What’s The Value of Your House? (Are you in this “average” market?)
“There is science, logic, reason; there is thought verified by experience. And then there is California.” -Edward Abbey
Of the top 10 most expensive markets in the US, California has 5 of them.
The AVERAGE price of California’s major metro areas is $664,820.
The total population of those 5 metro areas is 24.3 million people.
Must be because it’s a tax haven…
Here’s a little trivia… if those 24.3 people all bought an average-priced home, then the total value would be $16,155,126,000,000.
That’s over $16 trillion dollars…
The length of $16 trillion one dollar bills laid end-to-end measures 1,550,506,496 miles.
That’s the distance of earth to the sun… 15 times!
(So… Now you can imagine what the US Government’s debt looks like at $20 trillion.)
To be fair, California is the sixth largest economy in the world. And if you want to be where the action is, then California is a great place to be.
However, if you’re looking to be a real estate investor in the Golden State, then you are walking on thin ice.
Rental yields are negative in many areas of California (meaning a mortgage is going to cost you significantly more than if you are renting, resulting in a loss for a real estate investor).
Of course, there’s always the possibility that property prices will go up further, which may give you the opportunity to cash out (or sell to the greater fool).
But why risk your money in a market that is expensive with no return? Why not look to other areas that offer real returns and real opportunities?
If you’re nervous about going abroad to find investments that offer huge returns, don’t worry, there is always another opportunity around every corner.
(If you’re US based, or interested in investing in the US, I’ve found an area of the country that is very attractive right now. More on that later…)