A sober look at real property

If you’re seeking proof that hindsight is 20/20 The Economist Magazine has a great section this week featuring real property.  HERE IS A LINK.  Here are a couple interesting quotes from the Leaders section:

• “Property is more than just a place to live and work. For many people, it is the biggest financial bet they will ever make… Over a quarter of mortgage-holders in America owe more on their loans than their homes are worth.”
• “It is no coincidence that the housing bubble started in the aftermath of the dotcom bust. Out went fantasy business plans; in came a real asset with a proven record.”
• “…property is a magnet for debt. Lenders have to set aside less capital for loans against property because of its security as collateral. Individuals have no other opportunity to take on so much leverage.”
• “Property is also an inefficient asset class. It is lumpy: you can offload parts of your share portfolio, but you cannot sell off the kitchen. It is illiquid, which can strand people in their homes even if they are not in negative equity. And it is inefficiently priced, not least because as an asset class it is hard to short: you can’t hedge your exposure.”