[hytem]

California is probably a bit different than most places for real estate, since housing prices tend to be higher, and the market may be more volatile because of it.

In my experience, real estate is still the best investment you can make. My house which I bought new has appreciated 400% in 20 years. A big chunk of that is the 1.2 acres of land. You can't do that well in stocks long-term.

Despite all the media hype about housing downturns, mortgage rates remain low and the market has shown resiliency against a lot of downward mental pressure. Vacation housing has been lagging, especially in Florida, where the media has overhyped hurricanes the past two years, despite none last year. But even that is coming back some.

Peoples' buying and selling attitudes are influenced by what they sense and see on TV. And there hasn't been much good news lately. So a lot of buyers have been holding back--some waiting for prices to bottom.

The key to housing has always been mortgage rates, and the market will be OK as long as rates stay low and money is available.

As for loans against your home equity, it makes sense at current rates, as long as you don't overdo it. You get a tax deduction, and rates are only a point or two higher than CD rates. That's cheap money. What to do with it? Buy more real estate--in a good location.