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

[Triplethought]

Zillow says single family homes went up in my home town 25% in the last year (July 2020 thru July 2021). It projects 10% growth for the coming year. Pretty incredible. In the same time frame the S&P is up roughly 31% and Nasdaq roughly 35%. If you view any of these graphs in a long time frame, the curve is quite steep. For example here is the 20 year QQQ:


If you follow the "what goes up must come down" philosophy such graphs by themselves would tell you to suck your horns in (reduce risk in the market).

[AstuteShift]

Pretty crazy indeed

Real estate offers great gains but honesty I hate any concept of debt. I despise credit cards, loans and especially mortgages.

I witnessed my father struggle to pay his off, helped him last year to finally cut it. His health improved and he is more relaxed, however I had to constantly tell him no more buying since it’s pointless with the incredible market opportunity we have in stocks and crypto

Becoming an asset to a banker is like becoming a sheep to a butcher.

When the market lets out steam, those who have cash will be able to capitalize, no bank will offer a good deal when it’s in your favor anyway.

[Yodean]

Real estate offers great gains but honesty I hate any concept of debt. I despise credit cards, loans and especially mortgages.

Becoming an asset to a banker is like becoming a sheep to a butcher.

When the market lets out steam, those who have cash will be able to capitalize, no bank will offer a good deal when it’s in your favor anyway.

Pretty much this sums it up for me as well. Nobody really wants to hear this, though .

"Mortgage" at its roots means "death contract." Pretty creepy, if you think about it.

When I buy anything, including real estate, I buy with cash. Now I understand there are times when it may be beneficial to borrow, given low interest rates currently and for the foreseeable future, but it's just not for me.

Long-term, real estate should do okay in most places, but I suspect a significant pullback is looming in North America in the short to intermediate future.

I've had several contrarian indicators:

(1) one of my highly-leveraged friends who is consistently on the wrong end of most investments when it comes to timing, just recently bought a beach house;

(2) another one of my American old college friends who works for the U.S. Fed in Ukraine just bought a condo in Miami;

(3) locally, two of my ex-poker buddies just bought bigger houses;

We'll see how this all plays out . . .

[MarkD]

My take is you are correct, but may be early. Demand is still going to increase, particularly due to demographics. Add in the possibility of another CV19 lockdown measure and houses will move into Phase 2. I have estimated mid-20s plus as the turning point as my rents and first time buyers both pass through their life stages. All speculation on my part.

[AstuteShift]

Yea the mass mindset with real estate is just programming for perpetual slavery

Since we in a debt based world, if you’re not in debt then actually you’re considered a “dead beat” by the system

Once the digital USD comes online with a FED wallet, watch the government penalize you if you’re not in debt

[Triplethought]

So I was Curious about the entire US market and just looked. For the whole country the same numbers were 15% price increase this year for median house and 13.2% projected for next year. So my market is irrationally 10% ahead the rest of the market.

In theory Rents are basically tied to mortgage prices so those who are avoiding buying are going to be subject to higher rents (eventually) in proportion. So unless you believe there will be a big deflation in prices you have to jump on the merry go round sometime or just pay rent forever. For me the problem with the rent scenario was just when I got comfortable I had to move again.

A story to consider:
I have a friend (CPA and real estate expert) who bought a very expensive $2Million house in 2010 with a 7 year note and an "interest only payment". I thought the guy was CRAZY for buying such an expensive house and for not building equity (paying it down). 7 years later he refinanced into another 7 year balloon note interest only. I again thought he was CRAZY. But The house in Scottsdale is now worth $6 Million. He's had the use of an awesome house to raise his 3 kids and the $4 Million in equity he gained was FAR more than my 250K house that I diligently paid down on a 30 year amortization schedule (that house is now paid off but only worth 800K). Just something for you "never use debt" types to think about.

[Yodean]

A story to consider:
I have a friend (CPA and real estate expert) who bought a very expensive $2Million house in 2010 with a 7 year note and an "interest only payment". I thought the guy was CRAZY for buying such an expensive house and for not building equity (paying it down). 7 years later he refinanced into another 7 year balloon note interest only. I again thought he was CRAZY. But The house in Scottsdale is now worth $6 Million. He's had the use of an awesome house to raise his 3 kids and the $4 Million in equity he gained was FAR more than my 250K house that I diligently paid down on a 30 year amortization schedule (that house is now paid off but only worth 800K). Just something for you "never use debt" types to think about.

It's not black and white, and certainly there are situations where the story plays out like what happened to your friend. I know a few like that involving real estate in Vancouver, Canada - talk about a crazy real estate market.

But there's a lot of selection bias - for every one of those "borrow until you get filthy rich" stories that end well, there's likely five to ten where the borrower loses almost everything. I also know quite a few of these too, btw. For the most part, however, you tend not to hear about these stories as much. No fun to listen to, or tell.

