Old 10-20-06, 05:36 PM
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jschen
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Originally Posted by BigSean
Its also history that election years (pres) inteerest rates fall. So I wouold guess spring of 2008 the market will light back up, if not sooner.
While there may be a historical correlation, I sure wouldn't bet on the market lighting back up by then! Over very long periods of time, housing costs cannot grow faster than wage growth. (If it so much as outpaced wage growth by 1% per year, every 70 years, we would be collectively spending twice as much of our income on housing.) History shows real estate to be full of big booms, big lulls, and occasionally, big busts. The recent trend is not an aberration, but neither is it the norm.

Buy what you need when you need, but realize that one's primary residence makes a relatively poor investment vehicle. Not just because of less than stellar returns over the long run, but also because one cannot readily disentangle housing considerations from investment considerations. A house-rich portfolio is not very liquid, and it is subject to risks of catastrophic events that cannot be adequately protected against through diversification.
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