Did you read the article in the New York Times last week by Warren Buffett? While the focus was on the stock market, there are clear and obvious parallels with our local real estate market since his article’s focus was on Equity Investment.
Warren’s rule on buying is simple: Be fearful when others are greedy and be greedy when others are fearful. And right now in the Boulder real estate market, most people are fearful! The reality is that over the next 5, 10, and 20 years, there will be a noticeable appreciation of property values.
I can’t predict if home prices will increase or decrease from one month to the next or even 6 months (and beware anybody who says they can!) but I do know that home prices in Boulder County will increase as the economy improves.
Over a long period of time, the real estate market has weathered world wars and other military conflicts, the depression, numerous recessions, stock market panics, and other national periods of crisis and people who have owned their homes have realized profits upon selling their homes.
Warren’s ultimate point is that “Equities will almost certainly outperform cash over the next decade, probably by a substantial degree”.
Real estate is the only equity investment where your money is leveraged and that will be the topic of another posting!
