupt the real estate market.

Zillow's Class A shares were down 14.1% at $73.39 premarket.

Volatility in home prices in the past few months have hurt Zillow's ability to forecast prices accurately, it said on Tuesday. The company concluded that "continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility."

For example, U.S. median home prices rose 18.4% in July, 14.9% in August before accelerating 18.7% in September.

"Our aim was to become a market maker, not a market risk taker," Zillow co-founder and top boss Rich Barton said in a letter to shareholders.

At least half of the brokerages covering the Seattle, Washington-based company cut their price targets on Wednesday following the news.

"A Shocking End to an Ambitious Project," said Wedbush analyst Ygal Arounian, who also called the move "a tremendous setback" for a business that was solely focused on disrupting the residential real estate. Arounian cuts price target on the stock by $19 to $67.

Brokerage Piper Sandler said though the move indicates that the company will return to its roots as an asset-light model, it is a major strategic shift and raises questions about the company's future direction.

Piper Sandler cut its rating on Zillow to ‘neutral' from ‘overweight' and cut the price target by $39.

*****

[harryg]

Most of my UK friends have huge mortgages and houses 'worth' 500k, 1m+ etc. I'm not interested in that route - we became debt-free at the age of 30 and that suits us well. But I can't help wondering if they are somehow playing the game better than us. And I find that entry to the UK housing market is now, for us, almost out of reach. We're thinking of buying something while we can - the idea that I might not be able to buy a house in my own country is difficult for me to accept (we lived abroad for 20 years). If you can't beat 'em, join 'em?

I would be interested in if people here think, in general terms, that the inexorable rise of nominal property prices in the UK/US, for example, will come to an end due to deflation, or will continue due to currency devaluation.

[SOL]

Most of my UK friends have huge mortgages and houses 'worth' 500k, 1m+ etc. I'm not interested in that route - we became debt-free at the age of 30 and that suits us well. But I can't help wondering if they are somehow playing the game better than us. And I find that entry to the UK housing market is now, for us, almost out of reach. We're thinking of buying something while we can - the idea that I might not be able to buy a house in my own country is difficult for me to accept (we lived abroad for 20 years). If you can't beat 'em, join 'em?

I would be interested in if people here think, in general terms, that the inexorable rise of nominal property prices in the UK/US, for example, will come to an end due to deflation, or will continue due to currency devaluation.

The rise in property prices is due to supply and demand. For some reason (purposely we suspect), the housing supply is tight both in the US and UK, so prices will rise but then as is always the case something will come along to nip the bubble. When is hard to say. Buying a house in an overheated market, in general, makes no sense. The quality of life is set to worsen in the worsen, the trend has changed for the West and North America. Greece might be a good option. Having said that if you can get a good deal (a fixer-upper) it might be something to look into provided you are not going to marry the property. In other words, if one is prepared to sell when the time is right then buying now even though a bit late in the cycle might not be a terrible option

[AstuteShift]

I’m not a fan of debt based investments either, once you’re free financially you turn allergic to mass mindset strategies lol

The only exception I’ll make is when the real estate market absolutely just plummets to mouth watering levels

[Triplethought]

Most of my UK friends have huge mortgages and houses 'worth' 500k, 1m+ etc. I'm not interested in that route - we became debt-free at the age of 30 and that suits us well. But I can't help wondering if they are somehow playing the game better than us. And I find that entry to the UK housing market is now, for us, almost out of reach. We're thinking of buying something while we can - the idea that I might not be able to buy a house in my own country is difficult for me to accept (we lived abroad for 20 years). If you can't beat 'em, join 'em?

I would be interested in if people here think, in general terms, that the inexorable rise of nominal property prices in the UK/US, for example, will come to an end due to deflation, or will continue due to currency devaluation.

The rise in property prices is due to supply and demand. For some reason (purposely we suspect), the housing supply is tight both in the US and UK, so prices will rise but then as is always the case something will come along to nip the bubble. When is hard to say. Buying a house in an overheated market, in general, makes no sense. The quality of life is set to worsen in the worsen, the trend has changed for the West and North America. Greece might be a good option. Having said that if you can get a good deal (a fixer-upper) it might be something to look into provided you are not going to marry the property. In other words, if one is prepared to sell when the time is right then buying now even though a bit late in the cycle might not be a terrible option

I don't know about "purposely". Governments have made permit costs higher and taxes higher but that's what governments do - make it more costly as they sponge off productive elements of society and then express shock and outrage at the high cost of housing.

I keep wondering if automation such as 3D printed houses or factory stick builts with assembly on site will eventually lower home prices. So far that technology looks a ways off (10 or more years). The material they use to extrude 3D houses is more expensive than wood it seems. If I were Apple I'd be looking into the automated construction of large blocks of smart homes, including using horizontal boring to install water, sewer, gas, and electric lines to large swaths of lots without having to hire earth moving equipment. Way less complicated than building self driving cars. I know Warren Buffet owns some companies trying to automate building to an extent.

