Is a House Ever a Good Investment?
By Vedran Vuk, Casey Research
Recently, my parents were considering purchasing some real estate. As the financial professional in the family, they asked me, “What do you think? Will it go up in value? You know… not now, but eventually?” I’ve heard the same thing over and over again. In response, I shared my opinion: “Would you pay the current market price to live there even if its value never increased?” If the answer is yes, buy the property.” Essentially, is the house worth it as a home, not as an investment?
In the past few decades, the concept of home ownership has been completely turned on its head. Previously, homes were considered a very long-term consumption good. Do you think anyone in the 18th, 19th, and prior centuries ever considered tripling the value of their homes by retirement time and selling them to move beachside? In the vast majority of cases, such ideas never crossed their minds.
Yet, somehow along the way, this became a reasonable investment expectation. Even today, home buyers still make their purchases with the hopes of escalating prices. But are homes really wise investments? Continue reading
5 Reasons Why Your Home Isn’t Selling
There are many reasons why homes don’t sell. In this article Amy Fowler looks at five of the most common reasons and what you can do about it. ~ Tim McMahon, editor
Price
This might seem so obvious that you write it off as a potential problem, but overpriced homes are more common than you might think. Often, Real Estate agents will overestimate the value of your home so that you choose them to sell your house, as opposed to a rival who has priced it more realistically.
In addition, estate agents will use examples of overpriced homes in order to encourage the sale of cheaper yet similar homes in the area. Be sure you know the value of your home and price it realistically.
It’s too ‘you’
Potential buyers need to be able to envision themselves living in the home. If the property is decorated according to
Take Advantage of Longer Foreclosure Times
Foreclosure Time Lengthens- What To Do?
According to RealtyTrac® the leading online marketplace for foreclosure properties, foreclosures in April 2011 hit a 40 month low. There were 219,258 U.S. properties in April with default notices, scheduled auctions and bank repossessions. This is a 9 percent decrease from March and a 34 percent decrease from April 2010. When I first heard this I thought, “It sounds encouraging, perhaps we are seeing an end to the housing mess.” But wait! Here is what James J. Saccacio, chief executive officer of RealtyTrac (the online foreclosure data people) said.
“Foreclosure activity decreased on an annual basis for the seventh straight month in April, bringing foreclosure activity to a 40-month low. This slowdown continues to be largely the result of massive delays in processing Continue reading
Why the Bottom Is in for U.S. Real Estate Prices
By Michael Lombardi
There is no doubt in my mind that the real estate market has bottomed out. I’m in Miami this week trying to pick up some “deals” in this recession-hit-hard town and I’m starting to see some changes in the marketplace for real estate.
I want my dear readers to be aware of two important changes in the property market:
— While there is still a glut of property (condos and vacation properties) on the market, prices have stopped declining because foreign buyers are in the marketplace buying up the deals. Florida and Arizona, in my circle of associates, are the places real estate investors are buying in.
— The bank-foreclosed deals and properties about to go into foreclosure (also known as “short sales”) are being bought by investors with cash. No financing. When you see cash buyers that usually signifies patient money that believes now this the time to buy. Cash buyers often do not have the pressure to sell. When cash buyers come in, it is usually a signal of a bottom in any market.
In Florida, the more inland you go (away from the ocean), the more prices for real estate have dropped. It is common to find inland property selling at half the price it sold at during the property market peak in 2005. There is a glut of product and cranes still stick through the top of unfinished condo buildings.
But, slowly, these depressed properties are being taken up by investors (or people looking for vacation homes) who are taking the “I might never see prices like this again” attitude.
While I’ve given my readers two important positives for the real estate market in the U.S., if you are planning to jump into this market, I also want to give you three warnings:
