Is This a Good Time
To Invest in Real Estate?

Question: With the stock market, particularly the Nasdaq, taking a nose dive, is this a good time to take my money out and invest in real estate?

Peter: If you ask a real-estate agent or stock broker, you're likely to be told that it's always a good time to buy. When the market is hot, you're told to buy because prices will go even higher. When the market is cold, you're told it's an even better buying opportunity.

In reality, however, the real-estate market, like the stock market, is cyclical. Buy when it's at the bottom -- as real estate was about four years ago -- and you'll see your investment skyrocket. Buy at the top -- as many did in 1990 -- and you'll lose a fortune.

Today's real-estate market, particularly at the high end, is still exceptionally strong. Anticipated drops in interest rates, which should make buying a home easier, could make the market even stronger. Plus, the shortage of homes in states such as California suggests a long-term up market.

But if the drop in the stock market foreshadows an economic downturn, real estate could suffer. People will hold back on big purchases if they feel their jobs and income are threatened, and real estate is the biggest single purchase many people make in their lives.

I don't have a crystal ball, but right now I'm still betting on real estate. Then again, I'm a bit biased.

Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Power Tips for Selling a Home for More," (McGraw-Hill, 2000).

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Peter, Culver City, Calif.

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