Bay Area Worries: DotCom in the past - Real Estate now
It feels like yesterday that we have been through the dot-com burst in bay area. And now, i have similar feeling with real estate in this area. Although i don't think it's going to be as bad as stock market, i definitely think real estate is going to have some tough time in coming months/years.
If you are in serious trouble with investments, getting rid of stock type of investments is a little bit easier than getting rid of investment like a house. So this is going to be a very challenging thing for all the home owners who want to sell their homes.
A lot of people tell me that real estate wouldn't crash like dot-com, but point is that it doesn't have to be a big crash but even a little bit of slow down would cause some serious financial trouble to a lot of people in bay area. There is a lot of optimism in those who invested in real estate, they are so confident that it would never go down. It was exactly like this in 2000 time with those who invested in tech stocks when downturn started for dot-com. Everybody talks about how one of his friend made so-and-so money in very short period.
If something feels too good to be true...most likely it is. That was the feeling i got back then where i was in the middle of the dot-com investment madness, and it was in fact too good to be true. I bought some stocks for rediculous price expecting to get 100% returns so fast, and i ended up losing almost all of it.
Now i feel same exact way for real estate. So i'm going to wait until i feel very comfortable.
While companies are in full swing, the real estate is coming to a stage where it would be put to some serious tests. I guess there will always be something to be worried for all of us in bay area.
Related article in Newyork times at:
"Hoping for Best In Home Sales, 2 Sides Sit Tight"
http://www.nytimes.com/2006/03/04/business/04real.html?_r=1&oref=slogin
If you are in serious trouble with investments, getting rid of stock type of investments is a little bit easier than getting rid of investment like a house. So this is going to be a very challenging thing for all the home owners who want to sell their homes.
A lot of people tell me that real estate wouldn't crash like dot-com, but point is that it doesn't have to be a big crash but even a little bit of slow down would cause some serious financial trouble to a lot of people in bay area. There is a lot of optimism in those who invested in real estate, they are so confident that it would never go down. It was exactly like this in 2000 time with those who invested in tech stocks when downturn started for dot-com. Everybody talks about how one of his friend made so-and-so money in very short period.
If something feels too good to be true...most likely it is. That was the feeling i got back then where i was in the middle of the dot-com investment madness, and it was in fact too good to be true. I bought some stocks for rediculous price expecting to get 100% returns so fast, and i ended up losing almost all of it.
Now i feel same exact way for real estate. So i'm going to wait until i feel very comfortable.
While companies are in full swing, the real estate is coming to a stage where it would be put to some serious tests. I guess there will always be something to be worried for all of us in bay area.
Related article in Newyork times at:
"Hoping for Best In Home Sales, 2 Sides Sit Tight"
http://www.nytimes.com/2006/03/04/business/04real.html?_r=1&oref=slogin
posted by Sathish P at 11:38 AM
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