I think the FED artificially keeping interest rates low leads to long term unaffordability of housing (they distort the market). I think if I were in the situation of not having a home but wanting to invest in real estate I'd look to buy something in a rural area where prices haven't been bid up yet (think of someplace like Calumet Michigan in the U.S. where there is no commerce and it's extremely hard to get to). Or on the outskirts of your city that has a commute (especially if you can work remotely most days). Even if I didn't live in a community I'd want a property that would rent year round and I'd want a community with potential to grow over time.

Renting so you can avoid debt and high real estate prices strikes me as a losing game. You end up getting rents raised on you (rent is ultimately tied to the price of the asset), being forced to move often as landlords sell properties and generally remain a "rolling stone". You can surf to lower prices which is fine when you're younger but it eventually becomes a pain in the ass moving all the time.

As for waiting for a correction - all I can say is I thought about waiting when I bought in 2017 and I'm glad I didn't. It has to correct (or at least slow down) sometime but that could be another decade. My own children are in this same boat (except for my youngest who already bought his house).

[Yodean]

Renting so you can avoid debt and high real estate prices strikes me as a losing game.

This is quite debatable - it depends largely on what kind of investor-trader you are: i.e. can you beat the real estate market returns consistently by putting money that you would have spent on your home into the markets? If you are able to do this, renting may make sense.

To use myself as one example, I have never owned brick and mortar real estate, thus far, and I'm getting to the point where I can only pretend to act young, as I am in my late forties. I did have a seven-figure USD position in leveraged REITS and MBS (yeah, I know, I was a bit nutso on this one), which got crushed into stardust in March 2020.

I quickly sold those positions - as well as others - at significant losses, and piled into A.I. stocks, and added to my precious metals and crypto positions.

The rest is history - 2020 ended up being my best year in the markets, until this year: currently, and I know things may change quickly, 2021 looks set to beat even 2020 for me, barring a late December crash.

If I had owned a home outright, it would have been difficult to achieve these gains. Sure, I could have gone on leverage in Spring 2020 and done more or less the same thing as I actually ended up doing, but it's a lot harder to do this in the midst of a crash.

It was challenging enough to sell big positions at a huge loss to pile into other assets that the mainstream media was saying were also going to go down. Almost everyone was running for the hills and hiding in cash at that time.

Going back to buying homes, another important factor to consider is that most people tend to forget that renovation costs and property taxes rise with inflation (i.e. loss of purchasing power), so it's not quite as good an inflation hedge as most think.

I think the key reason why people do okay with real estate, on balance, is that buying brick and mortar real estate with a mortgage forces them to save, and dial back other purchases a bit, and constrains them to HODL their real estate, so they don't "panic sell," which most of the Herd tends to do during market drawdowns.

Beyond money, if you rent, it's also easier if you are planning to become some type of Digital Nomad, etc., and stay liquid, mobile and agile. In my case, those are my long-term plans, and because of my current corporate structure, I also write off a portion on my rent as "corporate" expenses/office space. And so forth.

But yeah, if one sucks at trading-investing the markets, prolly better to buy a piece of property somewhere.

[Triplethought]

Renting so you can avoid debt and high real estate prices strikes me as a losing game.

This is quite debatable - it depends largely on what kind of investor-trader you are: i.e. can you beat the real estate market returns consistently by putting money that you would have spent on your home into the markets? If you are able to do this, renting may make sense.

To use myself as one example, I have never owned brick and mortar real estate, thus far, and I'm getting to the point where I can only pretend to act young, as I am in my late forties. I did have a seven-figure USD position in leveraged REITS and MBS (yeah, I know, I was a bit nutso on this one), which got crushed into stardust in March 2020.

I quickly sold those positions - as well as others - at significant losses, and piled into A.I. stocks, and added to my precious metals and crypto positions.

The rest is history - 2020 ended up being my best year in the markets, until this year: currently, and I know things may change quickly, 2021 looks set to beat even 2020 for me, barring a late December crash.

If I had owned a home outright, it would have been difficult to achieve these gains. Sure, I could have gone on leverage in Spring 2020 and done more or less the same thing as I actually ended up doing, but it's a lot harder to do this in the midst of a crash.

It was challenging enough to sell big positions at a huge loss to pile into other assets that the mainstream media was saying were also going to go down. Almost everyone was running for the hills and hiding in cash at that time.

Going back to buying homes, another important factor to consider is that most people tend to forget that renovation costs and property taxes rise with inflation (i.e. loss of purchasing power), so it's not quite as good an inflation hedge as most think.

I think the key reason why people do okay with real estate, on balance, is that buying brick and mortar real estate with a mortgage forces them to save, and dial back other purchases a bit, and constrains them to HODL their real estate, so they don't "panic sell," which most of the Herd tends to do during market drawdowns.

