Berkeley CSUA MOTD:Entry 46105
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2025/07/11 [General] UID:1000 Activity:popular
7/11    

2007/3/27-29 [Reference/RealEstate, Finance/Investment] UID:46105 Activity:nil
3/26    BUT....BUT.... BUT REAL ESTATE ALWAYS GOES UP!!!!!
        \_ Yes.  It does.  Over time.  No one with a multi-decade investment
           time line ever lost money on real estate.  If you bought swamp
           _______________________________________/
           \_ The same is true of the stock market.  Read a random walk down
              wall street.  Over any 20 year time span, including one where
              you invest on the eve of the great depression, the stock market
              has averaged at least 20% annual returns after inflation.  Read
              a random walk down wall street. -dans
              \_ 20% after inflation? I think not. Try more like 7%. -ausman
                 \_ mea culpa. -dans
           land, that's your problem.  Land ownership is the traditional
           way to wealth going back to the start of history.  The other way
           is military conquest of the world but I doubt you have a personal
           army.
           \_ Is that true?  I remember a time when Tokyo real estate
              bubbled to truly absurd values.  If you bought at the wrong
              time I think you may have failed to beat inflation over a
              30 year period.
              \_ http://en.wikipedia.org/wiki/Japanese_asset_price_bubble
              \_ Yes, it's true.  If you buy over priced swamp land you're
                 going to get burned.  Doesn't matter if the swamp land is in
                 Florida or Tokyo.  There's always more people, there's always
                 less land.
           \_ I'm pretty sure you've qualified that statement so much that an
              equivelent statement could be made for stocks.  "No one has ever
              lost money in a multi-decade investment in a well diversified
              portfolio."  Is that not true as well?
              \_ Not equivalent--key diff is "diversified".  You could easily
                 lose money in real estate in selected markets, even long term.
           \_ I think that land ownership has been the traditional way to
              store and transfer wealth. The traditional ways to create
              wealth have been trade and military conquest (which is just
              taking someone else's wealth).
              \_ I did mention conquest.  Trade is another way but requires
                 more effort and skill than sitting on land and waiting.
2025/07/11 [General] UID:1000 Activity:popular
7/11    

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en.wikipedia.org/wiki/Japanese_asset_price_bubble
invest in capital resources much more easily than their competitors, which made goods cheaper, which widened the trade surplus further. And, with the yen appreciating, financial assets became very lucrative. The rates for housing, stocks, and bonds rose so much that at one point the government issued 100-year bonds. At the height of the bubble, a commonly-quoted claim was that the land beneath the Imperial Palace in Tokyo was worth more than the entire state of California. By 2004, prime "A" property in Tokyo's financial districts were less than 1/100th of their peak, and Tokyo's residential homes were 1/10th of their peak, but still managed to be listed as the most expensive real estate in the world. Some US$20 trillion (1999 dollars) was wiped out with the combined collapse of the real estate market and the Tokyo stock market. With Japan's economy driven by its high rates of reinvestment, this crash hit particularly hard. Investments were made increasingly out of the country, and Japanese manufacturing firms lost much of their technological edge. The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many "zombie businesses".