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outsource and real estate

 
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hi:
IT or high tech or manufacturing or business in general, is outsourcing. for example, in sf bay area, it has been in recession for a couple of years, with no sign of recovery. but the real estate keeps growing.
recently, i was told that a single home in silicon valley has been doubled its value since 97,98. the lowest price for a single home is $400 k in sv right now.
I was in san jose a couple of years back, i know how a $200 k single home look like. ~1,000 sf, 2 bath, 3 bed, no basement, old, dirty, bad neighborhood...
so what is going on? is there a limit for the growth? will real estate be the biggest crash ever?
[ February 04, 2004: Message edited by: John Steve ]
 
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Hi,
When you have green bag on your back and Uncle Sam wants a share of that, what are your obvious choices? You know that the tech stocks are worthed as cardiac arrest moment that leaves you the tendency of investing in real estate.
As long as people think that area will churn out another miracle, the real estate market will continue to rise.
Another factor is the interest rate is so low comparing to the WWII era, there are a lot of people could afford the houses. But sellers hesitate to sell because a lot of them are not enterpreneur materials, they will swindle all of their money if it is materialized.
Regards,
MCao
 
John Stern
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Originally posted by Matt Cao:
Hi,
When you have green bag on your back and Uncle Sam wants a share of that, what are your obvious choices? You know that the tech stocks are worthed as cardiac arrest moment that leaves you the tendency of investing in real estate.
As long as people think that area will churn out another miracle, the real estate market will continue to rise.


people invest to resist inflation. what cause inflation? everyday food? cloth? car? the biggest factor is home. so people invest in home to resist inflation, when people rush to buy home, home price rise, when home price rise, it causes inflation. then more people invest in home, cause more inflation......


Another factor is the interest rate is so low comparing to the WWII era, there are a lot of people could afford the houses. But sellers hesitate to sell because a lot of them are not enterpreneur materials, they will swindle all of their money if it is materialized.
Regards,
MCao


interest is very low right now, lowest in 20 years. but a $400k 30 years mortgage will still cost $3,000+ per month, plus food and other expense, your monthly expense will be $4,000+. that is after tax money. so how much you have to make then? (interest toward loan is tax exampt, but you can only get it back once a year.)
if there is so much outsourcing, so many people lost jobs, who are buying home?
 
Matt Cao
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Originally posted by John Steve:

if there is so much outsourcing, so many people lost jobs, who are buying home?


Hi,
Your math is great. Have you tried to put your on the market? Not all the jobs are outsourceable and not the majority of people lost jobs.
I sold mine on Calero south of San Jose within ten days on market and make a handsome double asking price for a holes in foundation. You could guess what's condition of the house.
Regards,
MCao
[ February 05, 2004: Message edited by: Matt Cao ]
 
John Stern
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Originally posted by Matt Cao:

I sold mine on Calero south of San Jose within ten days


calero st in milpitas?
i live there for some time.
 
Matt Cao
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Hi,
Nope. Milpitas is north of San Jose. If the property is in Milpitas, I would see the offer at tripple. But not at Los Altos Hills, you would not make a profit. You should marry to a Chinese and learn how to make gold out of dirt. But not to a dingle-ling, she will depended on you that she could not utilize her innate talent.
Regards,
MCao
 
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Actually, I believe the biggest inflation in the US is the cost of health care, but you can't invest in that!
Interesting, though. I'd been hearing Silicon Valley real estate prices were deflating.
 
John Stern
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Originally posted by Tim Holloway:
I'd been hearing Silicon Valley real estate prices were deflating.


a realtor told me southern cal real estate is very hot right now. maybe because of defense industry there?
 
Matt Cao
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Hi John,
I just said your math is great in previous respond. Defense or no defense, do not make real estate market going down. It may stall at certain level, then up again.
This is investment 101: During unstable time, stick with the basic investment market.
During the old day when dollar value was based on gold, people purchased gold. After WWII, dollar value was so strong, it was performing just fine on credit.
Therefore, people invest in real estate, the next best thing. At once time, people invest in oil, but went white because of Texas events -- I am don't remembered in detail someone like Tim H or Bela B probably remembered it much better.
Regards,
MCao
 
John Stern
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Originally posted by Matt Cao:
Hi John,
I just said your math is great in previous respond. Defense or no defense, do not make real estate market going down. It may stall at certain level, then up again.


my math is good? thanks! i got 2240 in GRE ~10 years ago. (math 800, verbal 640, logic 800).
Rockefeller once said: "Buy land they don’t make it anymore". my realtor also told me real estate never goes down since 50s. but still, when it comes to real estate, it is "location, location, location".
another realtor told me you won't have trouble to find rentor for your property in california. so if you buy one home then rent it out, that is the ideal situation. but if you manage it throught management company, it cost ~8% of renting income.
of course, the better deal is apartment building, if one can afford it. that not only cost you nothing to own it, it bring positive cash flow. but don't expect to become rich overnight. real estate is long term investment. don't just wait for the profit, enjoy the process. life is short, have fun!
 
Matt Cao
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Hi,
That's a spirit.
Real estate is just aside investment, I still have my main incomes. Rockefeller is corrected. Modern day a standard piece of parcel is much more smaller than his era.
Regards,
MCao
 
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