Real Estate Continues to be THE Best Long Term Investment

By Peter L. Mosca

November 12, 2007

Real estate is the single best investment one can make. That's how I open my weekly radio show, "Income Property Investment Talk," on the Voice America Network every Wednesday at 11 a.m. (yes, a shameless plug). That is the overriding message builders should be articulating, with repetition, to key internal and external audiences. And, yes, the facts prove this proclamation accurate.

"Homeownership as a long-term investment has a track record that is virtually unmatched by any other purchase in terms of its real benefits, Brian Catalde, president of the National Association of Home Builders (NAHB) and a homebuilder from El Segundo (CA). "Homeowners today have a combined $11 trillion in equity in their homes, against which they can borrow to help pay for college tuition, medical expenses and other needs. And housing offers important tax incentives to make owning a home more affordable."

"When you consider the facts, it's easy to see why 5.5 million people are choosing to buy a home this year. There are some challenges in the market, but overall there are many more opportunities in local markets today," said Pat V. Combs, 2007 President of the National Association of REALTORS. "Real estate continues to be a solid long-term investment."
While the latest S&P/Case-Shiller home price statistics for 20 of the nation's largest metro markets showed a 4.4 percent year-over-year decline, a closer examination of the data reveals that on average, these same markets appreciated in value by more than 50 percent over the past five years. For example, in Chicago, home prices declined 1.3 percent between August 2006 and August 2007, while posting a 34.2 percent gain for the five-year period between August 2002 and August 2007.

"To argue that home values will continue to decline and never recover, somebody has to make a convincing case that it will cost less to build a new home five years from now than it does today -- and that's just not going to happen," said Catalde. "Despite today's housing slowdown, the cost of land, labor and materials required to build new homes continues to go up."
Furthermore, Catalde noted that the rapid appreciation rates in 2003-2005 were clearly unsustainable over the long-term, and that housing typically increases in value slightly above the overall inflation rate.

Among the 20 markets surveyed by S&P/Case-Shiller, which represent more than 40 percent of the U.S. population, four posted home price appreciation rates of more than 80 percent over the past five years while 11 registered gains of more than 45 percent.

"It's important to keep things in perspective," said Catalde. "The current housing price correction is most pronounced in the once super-heated markets in California, Nevada, Florida and Arizona. In most other markets, price declines have been pretty modest."

"Perceptions about real estate have been skewed in recent months due to the overwhelming focus on national figures. While average sales and prices help us identify trends, the fact is all real estate is local -- conditions vary greatly from one city to the next," added Combs. "Unfortunately, that news is largely unreported."

Builders cannot allow the national media to report what it deems to be the proper perspective on the value of real estate. Builders must get out in full force and spread, with repetition, one simple message: "Real estate is the single best investment one can make."

Copyright © 2007 Realty Times. All Rights Reserved.

Election Results

Needless to say, I'm dissappointed that so few voted in this general election. Kingman seems to have been captured, our future in doubt by a few people who despise future growth and want no changes.

I do admire the passion of this group and wish those who look for a better future for our city had the same fevor.

So, where do we go from here?

General Housing Market to Start Recovery in early '08

Home sales should bottom out by the end of the first quarter of this coming year, according to a recent study and report from the National Association of Home Builders. Despite current market sluggishness, the housing market will start to turn around next year for a number of reasons: the overall economy and job growth will continue to move ahead at a decent pace, core inflation is under control, the credit crunch in mortgage markets is showing signs of easing, and the supply-demand equation will be better balanced as builders begin to whittle down their excess inventories. That's the prediction of David Seiders, chief economist for NAHB. "With the housing sector facing a large backlog of unsold inventory, new construction starts and permits won't begin to move forward until sales firm up. Home sales should bottom out by the end of the first quarter of next year, and housing starts will be up in the third quarter, assuming the inventory overhang stabilizes," he said. NAHB's short-term forecast is based on several assumptions: skillful management of monetary policy by the Federal Reserve, maintenance of solid growth in personal income and employment, a manageable wave of home mortgage foreclosures and better performance of mortgage markets going forward. The report observed that the long-term potential for housing activity is very good. "By the end of 2009, we may be at a pace of 1.5 million units of new housing production (including manufactured homes). Once we are out of the woods, we should see good growth in front of us - maybe 2 million units per year."

Don't Forget to Vote!

Tomorrow is election day and no matter what side of the issues you are on, remember it is a priviledge to vote in any and all elections. Tomorrow is important to Kingman. The results of this election will set in motion the future of our area and define how we see ourselves to the outside world.

These have been painful months with acusations, inuendo and negative images filling our news, fouling our streets with signs etc. Let your voice be known. Vote November 6 for a better Kingman.

Buy a Retirement Home Now!

Daily Real Estate News August 13, 2007

Buy Retirement Home Now, Move in Later

With prices in many areas at a low ebb, it might make good financial sense for Baby Boomers to buy their retirement homes now, even if they're still years away from actually moving. They can find renters who will pay the bills until they're ready to live there. Here’s some advice for people who are considering this strategy:
Shop carefully. It's best to buy a home that can be rented for a rate that, after tax considerations, will cover the mortgage, real estate taxes, and insurance.
Study up on housing trends. Ask the local or state planning department for demographic and economic data. The information can reveal facts that will influence whether or not to buy. For example, big companies going out of business or military base closings can be bad news.
Don’t forget maintenance. Consider who’ll take care of the house in the owner’s absence. Property managers charge 6 percent to 15 percent of the monthly rent. Family members may be willing to do the job for free, but they could be ill equipped to do the job if the don't have any experience.
Consider financing. Boomers with sufficient equity in their current homes can tap it to either buy their retirement home outright or secure a much lower mortgage rate compared with a loan at the rate often offered to buyers of investment property.

Source: The Washington Post, Belly L. Kass, Esq. (08/11/07)

First Entry

I'm new to this as you will see. I've not really blogged before.

Thank Goodness its Friday! It's been a long stressful week dealing with the stock market news, concerns from buyers and sellers about the long term affects of this market.

Coming from the days when a bad market was buyer interest rates topping 15%, no water permits for builders, etc. This market does not look that bad.

Yes, Kingman has a large inventory of homes on the market, yes, there have been price corrections, but if a home is priced correctly we have no problems finding a buyer for it. We are busy!

One of the reasons we are busy is because we have gone back to the basics. This is a contact business and they are doing a great job getting out and meeting the public. If you have a service, you need to let the public know about that service.

It is great being part of a team that is optimistic about the market, works hard/plays hard, and has a deep committment to their customers.