It always strikes me as funny how people refuse to learn from the past. Its a different market now, dividends aren't important. There is only so much land, it can't go down for long, it will bounce back and go up.
We marveled at how rich Japan was and then their market crashed.
Our market was different, till it started to crash. So much of our economy has been financed with debt and yet we think its different with us. For the last 25 years the interest rates have decreased. Which means it is cheaper and easier to borrow money and buy stuff. What will happen when it gets tougher to borrow money?
The Japanese real estate market has declined for 14 CONSECUTIVE YEARS! And yet they have the same amount of land they had 14 years ago.
It was reported in the newspaper that in Washington DC 58% of all mortgage loans are interest only/about 38% for MD & VA. These loans will get more expensive as the interest rates go up, which they will. How many people will be able to stay in these houses that they can't pay for? As the interest rates go up less people will be able to qualify for the loans to pay for the house. As these problems mount banks will require more money down, taking less risks.
If your real estate has gone up in value lately it will go down in value. Don't sell and you won't have a loss, just like if you don't sell you won't have a gain. Its all imaginary money until its in your hands or your writing the check.
$350k in 12 months is certainly very gloomy(and highly doubtful), but I hope you put money down and aren't in an interest only loan. I remember one friend having to write a check to sell his place 7 years ago, he was not happy about that.
We marveled at how rich Japan was and then their market crashed.
Our market was different, till it started to crash. So much of our economy has been financed with debt and yet we think its different with us. For the last 25 years the interest rates have decreased. Which means it is cheaper and easier to borrow money and buy stuff. What will happen when it gets tougher to borrow money?
The Japanese real estate market has declined for 14 CONSECUTIVE YEARS! And yet they have the same amount of land they had 14 years ago.
It was reported in the newspaper that in Washington DC 58% of all mortgage loans are interest only/about 38% for MD & VA. These loans will get more expensive as the interest rates go up, which they will. How many people will be able to stay in these houses that they can't pay for? As the interest rates go up less people will be able to qualify for the loans to pay for the house. As these problems mount banks will require more money down, taking less risks.
If your real estate has gone up in value lately it will go down in value. Don't sell and you won't have a loss, just like if you don't sell you won't have a gain. Its all imaginary money until its in your hands or your writing the check.
$350k in 12 months is certainly very gloomy(and highly doubtful), but I hope you put money down and aren't in an interest only loan. I remember one friend having to write a check to sell his place 7 years ago, he was not happy about that.