A local real estate agent recently compared one Deep Creek house to one stock over a period of time closely resembling the housing bubble ..

and inferred that Deep Creek real estate was a better and more stable investment than stocks or in this case one particular stock. I was listening to my Ipod this morning and thought of another stock to compare to the property detailed by this agent to result in a gain of $415,000 on a $515,000 investment made on October 4, 1999. If the buyer of this property would have instead invested $515,000 with Steve Jobs and Apple (AAPL), by February 13, 2009 he would have amassed a total return on investment of over $2.6 million or more than six times the return achieved by investing in Deep Creek real estate. And this was after AAPL shares had taken a 50% tumble over the preceding year (at the end of the wild ride, AAPL investors are still feeling about six times better than Deep Creek real estate investors).

So while investors in the Deep Creek real estate market have done quite well as a result of the national housing bubble, they could have done even better just investing in AAPL and today they could even recoup their investment on any given business day instead of having to list their illiquid property for sale and wait and wait and wait while prices continue to decline. Yeah, the agent didn't mention that part did he? And he also didn't tell you that based on the most recent month's sales pace it would take more than 6 years just to sell the properties currently listed for sale either did he? While you are kicking yourself for not just investing in AAPL stock, cross your fingers and hope that prices don't decline further and get ready to wait while you try to get rid of the Deep Creek vacation home you don't want or can no longer afford. Or if you want to sell fast you could just lower your price now instead of waiting to lower it later as most have done.

Here's an idea, if you want a stable investment buy some bonds or put your money in a CD or even under your pillow, if you need a place to live buy a house you can afford. If you want to buy a rental property do your homework and learn about things like cap rates, etc. My experience has been that Deep Creek cap rates are not particularly appealing at this point and at least one local agent recently admitted that cap rates were much better 10 years ago (suggesting properties were much better investment values then than now). Maybe I'm just too much of a value investor for these real estate daytraders who early last year were telling you to ignore common sense and "buy now" so that you could pay for your child's college education in five years.

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