What will happen to the US Real Estate? And US dollar? What is the best investment?

Answer 1

Bottom line, US real estate is in a bubble and eventually, all bubbles burst. Current news articles are showing real estate sales slumping. When the tech stock bubble burst in 2000, the Fed (to prevent the economy from contracting) lowered interest rates to 1% and flushed the system with liquidity. Instead of flowing into the stock market, the money flowed into real estate, that's why over the last 5 years, real estate values shot up. The problem is, how high can they go before everyone (except the wealthy) are priced out of housing? "Helicopter" Ben Bernanke raised the overnight rate on June 29th by another 25 basis points. Many are considering the rate hikes over. I don't. Why? The U.S. is running huge budget and trade deficits and the dollar went into freefall because of that couple with such low interest rates. When the fed began raising rates, the dollar stablized. The problem is, the US is still piling on more debt. Couple that with 24 of the 28 major central banks raising rates this year, investors see better odds of investing in currencies from countries that are more stable. In order to balance our trade deficit, the dollar would have to be devalued by 25% - 50%. With such a devaluation, the only way to prevent wholesale selling of dollars and an dollar collapse would be to raise interest rates. Higher rates do not bode well for the U.S. real estate market.

There was an article in Forbes magazine about a gentleman named Tom Barrack. He is considered the best real estate investor EVER!!! His protfolio is valued at over $25 billion. Donald Trump said tha Barrack has an uncanny ability to see future trends. The interesting thing is that Barrack said he was dumping all his U.S. real estate holdings because he saw that things were getting out of hand here and way overvalued.

Answer 2

There is no one "best" investment. The best is a diversified portfolio of stocks, bonds, money markets, and possibly some real estate and precious metals. This will give you a good rate of return, and protect you from failure in any one sector. When one is going down, another is almost certainly going up.

Answer 3

A third of the 50 US States real estate markets are still appreciating at healthy levels.
Seventeen of the nation’s states are still appreciating strongly, including seven states located in the southern portion of the country. The southern states are experiencing the largest migration of new residents in history.
The southeast is bolstered by warmer climates than the northern part of the country, causing an onslaught of new residents as US weather patterns change. Many businesses have moved or are planning on moving to the southeast.
Tennessee, Kentucky, South Carolina, North Carolina, and Alabama are still growing in population with new residents and are maintaining strongly appreciating local real estate markets.
Nashville, Tennessee is the nation’s home of country music, and Nashville has seen a rise in appreciation over the past three years unprecedented in its history. Nashville housing prices are forecast to appreciate nearly another 7% by the end of 2006.
But Memphis will appreciate a whopping 7.7% by year’s end.
South Carolina, however, may have one of the longest lasting and strongest appreciating housing markets in the nation. Many new businesses have been drawn to South Carolina through tax incentives, and many retirees are buying more affordable housing in South Carolina.
The Mississippi and Louisiana housing markets were dealt a severe blow by Hurricane Katrina nearly a year ago. But both states real estate markets have turned into strong buyers markets, where the shortages of housing have fueled a building boom, mainly confined to areas outside of the disaster zones.
The shortage of construction workers in both states, a lack of building supplies, and problems with insurance payoffs have contributed to a rebuilding slowdown.
In the nation’s northern tier of states North Dakota real estate is still appreciating.
Idaho, Montana, Utah and Alaska are also still experiencing positive home appreciation. Alaska hasn’t seen a booming market like it is in Anchorage since the oil pipeline boom days of the 1970's.
Boise, Idaho, selected by numerous publications as one of the best places to live in America, is also continuing to experience a housing market that has been appreciating for more than three years, and doesn’t show any signs of slowing down any time soon.
Utah is another western state that is under going unprecedented growth and appreciation. But of all the states in the nation that have experienced booms and busts in major urban real estate markets that could have slowed down already, Washington is still experiencing appreciation.
Many states real estate markets have slowed after 13 years of low interest rates.

Answer 4

Keep in mind...........

Times and markets are changing!

In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???

This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.

From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!

With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:

Times and markets are changing!

In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???

This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.

From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!

With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!

For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:

http://www.brokerforyou.com/brokerforyou
http://www.downtown-san-diego-real-estate.com/san-diego-real-estate-article-index.htm
http://www.brokerforyou.com
http://www.san-diego-for-sale-by-owner.com
http://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
http://www.brokerforyou.com/blogger/index.html
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://www.poway-real-estate.info
http://www.del-mar-real-estate.info
http://www.la-jolla-real-estate.info
http://www.los-angeles-real-estate-brokers.com
http://www.san-jose-real-estate-brokers.com
http://www.orange-county-real-estate-brokers.com
http://www.san-francisco-real-estate-brokers.com
http://www.sacramento-real-estate-broker.com