Friday, December 10, 2004

Will The Bubble Burst?

Earlier this year I had planned to purchase a home, actually two, for purely investment purposes. I had studied the process, the pro's and cons, and happened upon what looked to be a good first time deal. However, as time went on through the process and I learned more and more about what the deal entailed and I crunched the numbers in every possible way a hundred times a day for two months, I realized that everything was balancing very precariously upon the expected appreciation. Real Estate is something that you can pretty much always count on it to appreciate, as long as you are in the right location and especially if you make improvements on the property. I'm too young to remember but my mother reminded me that in the early 90's, housing prices actually fell and alot of people she knew were stuck selling short on their homes just to get out from under them. I decided that the home(s) I was looking at were not sound enough investments for me to risk, after looking more in depth at the locations and crunching the numbers yet again with the thought of housing not actually falling, but staying the same or only rising slightly. I came down to Florida specifically to enter the real estate market, that was a primary goal, and it was such an exciting prospect to finally be getting started, but I felt my decision to cancel the sale was a sound one and I haven't regretted it. I have, however, felt that little jab as others around me are making their profits where I feel that I should have been. I console myself with the fact that I was two years too late and there are plenty of other investments for the time being until I feel that housing has stabilized again, or if I should happen to find a particularly sturdy deal. For instance if I had been purchasing a home to actually live in and for that reason only, I would have approached the whole thing differently, but the only reason for me to be buying a home right now is for the investment value, and so, I will wait.


Blogger Sarah Beth said...

An Update:

Noel Shepard wrote a great article for the OpEd site regarding this matter. Check it out here: Has Greenspan Over-Pumped the Real Estate Bubble?

6:06 PM  

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