From my X LAPD Motor Cop Brain, I want things that are easily understandable. Before I embark on spending money, I want to make sure that I know the potential risks and benefits.
When it comes to real estate, we see that there are peaks and valleys. Sometimes those valleys cause a multitude of harm for those property owners which own those assets when prices were much higher.
Now, for those particular homeowners, some are going to stay the course, knowing that not all things stay the same.
Such is the case today, we look back to the bottom of the Santa Clarita real estate market, after the fall in 2007, the true bottom was late 2011 and the beginning of 2012.
If a person has a crystal ball, it would have pointed to this period of time and screamed: “Buy, Buy, Buy”… That move would have equaled doubling of the real estate purchased back them at today’s prices.
That’s real estate for you. Real Estate is a great investment “over time”. Some have been able to shrink that “over time” time frame and flip homes getting good returns in just a few months.
Other current investment strategies in the local Santa Clarita real estate and housing markets are the buy, rehab, rent and hold strategy. Allowing the renter to pay the owners mortgage payment. In some cases there will be some extra money and a Santa Clarita rental property will cash flow. However, the more expensive the housing market becomes, the less likely that will be.
As an aside – the rental market is tight also, as is the real estate resale market in the Santa Clarita Valley.
The stock market can be played in a fast and furious method and also approached with a long-term strategy in mind. This is best handled by using an advisor who is an expert in that field. As you’d hire me to be your hired Real Estate professional.
Typically, I see Real Estate versus the Stock Market as dealing with the tangible versus the non-tangible.
Real Estate is something that can be held, used and improved. Overtime giving a better return than when originally purchased. Real Estate can be leveraged to buy other real estates. Real Estate is necessary for people to live within. It’s a solid tangible thing.
The stock market, on the other hand, is not tangible. It’s paper money which stands for something. In some cases, something of value and in other’s something which will increase/lose value.
We have clients who play the stock market. We don’t have any clients who use the same terminology pertaining to the real estate market. I have never heard of anyone “playing” the real estate market.
When the stock market starts going up, you see the “investor” being attracted by that channel. Then you see the result of the gains of the stock market becoming larger and larger. At some point, as with real estate, a bubble forms, and pops.
When it does, as it has before, I see those “investors” of stocks coming to me to re-invest the “saved money” into real estate.
Those who do this often speak of the other tangible assets like gold/silver/platinum as being something they buy real substances of. At a time like this, they don’t go for the paper gold/silver – they want the real deal in their hands, as Real Estate would be.
Watch as the current stock market bounds and flattens. You will start to see the other “real” assets start getting bought and held to protect from any further damage of the stock market bubble bursting.
While no one could predict what happened to the housing world back in late 2006 and early 2007. The signs were there. Lots of money being lent with little to protect it. That included the “lackluster vetting” of those borrowing said money to purchase real estate. The verification was very low to non-existent and with 100% loans, the real estate world was asking for it. No skin in the game, in some people’s minds, equates to no responsibility.
We will keep our eyes on the stock market and the volatility. When you are ready to come back to, or to real estate for the first time. I’ll be here for you when that time comes. I’m Connor MacIvor with REMAX Gateway, serving you with real estate in the greater Los Angeles Cities and within the Santa Clarita Valley where our Santa Clarita real estate offices are headquartered.