Beyond money, if you rent, it's also easier if you are planning to become some type of Digital Nomad, etc., and stay liquid, mobile and agile. In my case, those are my long-term plans, and because of my current corporate structure, I also write off a portion on my rent as "corporate" expenses/office space. And so forth.

But yeah, if one sucks at trading-investing the markets, prolly better to buy a piece of property somewhere.

All true. but in addition to the forced savings is the ability to write off interest payments, and (lately) anywhere between 6% and 25% per year appreciation. Those returns may well be equal or better to what you can do in the market. My point was that rent is usually derived as a % of purchase price so it will go up with property prices. Although I suspect many renters get "grandfathered" in to lower rents so maybe they make out long term.

But as you said, for the average joe his house ends up being his largest asset when he gets to retirement age. Like you my net worth is multiple millions but most of that is from buying real estate. I only started playing the market in July of 2020.

I think renovation and upkeep costs are much more significant than property taxes. I've easily spent $200K on my home improvements in the last 3 years. But the home also doubled in value. Taxes depends where you are but my PT is about 1% per year of the value of the home. That IS a cash drag that weighs against typical appreciation.

writing off a room of your house can be done whether you rent the house or buy it so not sure there is a difference there. When I rented a few years back after a divorce it sucked to have to move all my stuff after 1.5 years. Big house full of furniture and gear. I guess between all my hobbies I have to many "things" to move easily.

I'm surprised to hear 2021 you have done well. My returns this year have been very poor when compared with 2020. In fact, I could say my net asset value has been flat since March. This may be because I went heavily into the Trend Blazer portfolio, and the resulting losses in options. But I can't say even the main market update portfolio of TI has done great for me this year. Many plays in the negative. We didn't see much of that in 2020.

[Yodean]

I'm surprised to hear 2021 you have done well.

I use a lot of the T.I. techniques of assessing Herd Psychology (HP), as well as Sol's unique methods of Technical Analysis (TA) - as far as I can decipher them - mixed in with some of my own experimental ideas of how to assess HP through scanning mainstream media headlines, etc., and applied them to my non-T.I. portfolio, which includes cryptos, uranium, GAMANF stocks, precious metals, bonds, etc. among other assets.

One of the experimental ideas I have been working on is how to account for the degree of "network effects" in a given asset, and incorporate that into the asset's projected price action. Most mainstream analysts don't do this, or if they do, they don't assign a mathematical value to this metric. Thus far, it's been quite helpful.

Another of course is my little EBI (Experimental Bitcoin Indicator), which has performed surprisingly well - much better than my modest expectations, tbh.

I didn't expect 2021 to be a big year for me, since 2020 was so great, and 2021 was initially shaping up to be a decent year until recent months, when the gains accelerated.

Even though I don't have a lot of personal experience with options in my 17+ years of investing (the last two, full-time), I knew how dangerous they were from transitive trust experiences (i.e. colleagues who got destroyed by options or futures after some initial success with these instruments, then developed overconfidence, got smashed down), so I keep my options portfolio in the 1% - 3% allocation range of my net worth - currently < 1% due to my position trades increasing in value.

[AstuteShift]

With stocks it’s hard to lose unless you go all in crappy companies

With options, you must accept losing and manage risk. They’re incredible instruments for the astute player.

Besides just buying calls and puts, you can add a plethora of complex strategies with options that tailor to any market condition.

That flexibility is unmatched, freedom compared to stocks

You can be a great stock trader but a terrible option trader due to the time factor. The art of winning is also the art of letting go in options land. All that matters is your capital going up

[Yodean]

All that matters is your capital going up

That is all I focus on, and also to have as much fun trading and investing - it's really a Great Game, at the end of the day. You are going to have wins and losses, whatever instruments you use. Well, currently, with one notable exception - I don't buy Western Big Pharma companies. Period.

I don't worry about "APR," trying statistically to be in the top 5% of traders and be considered a "Top Gun," etc. If it happens, great, but that's just fuel for the Ego, and creates another troublesome barrier to transcend.

Increasing net worth consistently, learning constantly, having fun and developing better, more refined and creative ways of looking at market action are what investing and trading are really about for me. When it ceases to be entertaining, I will park everything in various sector ETFs and rebalance once a quarter.

[Eric]

All true. but in addition to the forced savings is the ability to write off interest payments.

This is why the masses lose. Most people (even CPAs and engineers with state licences saying they're good at math) think they are somehow ahead if they pay $20,000 in interest and get to deduct $20k from taxable earnings... Last I checked nobody in North America is taxed at 100%. One thing COVID has taught me is that just because you have a state licences saying you're capable of doing math, doesn't mean you're smart enough to realize you should do some ducking math. (See other posts about the Dunning Kruger Effect).

So smart guy (not aimed at anyone here), let's do the math... You paid $20k in interest and got to deduct it from table earnings... But you only pay 40% in combined state and federal taxes... So you paid the bank $20,000 for the privilege of not paying the government ($20k x .4=.$8,000) $8,000... According to my math you're $12,000 in the red...