Inflation tax 2.

Odds are that they are expecting an increase with the change of ownership, anyway.

Just thought it was odd.

They would sell their humble little Bay Area abode for 7 figures, then move inland to Fresno and Clovis where they could buy a McMansion, all cash, and still have a nice little nest egg left.It could be a while before that situation returns, but with the aging population, once the economy and housing market fully recovers, I think you'll find millions of Baby Boomers finally taking their long awaited retirement, liquidating their once again inflated coastal real estate holdings, and moving inland for the easy life.

Another factor to consider might be the direction you think our economy is headed in.Both inflation and deflation punish those using leverage in different ways, and in both direct and indirect ways.However, if you own a hard asset free and clear the 'purchasing power' should remain about the same.One trick with real estate is to understand how very illliquid it is and to ensure that you have enough 'operating' funds to hold on to it through any lengthy tough times."

Those of us who are buying rehab properties and renting them out should be well positioned... and hopefully we will keep pace with inflation when it hits.

I plan to utilize all of them and could use all the advice I can get.Also,I plan to target an area that is about an hour away from where I live.I know that is supposed to be a no,no.Every thing I have read says start in your home town but I go to this area alot for dining and shopping and am fairly famaliar with it.It is one of the best markets around and I live in a small resort type town with very slim pikins and very inflated prices.Am I making a mistake?

I'm with you on this one.I would have to disagree with this statement and here is why:In a savings account today, you are lucky if you get 1% and even if you got 4%, you would be losing money as inflation is well over that.

Being politically vocal, my guess is that you are getting ready for inflation.

Otherwise, we may find ourselves in the perverse situation where it is much more profitable for two neighbors to own each other's homes and rent them out than to own their own homes.I think the problem with inflated asset prices has been caused by a variety of factors such as (a) government guarantees of mortgages, (b) short-term executive compensation arrangements, (c) lack of shareholder rights, (d) non-recourse home loans and (e) the stupidity and greed of home buyers.