03 December 2006

Here It Comes?

Well, maybe. Maybe not. I wish I knew.

Several months back we discussed the insecure economy and market, and talked about buying Gold as a hedge..... just in case.

Now this, from Tennis.com:
Andre Agassi and Steffi Graf just sold their home in the San Francisco area for $20 million.
This is the second highest sale price for a home in their county, yet it's bad news. How can this be?
The highest price paid for a home in their county was $23 million, when they bought this same home a few years back.
So much for Real Estate bein' a "sure thing"!

A personal story:
In 2000, I bought a piece of property in a prime location.
If..... IF I had been smart enough to sell it last year during a window that opened for about 6 months, I could have sold it for four times what I paid.
Now I'm not sure I'd even get a nibble if I put it on the market.
Buyers are taking a "let's wait and see" attitude, watching to see if there is a bottom in sight.

I'm hearing rumblings about A.R.M.'s and "interest only" loans.
Some so-called "experts" are taking on the Chicken Little role, announcing the sky is gonna fall. I have no crystal ball, but I'll repeat the mantra I live by:
"Hope for the best, prepare for the worst."
So, be prepared.
For several reasons, gold still looks like a secure buy.

1 comment:

Anonymous said...

The Real Estate market still is
over valued. With cheap money flowing into this country buying our iou's allowed real estate to
inflate beyond the normal growth rate. The average doubling of price took 12 to 15 years. With speculation, easy credit & money the demand for housing increased.
The flip side is now the real estate is highly leveraged. The war in Iraq is helping balloon our
defict. The supply of dollars is flooding the world (ie interest payments to Japan & China, billions of dollars being spent in Iraq, billions daily flowing to mid east oil countries) with all of this supply of dollars will lead to devaluation of the currency. When the foreign lenders decide they want a higher interest or stop buying our iou's the economy will up for a major re-alignment. The current policy for the dollar is the government says it for a strong dollar however it is letting its value decline. As the dollar declines gold will rise. It wouldn't suprise me to see the value of the dollar decline against world currencies as much as real estate values went up between 2000-06. Value is like
water it seeks its own level.