REAL ESTATE IS BORING: IT JUST GOES UP.

Real estate is boring. Real estate appreciation is mostly predictable. History records there has been unbroken appreciation on the average American single family home year over year since 1929! That is not to say you cannot buy a bad house, in a bad area using an inappropriate loan. A little sense and research and its really hard to lose money. To repeat real estate is boring. It is not the stuff of a popular “ticker driven” daily stock show.

First - the individual real estate investor is not considered a significant business class worth service. Received wisdom sees it as a “cottage industry” full of small mom and pop would be investors.

Second – A popular image most associated with real estate investors is the helmet haired huckster or get rich quick guru selling some scheme designed to feather their nest versus help you the hapless investor. These folks sell process and personal effort pitched as personal profit. Fact is they have no interest in the individual investor's success beyond selling that investor their next book, tape or “secret.”

Third – The image of fix and flip speculators, fueled by foul mouthed TV reality characters, are easy media targets, or at minimum a distraction, on which to blame declining housing affordability. “Speculative real estate investors are responsible for the bubble” trumpet an ill-informed media looking for salacious headlines.

Fourth – Sympathy for people who are improving their fortunes, while others stand idle, is a rare commodity, even if their supposed fortunes don’t quite meet cocktail party boasts. The general media has trumpeted the very public failures of a few who followed the gurus but this is far from reality.

Real estate is not a trading market. Non-traded assets do not lend themselves to trading as illustrated by day trading. Fact is if real property is not held for at least 366 days, ordinary income, and even trading taxes may apply, versus capital gains. The wise investor is better served by a buy and hold strategy. Costs of doing business (sales costs) and tax regulations clearly favor holding over "flipping."

This tends to destroy the siren song of the real estate guru or TV huckster offering to "make you a million by midday " by teaching the business of foreclosures and short sales. As distasteful, and even as unethical as many of these so call experts are, they have done those of us who are serious about advocating sustainable investing behavior a huge favor. They have raised public awareness and promoted individual real estate as a viable mainstream investment option.

When others are selling, some in panic and others mis-informed, this is a good time to be looking around for pre-foreclosures as I am doing now.

Housing Bubble and Real Estate Market Tracker from SA for 3/30