🚀 go-pugleaf

In article <coon3vso9jmj9v486p1hdo536ffdrjn9di@4ax.com>, Scott in Aztlan 
wrote in part:
>On Sat, 1 Feb 2003 06:21:41 +0000 (UTC), don@manx.misty.com (Don
>Klipstein) wrote:
>>  Real estate will not spend decades on end giving double-digit annual 
>>rate of return.  
>
>BTW, I agree with you - these balls-out rates of appreciation have to
>level off sometime; there may even be a "correction" like ther was in
>the early 90s. However, the amount of coastal land is finite, and
>every day it gets closer to being completely built out. Meanwhile, the
>population continues to grow. Demand will exceed supply for the
>forseeable future, which doesn't exactly suggest a collapse in housing
>prices...

  If coastal California housing prices spend enough years outperforming
global average wealth of coastal property owners, then coastal California 
will run into competition.

  My argument was in comparison of real estate to stock market index 
mutual funds.  Those include reinvestment of dividends and capital gains 
distributions into buying more shares of USA publicly traded corporations.
Long-term trend of that will be (at best) gains in USA GDP plus the 
recirpocal of whatever appropriately weighted average PE ratio of these 
shares.  That seems close to 10% annual rate of return averaged since the 
Industrial Revolution.
  Compare to real estate - despite good prospects of price appreciation 
outperforming that of other commodities, to what extent can this 
outperform wages of those who have to buy or rent it?  Can be positive 
due to demand increasing with supply constant, but how can that 
outperform the per-capita growth of the economy with the population 
growing?  With the population always experiencing new expenses such as new 
healthcare, communication and maybe transportation needs that will newly 
and additionally consume per-capita "product/production" at least as fast 
as innovation inceases ability of workers to produce?
  Compare again to a "USA total stock market index fund", which invests 
profits of USA corporations to a significant extent into themselves or 
each other for compounded gain.

  I repeat my thoughts:  If your living space needs (and needs for 
independence from landlords) are low enough, then rent a small apartment
rather than buy a house.  Invest savings available from renting rather 
than buying into stock s or stock mutual funds (total USA stock market 
funds such as Vanguard "Index Total" or maybe slightly more conservative 
stock mutual funds such as Vanguard "Index 500", "Index Value" or 
competing "S&P 500 index funds" and "equity income funds" with 
competitively low sub-1% "annual expense ratios").

  What I think is bad:  Condos (costs of buying combined with expenses of 
professional maintenance, sometimes to often with amateur bid evaluation).
And if you want freedom, do not buy a home that is a condo unit or 
otherwise governed by a "Homeowners Association" ("HOA") ("Hellish Osshole
Agency").  HOA's are, in my words, a "sub-municipal government" with all 
rights of a "sub-Federal Level of Government" (USA wording of mine) and if 
you don't like them you have to survive them, get them outvoted in the 
appropriate election procedures, or move out from them.
  And I hear enough dozens of horror stories about how so many petty 
mean-spitited small-minded busybodies are the ones to run for positions in 
HOA's and then govern whether you can kiss who outdoors within your 
property line (especially gender-specific), what brand/grade/color of 
paint to paint doors, fences, house-exterior with and with mandated 
minimum frequency thereof, rules for satellite dishes and other reception 
antennas that become federal cases where battles occur, and the like!  It 
seems to me that many HOA's are worse than most landlords!

  A minor good side - there is some case law precedent limiting 
governmental powers granted to or assumed by HOA's that act as some level 
of government to not being allowed to do/have what more officially 
defined/recognized levels of government are not allowed to do/have.
BUT PLEASE VOTE IN EVERY ELECTION and PLEASE *run for office* if only 
tyour enemies do so!

 - Don Klipstein (don@misty.com, klipstei@netaxs.com)