And You Were Worried About Risk In Real Estate? (Arrrrrrrr….)
First, happy Talk Like a Pirate Day. Uh…maties.
It was only last weekend that I told a friend of mine about my ill-fated attempt to buy an investment property/vacation camp in the Adirondacks, and she replied, “Just keep your money in investments — then you’ll have more when the next one comes along.” She’s right about the “next one,” but if I were in a position to do it, I would move every cent I had into real estate. My retirement portfolio lost 12.4% this year, and we’ll see what it looks like in a week.
I hate the stock market — I hate the very idea of it. The price of a stock has nothing — nothing! — whatsoever to do with the actual value of a company. How many stock market crashes can you have during an 8-year period before you admit you’re just gambling, and that the house cheats?
Funny thing, though — any house on the market is still worth exactly 1 place to live and 1 place to keep your junk. If it’s a nice house, a house you like, maybe a place with the intangible qualities of both “my” and “home” attached to it, then it is worth significantly more.
Which is why Real Estate is where everyone ran to after 2001-2002. People need to put money somewhere, and Real Estate was the place to do it — this is another factor that fed the mythic bubble, changing the faces of entire rural communities in Upstate New York (for instance), encouraging the gamblers to look north of Wall Street for a place to sit and safely tremble before the TV screen. Now, people who could buy are wary of a market that, well, has to bottom out somewhere. And, yeah, we’re all kind of worried about how bad it can get. But real estate is REAL — it isn’t some crazy made-up social contract like the stock market or currency. It isn’t a piggy bank — equity stripping got a lot of people into the mess they’re in — but you can touch it and stand on it and use it while you bet that there will be more people every year who need places to live.
So, for those of you holding a bunch of worthless paper (I’m not even going to look at my 403b statements until after the election — I worked really hard for that money….), or feeling good about not owning any stock (even owning American dollars is that much better right now) — consider going to some open houses this weekend. Kick some metaphorical tires, and think about what an investment does for you, vs. what a home — or a second home — can do for you.
9 Beach Street
Beverly, MA 01915
Beds: 3/Baths: 2.5
SQ.FT.: 2080
$650,000
Open House: Sunday, September 21, 2008 1:00 PM – 3:00 PM
94 McKay Street
Beverly, MA 01915
Beds:3 /Baths: 1
SQ.FT.:1590
$288,000
Open House: Sunday, September 21, 2008 12:00 PM – 2:00 PM
7 Fayette Street Address
Beverly, MA 01915
Beds: 4/Baths: 1
SQ.FT.: 2325
$329,000
Open House: Sunday, September 21, 2008 12:00 PM – 2:00 PM
