If your portfolio isn't looking so good, maybe it's time to consider investing in Greenwich real estate.
Today's turmoil has clouded our memory about how well the long term ROI on residential real estate has been for American families. Even with the current economic downturn, we've enjoyed an impressive track record over the past 30+ years or more. Those buyers who purchased since 2005 may be disappointed that they can't expect the same continuation of rapid increases in home prices, and some may experience a decline in their home's value.
This highlights the normal cycles in any market. Timing when to buy or sell in the housing market is very tricky. Many potential homebuyers today say that "I'm waiting for home price to bottom out before I buy." But if you take a long term view, you'll see that buying a home at its absolute lowest possible price isn't realistic or even IMPORTANT. Of course, none of us is wise enough to know when housing prices will completely bottom out, and waiting on the fence can be costly, especially if you lose the house you love. Remember, a home is not a commodity, it's where you live your life, have a family and build memories---it's where you'll take those birthday party photos that you'll treasure for a lifetime!
So buyers are best advised to take a long-term view of homeownership. Remember, housing has been a sound way to build long-term wealth even without the explosive increase in home prices we saw between 2000 and 2006. Homeowners are getting something in return for their monthly mortgage that renters never get: increased home equity. Assuming that the homebuyer is able to ride out the down cycles---that is, doesn't have to sell the proeprty after housing prices have fallen ---then that bargain gets better over time. Rents normally rise over time while principal and interest payments on a fixed rate mortgage stay constant. And that's before adding in the tax advantage of homeownership, including mortgage interst deducitibility and exclusions from capital gains taxes.