The smart money is leaving real estate

[Vincent Crane]

Thoughts?

http://www.businessinsider.com/smart-money-getting-out-of-real-estate-2015-12

[JD Martin]

I put no confidence in the article whatsoever. "Real Estate" is absolutely a local market. I can show you around half a dozen localities in a 100 mile radius of where I live where real estate prices rose during the "crash" of 2007-2009. One of the reasons I like real estate is the local influence on prices that at least buffers some of the outside effects of recession & monetary policy. Further, to suggest that a small-time flipper or landlord should divest themselves of their properties because conglomerates holding 6 figures worth of units are selling off some/all assets is crazy talk. I paid so little for my properties that the world economy would have to crash, with Mad Max gangs roaming the streets, before I couldn't continue renting and making a profit. A conglomerate that buys 10,000 units at a time can afford to make $50/month/door because of the multiplier effect, but becomes that much more exposed if there is any kind of generalized downturn.