Getting Rich In Real Estate

From Money Magazine:

Can you still get rich in real estate?

"Home sales are slowing. Condo prices are slipping. Sellers can't get their asking prices."

"And even real estate bulls are now waving the caution flag."

"If you're expecting a short-term gain, "you should be looking elsewhere," says Christopher Mayer, a Columbia University economics professor who not long ago argued that land shortages and rising populations would translate into ever-rising prices in "superstar" cities like New York and San Francisco."

"Clearly, it's time for a re-think, whether you're mulling over buying, selling, refinancing or remodeling a home or investment property. Or if you're just wondering, Is our house still worth what we think it is?"

"The short answer: It depends on where you live. If you reside in one of the past decade's boom markets along the coasts or in the Southwest, brace yourself. Prices there were powered by two kinds of fuel: low interest rates and the willingness of buyers to pay up for the American dream."

"That tank is almost empty."

"Mayer thinks that, with fewer people buying but plenty still hoping to cash out, prices in the most expensive markets could drop 15 percent in the next year, if mortgage rates rise another point. The forecasters at Fiserv Lending Solutions and Moody's Economy.com, who crunched the numbers for our 12-month nationwide forecast, aren't so pessimistic, but they're hardly Pollyannas."

"Prices will flatten in most ex-boomtowns this year, and next year will be worse, says David Stiff, Fiserv's chief economist. "A lot of markets - particularly those where prices have increased dramatically compared with income - will see drops by late 2007," he says."