| Mark Twain took a long-term and somewhat | | | | pieces and oil may only be needed for squeaky door |
| philosophical look not only at life but real estate. | | | | hinges. But people will still need houses, offices, |
| Looking through Mark Twain's eyes, there's a strong | | | | nightclubs, restaurants, and every other kind of roof |
| case for continuing to invest in tight real estate | | | | over their heads. o Bubble market corollary: The |
| markets such as Bay Area real estate. | | | | "bubble" markets are unlikely to lose demand relative |
| Real estate is always a good investment, Mark Twain | | | | to other markets since they are so "in demand" not |
| once said, because "God isn't making it anymore!" | | | | only in the US but around the world. In many |
| With talk of a "bubble" in high-priced real estate | | | | countries around the world, saying you're from the |
| markets such as the Bay Area, New York City, and | | | | US is unfortunately a way to end a conversation. But |
| Boston, it's important to remember that when it | | | | saying you're from San Francisco, Boston, New York, |
| comes to the laws of supply and demand, no other | | | | Miami, or Los Angeles will usually only bring a smile |
| investment can quite match real estate. Reasons for | | | | and many interested questions. * Revenue potential. |
| Investing in Bay Area Real Estate & Other "Bubble" | | | | Not all stocks pay dividends, but almost every real |
| Markets | | | | estate investment has the potential to generate a |
| * Intrinsic value from intrinsically short supply. To | | | | regular stream of income. Whether you are buying |
| paraphrase Mark Twain, not only is there not going | | | | investment property from afar, or just renting out a |
| to be any more supply in the real estate market. | | | | spare bedroom, the money you make on rent may |
| There is going to be plenty more demand: millions of | | | | provide a cushion against any drop in values. o |
| babies born into the world each year who will | | | | "Bubble market" corollary: high-cost areas also have |
| probably be willing to pay for a roof over their head | | | | the highest average rents. |
| at night-and while they're at work, eating at a | | | | In closing, sure-fire investments are in even shorter |
| restaurant, or doing anything else. o Bubble market | | | | supply than real estate-in fact, there aren't any. Any |
| corollary: Not only is the supply of real estate in | | | | investment will inevitably go down, sometimes |
| terms of acreage not going anywhere; developers | | | | momentarily, sometimes for longer stretches. |
| are increasingly unable to create more real estate (in | | | | However, keeping in mind the relative risks of |
| the form of bigger buildings or more buildings on | | | | investing in real estate versus other investments, real |
| existing lots) in tightly-packed and tightly-regulated | | | | estate investments are still attractive for long-term |
| markets such as Bay Area real estate. * Relatively | | | | investors who appreciate the intrinsic benefits of |
| stable investment potential. Real estate sometimes | | | | investing in real estate, even in pricey markets. |
| loses value, but never completely, even in the worst | | | | Important disclaimer: the above article is provided for |
| case. If Mark Twain had filled a time capsule with | | | | your reading pleasure only and is not intended to |
| twenty shares of cable-car stock and twenty deeds | | | | provide investment advice. All examples are |
| to San Francisco houses, which would be worth more | | | | hypothetical and intended as illustrations, not |
| today? Twenty, thirty, and a hundred years from | | | | guidelines. Opinions expressed in this article are not |
| now, personal computers may become museum | | | | necessarily those of the owners. |