I think there are certain situations where it makes a lot of sense to go into debt or use margin/leverage. There was a T.I. article about it, which I found interesting.

Also, if one is in the top 0.1% or so in terms of asset net worth, and has descendants to whom one wishes to pass these assets, it may make sense in the current low/negative real interest rate environment to simply accumulate good assets and never sell, and simply borrow even more fiat money (using the assets as collateral) for living expenses, etc. That way you avoid realized capital gains tax, etc., which seems destined to increase under the current administration. Then your descendants do the same thing, etc., just keep the assets, and almost never sell, just perpetually borrowing against those assets. The assets take advantage of the asset price inflation trend, and the heirs take advantage of the low interest trend.

Generally, asset price inflation benefits the rich, while consumer price inflation hurts the poor. And so forth. Damn, it's really a rigged game against the little guy, when you think about it.

[AstuteShift]

What’s interesting is how Zillow the stock is getting butchered

Goes below 90 then 2020 highs likely. Would be a great buy imho

[Triplethought]

What’s interesting is how Zillow the stock is getting butchered

Goes below 90 then 2020 highs likely. Would be a great buy imho

Unfortunately zillow is one of my picks that i have been butchered on this year. I made the mistake of listening to a friend who told me that Zillow was his best stock last year. that should have been my warning NOT to buy it while it was so inflated. As it is every time it goes down I buy a little bit more. I've chased this bastard all year trying to catch the falling knife. I really need it to go back up and just this last week it has started to. I have one lot that is in the green now and a bunch of lots that are not.

[jlhooter]

What’s interesting is how Zillow the stock is getting butchered

Goes below 90 then 2020 highs likely. Would be a great buy imho

Unfortunately zillow is one of my picks that i have been butchered on this year. I made the mistake of listening to a friend who told me that Zillow was his best stock last year. that should have been my warning NOT to buy it while it was so inflated. As it is every time it goes down I buy a little bit more. I've chased this bastard all year trying to catch the falling knife. I really need it to go back up and just this last week it has started to. I have one lot that is in the green now and a bunch of lots that are not.

TT,
It is amazing how much contrarian information is out there
I have Z on a watchlist for $85 before I look at it again. I am very afraid of new stocks (new IPOs). Many that I have viewed go through this hype stage (rise up quickly) then die off around the same speed. IMO it is a long-term play.

[SOL]

TT,
It is amazing how much contrarian information is out there
I have Z on a watchlist for $85 before I look at it again. I am very afraid of new stocks (new IPOs). Many that I have viewed go through this hype stage (rise up quickly) then die off around the same speed. IMO it is a long-term play.

It is amazing that so many individuals don't notice not only how much contrarian info is out but how easily available it is. You should view your friends, relatives and anyone you run into as potential data sources. Hell, we have several people here that make for perfect contrarian indicators

[AstuteShift]

TT,
It is amazing how much contrarian information is out there
I have Z on a watchlist for $85 before I look at it again. I am very afraid of new stocks (new IPOs). Many that I have viewed go through this hype stage (rise up quickly) then die off around the same speed. IMO it is a long-term play.

It is amazing that so many individuals don't notice not only how much contrarian info is out but how easily available it is. You should view your friends, relatives and anyone you run into as potential data sources. Hell, we have several people here that make for perfect contrarian indicators

As my old friend would say “you’re one cheeky human”

[SOL]

As my old friend would say “you’re one cheeky human”

Nature favours the fittest and savages the weak of mind lol. If the data is available use it or lose it. I view everything and everyone as a data point, including myself. Adapt or you know what follows

As for Zillow, many people thought it was a good investment when it was soaring but it was not, the best time to buy is when others are nervous. Look at the chart below

[AstuteShift]

As my old friend would say “you’re one cheeky human”

Nature favours the fittest and savages the weak of mind lol. If the data is available use it or lose it. I view everything and everyone as a data point, including myself. Adapt or you know what follows

As for Zillow, many people thought it was a good investment when it was soaring but it was not, the best time to buy is when others are nervous. Look at the chart below

Indeed, nature can teach us provided we have no filters. Clarity over confidence

My monthly indicators can’t draw data but despite that, my thinking was close enough

[jlhooter]

As my old friend would say “you’re one cheeky human”

Nature favours the fittest and savages the weak of mind lol. If the data is available use it or lose it. I view everything and everyone as a data point, including myself. Adapt or you know what follows

As for Zillow, many people thought it was a good investment when it was soaring but it was not, the best time to buy is when others are nervous. Look at the chart below

Sol, as I look at how your 'defined' a proposed entry, did you draw this line because of an upper resistance prior to end of 2020 at around $70?