It appears official that the real-estate bubble in the U.S. has (quietly) burst. As a "mutual funds novice," I have the following question: Does this mean real-estate-based mutual funds will decline in value as well?
Or, perhaps those funds are sufficiently diversified that they won't really see an immediate decline in value? Thanks in advance for your input. PLEASE LIMIT YOUR ANSWERS TO THE US MARKET...
2006-09-02 06:15:25 · 4 answers · asked by nondescript 2 in Business & Finance ➔ Investing
fact is, real estate boom is a result of baby boom acquiring their first (& second to some extent) homes
with most baby boomers looking to downsize to apts & condos over the next few years, there will likely be a glut of real estate (supply) and very little demand
thusly, real estate is not a good investment right now, in any form, including mutuals
move into mutuals that invest in manufacturing, mining/resources, technology (before the bubble grows) and finance (like banks etc.)
2006-09-02 06:25:04 · answer #1 · answered by capollar 4 · 0⤊ 0⤋
If they are NOT invested in residential real estate they may be ok!
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:
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.brokerforyou.com/san-diego-real-estate-sales.html
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
2006-09-04 04:01:53 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It is highly likely you're right. Real estate prices are likely to go down, while interest rates are likely to go up. The net result is, equity in any real estate concern is likely to devalue...
2006-09-02 07:14:15 · answer #3 · answered by NC 7 · 0⤊ 0⤋
My US market thoughts are dont be the last one holding the bag, get out of these funds while they still have vaule. If you have doubt more people are thinking the same.
2006-09-02 07:31:34 · answer #4 · answered by Grandpa Shark 7 · 0⤊ 0⤋