Is There a Real Estate Bubble?

Unfortunately the question cannot be answered ... or at least not the answer you want to hear:

"The market will crash by 50% on January 22nd 2007 so you have plenty of time to sell everything. It will then take off again on May 1st 2008 and so rent till then."

That is what you'd like me to say...

Alas, no expert ... even a revered one ... can make those kind of predictions.

In my Real Estate Action course I tell my students that if they ask me one more time what the market is going to do, I will hit them with my laptop. Who cares ... if you have your ducks in a row ... You will weather all storms.

Real estate markets are not like stock markets... Someone sells Gold in Hong Kong at night it will affect the gold market in New York. Someone sells real estate in Hong Kong tonite ... no one cares in Vancouver.

Stock markets can crash 50% in 3 weeks. Real Estate markets in BC reversed on average 17% over a three year period (4 times in 25 years ... with the exception of 1980 when we had 22% interest rates).

The real questions are:

1. Are you a shark, a flipper or in investor?

As a shark and flipper ... you are in and out of a market short time. So sell for the profit. As an investor you are there for a long time having a tenant build you your 'passive income' nestegg!

Ah, the joys of passive income!! True wealth is not an asset - it is PASSIVE INCOME.

And if that is your goal ... who cares, whether the market goes up or down in the next ten years?

For 35 years I have listened to people tell me about this and or that stock market crash (1974, 1982, 1987,2002) and listened to this bubble theory (Douglas Casey, Bob Prechter) and that deflation theory (all NA advisors in 2001)... And we came through Asian Flus, Russian and Mexican collapses - worldwide epidemics and 500% interest rates (Sweden) and if you did nothing else, but buy a house ... not very smart just bought a house ... and kept it ... you'd have outperformed ANY other investment on the leverage of you down payment.

Since 2001, I have held 29 Action Courses and the number 1 question was: Is there a bubble, is it over? Since then my students have made in excess of 500 million dollars.

2. If you do not know what you are going to do with the money, keep what you own!

We live in the most under-reported inflation of all times. We keep printing money, paper money will shift into hard assets.

Finally, for the last ten years no one told me they regretting buying their real estate, they only regretted selling it.