As I sit here on a friendâ€™s sun deck in Rancho Palos Verdes overlooking a foggy Pacific Ocean and the outline of Catalina, I realize that despite the chaos on Wall Street, the Euro Zone and the now empty halls of the Capitol, that there are certain truisms that we all live with: the sun rises in the east and sets in the west, we all die, and most pay taxes; the Cubs will probably never win a World Series and real estate is the only investment you can live in; and no, I donâ€™t consider buying a vintage Airstream an investment â€“ though some might argue the point.Â I guess thatâ€™s why itâ€™s called â€œreal estateâ€, itâ€™s real, as opposed to imaginary and itâ€™s an estate; after all, a home is a manâ€™s castle even if itâ€™s a 500 square foot studio on the lower east side.
There are just so many things to like about real estate.Â Thereâ€™s the fact that you get to live there, which if youâ€™ve followed the adage of location, location, location, you like where you live and it sure beats the heck out of living on the street, right?Â Thereâ€™s the whole architectural beauty of a home: the roof line, the shutters, arched doors, walls of glassâ€¦ then thereâ€™s the materials: plaster, hardwoods, decorative tile, stone; as diverse and varied as the outside world itself.Â Iâ€™m always impressed when form and function meet; a great floorplan for example can make each day just a little easier, even if itâ€™s a 1970â€²s cracker box tract home â€“ a great floorplan is a great floorplan.
Yesterday you could lock in a 30 fixed rate mortgage at under 4%.Â When you consider that real inflation is running at somewhere near 3.5%, you can argue that essentially borrowing is free.Â I know everyone is focused on debt right now, but maybe aside from college and life saving procedures, is there anything better to borrow for than a home?Â Borrow to buy a place to live? heck yeah!Â â€¦a place to raise a family, a place to build memories.Â â€œBut Tim home prices are dropping, why would I buy now and not wait until later?Â Why take the risk?â€Â Let me thinkâ€¦ free money, a roof over my head; a place that if I paint it, I know Iâ€™m doing it because itâ€™s mineâ€¦ free moneyâ€¦
Itâ€™s a funny thing about real estate; you only lose money if you sell for less than you paid.Â If you are not selling, you canâ€™t lose any money.Â Perhaps the one thing the government should have done and maybe still can, is to help compel banks to refinance borrowers who are underwater, owing more on their home than itâ€™s currently, (note the word currently), is worth.Â Last time I checked, we hadnâ€™t figured out how to create more landâ€¦ I suppose there are manmade islands, but you get the idea.Â Land is finite.Â Of course land is not liquid like gold, but last time I checked, gold wonâ€™t keep you dry or warm or safe, unless you use it, and then you donâ€™t have it any more.
So with all the gyrations of the past month, I guess my point is, if you have to put your money somewhere, you might as well buy real estate.Â Itâ€™s more affordable than ever and you get to live in it and that sounds pretty good to me.