Would 100k in the market be a better investment than a downpayment on a house in Southern CA?

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I have no idea and neither does anyone else really. There is a pretty good chance that the answer is yes

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Housing prices are at unprecedented levels, propped up by persistent undersupply of middle-to-lower-middle class housing. It’s equal parts natural market dynamics and a nefarious but totally legal strategy of collusion between builders, REITs/private capital and now the tech industry getting into the i-buyer space.

Mortgage rates are at close to all time lows, which makes sense (negative correlation between price and “yield”) but getting a low rate on an overpriced asset is a net-even proposition.

I recently invested a slightly larger sum like this:

Crypto: $50,000 split two ways (ETH, SOL)
REIT: $30,000 in NRZ (NewRez) for the dividend
Tech: $60,000 in VGT (low cost ETF tracking tech and IT)
Broader market: $30,000 in VTI (low cost index fund tracking major markets)

If you want to chase yield, increase your allocation towards crypto. If you want a safe parking spot for your cash and a monthly, quarterly or biannual dividend, increase your allocation towards REITs.

Overall, I would try and wait for the housing market to cool a little bit (it won’t cool a lot because of the forces I’ve noted above, unless there’s a major market shock/crash) before you take the plunge on your own RE.

Hope this helps you!

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But the magnitude (spread between returns of the market v. real assets) is in favor of large-cap indexes by a wide margin - I don’t have my Bloomberg anymore, so feel free to fact check this, but I’m quite certain it’s accurate.

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Is $100k even enough for a down payment here? I’m so disgruntled after hearing about all-cash offers or offering well above the asking price. It seems so unattainable.

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$100k is 20% down on a condo in some socal cities… so it could work

No matter what anyone tells you, keep in mind that 2008 did not have the effect in southern California that the rest of the country saw. There is a significant lack of housing here that will not be fixed anytime soon. Prices will keep going up. Better to get on the property ladder now than later if you ask me.

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Yes

The current market in Southern California I’d say no. I can’t say that this market is going to burst anytime soon but it’s better to invest than over paying for a house at the moment

I think that you can have your cake and eat it to, if that is the situation.
First of all, 100k on a down payment is wasted money when you can get a loan for 5% down.
Yes it will do better in the market now, but nothing beats the security of diversification.

If op is buying a $2 MM home, they would not be here asking about how to invest 100k.

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