There is a lot of fear about the real estate industry. Media
reports suggest that the real estate industry is a bubble that
is about to burst. But how true is this? Below are two facts
that suggest there is no real estate bubble.
Fact No. 1
The real estate economy is local, not global
Unlike the stock market, which is based on the national and
world economy, the real estate market is very much a
locally-based economy. What does this mean? This means that
while the stock market is influenced by economic rise and fall
of industry all over the nation, the real estate market is not.
Real estate prices in California may not influence prices in New
York, and that's that. In real estate, a broad analysis of what
is happening around the nation does not always reflect what is
happening in your home town.
Fact No. 2
When there's a demand, there's a supply
As long as there's a demand there's a supply. Real estate is
about real people who need homes, and people will always be
buying homes, because people need to live somewhere. If you look
to the future, you'll see that there's an ever increasing demand
for real estate. Take, for example, the fact that millions of
migrants are arriving in the United States each year. This
movement translates into a need for real estate. Moreover, it's
also much easier to get a home loan these days, which means that
people will be buying homes. People also get married much later,
which means that they'll probably be buying a home while still
single.
Home buying is a concrete need, unlike the stock market, which
is less concrete. In the stock market, buying and selling
happens at the snap of a finger. In real estate, economic
activity is less volatile. The industry is inherently more
stable.
The real estate market will rise and fall, but in general real
estate prices rise in the long term. So, if you are investing,
simply hold onto your purchase for the long term, and you'll see
that this is no bursting bubble.
About the author:
Dylan Miles, journalist, and publisher, is the owner and
co-editor of
http://www.realestateboom.info on which you will
find more a detailed version of this article.
