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From: spp@ucbvax.BERKELEY.EDU (Stephen P Pope)
Newsgroups: net.invest
Subject: Re: A Question
Message-ID: <12722@ucbvax.BERKELEY.EDU>
Date: Thu, 27-Mar-86 18:19:29 EST
Article-I.D.: ucbvax.12722
Posted: Thu Mar 27 18:19:29 1986
Date-Received: Sat, 29-Mar-86 01:40:17 EST
References: <882@sfmag.UUCP> <20519@styx.UUCP> <1893@hammer.UUCP>
Distribution: net
Organization: University of California at Berkeley
Lines: 33
Keywords: savings, real estate

In article <1893@hammer.UUCP>, patcl@hammer.UUCP (Pat Clancy) writes:
> >
> >The advice I've been hearing lately is that you should try to go ahead
> >and buy the house as soon as you can, as real estate prices tend to
> >rise faster than your ability to purchase. Prices will not get lower,
> >and the mortgage interest rate should be at bottom in the next month
> 
> This is *not* generally true. In Oregon, prices have been dropping
> over the last several years, and I know several people who have lost
> money (in the form of equity) as a result. 

Some "conventional wisdom" on this subject -- which I can't confirm
from personal experience --

Unimproved land, farmland, condominiums, rental units, commercial
property, townhouses, will all fluctuate in value and drop in
value at times.  Detached single family homes very seldom drop in
value -- there are exceptions: bad locations such as a declining 
inner city neighborhood; houses in a "company town" where the company
might go into a slump -- houses in new suburbs which are constantly
getting re-zoned for unlimited development -- and so on.

A safe claim is "well located single-family detached houses hardly
ever decline in value".  I don't know about the situation in 
Oregon though.  Prices have been firm or rising most places I'm
familiar with.

Many people predict that housing cost will continue to form a
higher and higher portion of peoples total expenditures.
If this is true housing prices can continue to rise faster than 
the overall inflation rate, and even rise during deflation.

steve