I think it will work because for two things many people do not realize. I do. First, the US Dollar continue depreciate. Many asked me is it expensive to buy a 2br 2ba condo at Edison expensive? I said no. Why? back in 90's when a 2br 2ba condo cost $80,000, the gas price was about 80 cents per gallon, now it was selling $275k, and the gas price is about $2.75 per gallon. So, it is equally using 100,000 gallon gas to trade a 2br 2ba condo.
If you do not like to use gas price, you can use gold price, or egg price or many other price. So, US dollar depreciated, so if you keep your $275,000 cash money in CD's, (hey! some savvy investor will borrow it out to buy condos), when gas price went up to $3.50, your money can no longer buy 100,000 gallan of gas.
If you do not believe US dollar will depreciate, watch this youtube clip http://www.youtube.com/watch?v=4n3g5lUgkWk&feature=related
to see if you can provide "any counter evidence" to say US Dollar is going to appreciate in the next 2-3 years???
There is one hope I saw is that if Hillery Clinton became the US President since her husband Bill Clinton President was one of the greatest president in the US history, one thing he did was "strong dollars" that is to say, $1 should be able to buy a carton of orange juice, NOT $3.99. Believe or not, we were forced out of orange juice market, we do not buy orange juice any more ...
"Strong Dollars" will make US dollar more value that everthing, of course, will include the condo or house since they were a collective of windows, floors, woods, ... just everything include wages.
However, with huge trade deficit and budget deficit American votes may tend to choose Obama who definitely inject huge amount of dollars and programs to help "poor peple" and "poor families". In general, it is a good heart, but in reality, the consequence is another real estate price hike since US dollars may be even weaker.
Using the analog of 100,000 gallon of gas to trade a 2br 2ba condo at Edison Hollow South http://raspberryct.blogspot.com/
when the dollars getting weaker, and gas price shoot up to $3.50 per gallon, I think 2br 2ba condo would have to sell for $350,000. Now, you see why EHS currently sold out.
This is not only at EHS, Edison Manor next door also sold out. so is Universty Heights...etc.
So you see I am actively looking to buy bigger home for the same reason. I am getting more and more sure that "strong dollar" may be of the past if Hillery Clinton finally lose to Obama.
And keep in mind, when weak dollars continue, your cash in CD's will be loan at something like 1% even lower than after 911. I have found many of my accounts now has only 0.25% of interest, and my friend Danny just bought another one condo in cash in Edison. His father would not let him buy stocks, and CD's gave him so little, in fact, he got 5 condos now and continue to buy. He was even elected as Board member of the condo assn.
Another one Teck bought 3 condos from Maple Woods http://maplewoodsatpiscataway.blogspot.com/
I have been actively shopping to buy big homes, and keep everything ready, as soon as Obama won the primary, I will take some action. If Hillery Clinton wins, then I will adjust. Either way, everyone who made some good capital gain for past year, should sell their home to realize the ZERO tax for owner occupied homes and move up to bigger home with collapsed mortgage.
Why? after Democratic took over the President office, that President Bush's tax law may be disappeared. Hey! Obama want to use your capital gain to fund homeless project, which is great for poor families, but if you very hesitate to even give $1 to help homeless people you see on Manhattan Street, why would you be willing to give out hundred of thousands of your home capital gain?
So, Obama, or democratic in general will take your money by changing the law ... So, yes, there shall be a time when real estate may have another jump. I am not trying to scare you...
And, at that time, you shall find your $275k jump to say $350k and you shall NOT want to sell because your investment gain will be TAXED heavily by Obama, and you may as well keep in and collecting high rent. Yes, why do you think rent will not hike like gas, milk, egg, ...etc?
Sandeep called panically last summer saying his Avelon apt at Newport jump $300 on 1br apt rent, so he rush to come to Piscataway to buy a 2br at The Commons at $300k http://thecommonsatpiscataway.blogspot.com/
because he could not go month by month that will increse $500 a month !!! at that time many condo comples in the Edison area sold out ...