Real Estate Markets

Cheapskate Wisdom from … an Economist Specializing in Real Estate

By Brad Tuttle | @bradrtuttle | August 23, 2010 | +

“There is no iron law that real estate must appreciate.”

The quote is in a NY Times’ piece about how homeownership is no longer a means to get rich. The full quote:

“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

Related Topics: cheapskate wisdom, recession porn, Zillow, Investing, Real Estate & Homes, Real Estate Markets

  • Latest on Moneyland

    fotog / Getty Images
    Saving May 31, 2012

    As Gas Prices Go, So Go Prices for Used Cars

    What do prices at the pump have to do with prices at the used car lot? They actually tend to mimic each other. Higher gas prices tend to cause drivers to want to spend less out of pocket on their automobiles. That means rising demand, as well as rising prices, for used cars—fuel-efficient used cars especially. Used car prices spiked last summer as gas prices soared, and then spiked again earlier this year as the national average neared $4 a gallon. Now that gas prices are retreating, relief is also in sight for consumers in the market for used cars.

    From our Partners

    4 Easy Ways for Young Adults to Get a Handle on Their Credit ScoresDaily Finance

    Jing Wei / Imaginechina via AP Images
    Odd Spending May 31, 2012

    What’s the Point of High-Powered ‘Green’ Sports Cars?

    The best argument for going green is that it’ll help conserve natural resources and money at the same time. The new breed of “green” supercars led by Ferrari and Porsche doesn’t really do either.

  • http://allbummedout.wordpress.com allbummedout

    If suddenly flawless diamonds went out of vogue, and could be bought dirt cheap on eBay or anywhere else, who am I to look a gift horse in the mouth? I would simply start hoarding diamonds.

    Though real estate is a horse of a different color, it’s falls under the rubric of diamonds in that real estate is a finite resource. On this tiny speck of dust we call Earth, a large percentage of land is underwater. That’s what we call “sub-prime” real estate. ;) The land above water that tends to remain above water (i.e. major real estate in Pakistan had a troubling way of submerging) is the tip of an iceberg that only begins to define what we call “prime” real estate!

    Then we hear these cliche words: “Location, location, location”; and some think Beverly Hills vs. the Bronx. It’s not so black and white (no pun intended)! Perhaps the old saying should be updated to “proximity, proximity, proximity.” Now we think prime suburbs on land mass that historically never floods, in proximity to major cities and infrastructure (think of the prime real estate suburbs of upstate New York, northern California, and other really desirable areas with a finite number of square miles that the local eco-system can support).

    That’s right… we never consider that a local eco-system can support a finite number of housing units without being destroyed! The San Francisco Bay Area is a case in point; the bay would turn into a cesspool if housing starts were not strictly controlled.

    Six billion people and maybe 1 out of 1,000 has a piece of “prime” real estate (Bangladesh vs. Orange County, CA; rural Pakistan vs. Scottsdale, AZ; you can each think of other relevant examples). Look at England’s polarized real estate market as a shadow casted from future real estate markets from Europe to North America.

    Is owning “prime” real estate on planet Earth more precious than owning flawless diamonds? You do the math. (Hint: More undervalued prime real estate for you and I to choose from, since we can even do basic algebra! Or in the land of the blind, the one eyed man is king!)

blog comments powered by Disqus