"everybody that I know (including people in Canada) that are heavily into real estate are trying to unload."
That would seem to me to be the textbook definition of "the right time to buy".
I still have two properties there that are pretty much unsellable
By unsellable you mean "priced too high"?
Just remember that somewhere down there is the perfect time to do the opposite of everyone else and make a killing. I wouldn't run out and invest 100% of your assets in real estate because you think you've found the magic moment, but in a diversified investment strategy, don't ignore it altogether.
A falling market is not the textbook definition of the right time to buy, it is the right time to hold off on buying.
No, I literally mean unsellable because the market in that area has dried up. I know the difference between 'priced too high' and 'unsellable'. It doesn't bother me much because I'm well-off enough that I don't actually need to sell, if the right buyer comes along it will move, until then it is no skin of my back.
Keep in mind that you are giving somebody else advice on what to do with their money here, if you want to spend your own cash on real estate then of course you are free to do so. Real estate agents are going out of business for the first time in years, these are not normal market conditions.
GM, Ford and Chrysler stock is down too, that does not mean you have to go out and rush to buy in because it is sure to rise again.
This recession thingy could be long, it could be short. Right now most of the smart money says it's going to be fairly long, and that we probably have not reached the bottom yet.
Anybody that claims otherwise is probably trying to sell you some stock they bought or a property they need to get rid of.
When there has been a good solid month or two without any mass lay-offs, talk of rescue packages and major businesses folding that would be a good time to start thinking about this, right now it is much too early.
Those who try to get in at the bottom invariably find that it wasn't the bottom yet. You could easily lose your shirt with an investment strategy like that.
Those who try to get in at the bottom invariably find that it wasn't the bottom yet.
Well, there is a different school of thought too:
Those who wait for the bottom to be hit will never be able to realize when it was hit. It's fairly easy to tell whether the market is in a downward spiral or is in boom. But I don't think anyone can ever tell if we have hit bottom unless we are already bouncing back. Same goes with the peak, you can't pinpoint it until we find ourselves in downward cycle.
>But I don't think anyone can ever tell if we have hit bottom unless we are already bouncing back.
Even then you can't tell, because it might just be a temporary thing on the way down. Look at the three or so fools' rallies in the Japanese stock market in the last decade or so, for example.
I am taking my own advice as to real estate with my own money. Buying land right now seems a good thing to do. GM stock not so much. GM could disappear tomorrow. The land will still be there even if it reduces in value even further.
I am not advocating any type of loan or leverage to "get into real estate". I just think that if you're looking to park any large amount of money, you shouldn't ignore outright owned real estate (especially the income generating variety) as part of the diversification strategy just because of the recent panic surrounding this one area.
Around here "unsellable" real estate actually means "real estate that can't be sold for enough to pay off the mortgage debt from the previously inflated prices." I've made several rational offers that were turned down for this reason. I've even heard that term tossed around by the very agent that refused my offer. "We just can't seem to sell anything these days, no one is buying! This stuff is just unsellable."
The people who lose the most shirts buy at the top when everything seems roses and sell at the bottom because "its not a good time to be in the market right now".
So, kudos to you, I hope that works well for you! :)
As for parking a large amount of money safely, that's a tough job and nothing to advise other people on unless you are aware of the risks and the potential fall-out from giving such advice.
I didn't realize that there was a different connotation to 'unsellable', apologies for that. The properties I was referring to were bought with cash, no bank involved so I'm not worried in the least. One is being lived in by an elderly couple, as long as they're alive they'll have shelter, it's a huge improvement from where they came from and even if the market was good I wouldn't sell it just because of that.
The other is technically 'up for sale', but with the market being in the dumps it hardly matters, just pay the property tax and stay put. It was bought to be lived in, not as a speculative object, and through circumstances I now find myself on the other end of the globe. Oh well :)
I agree with you that those who bought on speculation at the top of the market are the ones that will be hit hardest, in stock market terms, they're the sheep or the pigs (the joke goes something like this: There are three kinds of people active in the stockmarket, bears, they hope things will get worse, bulls, who hope things get better and pigs, they get slaughtered).
If you have a long term strategy and you have money that is completely unencumbered then it is possible to buy in a falling market, as you already mentioned there is intrinsic value in land. Even so, investing right now is basically saying that you know better than everybody else, and while I applaud you for doing it yourself I don't think you should tell people to follow you down that road unless you have a fairly solid guarantee that it will work out for them.
The OP will be in the possession of anywhere from 1M to 1.3M after taxes, if he just pays off his mortgage or buys a house to live in and very carefully salts away the rest he/she will be able to spend a small fraction of that when the market hits bottom, and then it will still be multiple years before it will pay out, if nothing unforeseen happens in the meantime.
I suspect parent meant "priced too high" which you are just thinking of as "market dried up". Here's an example: I'll give you, sight unseen, $1 for each of them (US or CA, your choice).
You don't want to take it? Of course not, because the price you want for it (your ask) is higher than my bid, and my bid is probably not even the best bid (someone who has seen it will almost certainly offer you $2).
"market dried up" is a shorthand for "the inside bid is fairly low", which is basically what noonespecial said and you disagreed with.
That would seem to me to be the textbook definition of "the right time to buy".
I still have two properties there that are pretty much unsellable
By unsellable you mean "priced too high"?
Just remember that somewhere down there is the perfect time to do the opposite of everyone else and make a killing. I wouldn't run out and invest 100% of your assets in real estate because you think you've found the magic moment, but in a diversified investment strategy, don't ignore it altogether.